SC TO-T

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE TO

(Rule 14d-100)

TENDER OFFER STATEMENT

UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934

TODD SHIPYARDS CORPORATION

(Name of Subject Company (issuer))

NAUTICAL MILES, INC.

(Names of Filing Persons (offeror))

VIGOR INDUSTRIAL LLC

(Names of Filing Persons (parent of offeror))

Common Stock, Par Value $0.01 Per Share

(Title of Class of Securities)

889039103

(CUSIP Number of Class of Securities)

Frank J. Foti

Vigor Industrial LLC

5555 N. Channel Avenue

Portland, Oregon 97217

(800) 505-1930

(Name, address, and telephone numbers of person authorized to receive

notices and communications on behalf of filing persons)

With a copy to:

C. Kent Carlson

Kristy T. Harlan

K&L Gates LLP

925 4th Avenue, Suite 2900

Seattle, Washington 98104-1158

(206) 623-7580

CALCULATION OF FILING FEE

Transaction valuation*	Amount of Filing Fee**
$130,002,991.17	$15,093.35

* Calculated solely for purposes of determining the filing fee. The calculation assumes the purchase of 5,787,231 shares of common stock, par value $0.01 per share (including 7,875 shares subject to forfeiture or restrictions on transfer), at $22.27 per share. The transaction value also includes the aggregate offer price for 27,840 shares of common stock underlying restricted stock units and 88,000 shares of common stock issuable upon the exercise of stock-settled appreciation rights with an exercise price less than $22.27 per share, calculated by multiplying the number of shares of common stock issuable pursuant to such stock-settled appreciation rights at each exercise price therefor by an amount equal to $22.27 minus such exercise price.

** Calculated in accordance with Exchange Act Rule 0-11 by multiplying the transaction value by 0.00011610.

¨ Check the box if any part of the fee is offset as provided by Rule 0–11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: N/A	Filing Party: N/A
Form or Registration No.: N/A	Date Filed: N/A

¨ Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

x third-party tender offer subject to Rule 14d–1.

¨ issuer tender offer subject to Rule 13e–4.

¨ going-private transaction subject to Rule 13e–3.

¨ amendment to Schedule 13D under Rule 13d–2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:  ¨

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

¨ Rule 13e–4(i) (Cross-Border Issuer Tender Offer)

¨ Rule 14d–1(d) (Cross-Border Third-Party Tender Offer)

This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the tender offer by Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), for all of the outstanding common stock, par value $0.01 per share (the “Shares”), of Todd Shipyards Corporation, a Delaware corporation (“Todd”), at a price of $22.27 per share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and conditions set forth in the Offer to Purchase dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), a copy of which is attached as Exhibit (a)(1)(A), and in the related letter of transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal”), a copy of which is attached as Exhibit (a)(1)(B), which, collectively constitute the “Offer.”

All the information set forth in the Offer to Purchase is incorporated by reference herein in response to Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the information specifically provided in this Schedule TO.

Item 1. Summary Term Sheet.

The information set forth in the Offer to Purchase under the caption SUMMARY TERM SHEET is incorporated herein by reference.

Item 2. Subject Company Information.

(a) Name and Address. The name, address, and telephone number of the subject company’s principal executive offices are as follows:

Todd Shipyards Corporation

1801 16th Avenue SW

Seattle, Washington 98134

(b) Securities. This Schedule TO relates to the Offer by Purchaser to purchase all issued and outstanding Shares. As of December 15, 2010, based on information provided by Todd, there were (i) 5,787,231 Shares issued and outstanding, of which 7,875 shares were subject to forfeiture or restrictions on transfer, (ii) 6,041,074 Shares held by Todd in its treasury, (iii) 212,790 Shares reserved for issuance under an equity incentive plan, (iv) 27,840 Shares subject to outstanding restricted stock units granted under the equity incentive plan, and (v) 88,000 Shares were subject to stock-settled stock appreciation rights (“SARs”) linked to the value of the Shares, of which 35,999 Shares were subject to issuance pursuant to vested SARs and 52,001 Shares were subject to issuance pursuant to SARs that were not vested as of December 15, 2010. The information set forth on the cover page and in the INTRODUCTION of the Offer to Purchase is incorporated herein by reference.

(c) Trading Market and Price. The information set forth under the caption THE TENDER OFFER — Section 6 (“Price Range of Shares; Dividends”) of the Offer to Purchase is incorporated herein by reference.

Item 3. Identity and Background of Filing Person.

(a) – (c) Name and Address; Business and Background of Entities; and Business and Background of Natural Persons. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 8 (“Certain Information Concerning Parent and Purchaser”) and Schedule I attached thereto.

Item 4. Terms of the Transaction.

(a) Material Terms. The information set forth in the Offer to Purchase is incorporated herein by reference.

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Item 5. Past Contacts, Transactions, Negotiations and Agreements.

(a) Transactions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

(b) Significant Corporate Events. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 11 (“The Merger Agreement; Other Agreements”)

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

Item 6. Purposes of the Transaction and Plans or Proposals.

(a) Purposes. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

(c) (1)-(7) Plans. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 11 (“The Merger Agreement; Other Agreements”)

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

THE TENDER OFFER — Section 13 (“Certain Effects of the Offer”)

THE TENDER OFFER — Section 14 (“Dividends and Distributions”)

Item 7. Source and Amount of Funds or Other Consideration.

(a) Source of Funds. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

(b) Conditions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 11 (“The Merger Agreement; Other Agreements”)

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

THE TENDER OFFER — Section 15 (“Conditions of the Offer”)

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(d) Borrowed Funds. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 11 (“The Merger Agreement; Other Agreements”)

THE TENDER OFFER — Section 15 (“Conditions of the Offer”)

The Merger Agreement is incorporated herein by reference to Exhibit 2.1 filed with the Form 8-K, dated December 22, 2010, by Todd.

Item 8. Interest in Securities of the Subject Company.

(a) Securities Ownership. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

THE TENDER OFFER — Section 8 (“Certain Information Concerning Parent and Purchaser”) and Schedule I attached thereto.

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

(b) Securities Transactions. None.

Item 9. Persons/Assets, Retained, Employed, Compensated or Used.

(a) Solicitations or Recommendations. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 3 (“Procedures for Accepting the Offer and Tendering Shares”)

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 17 (“Fees and Expenses”)

Item 10. Financial Statements.

(a) Financial Information. Not Applicable.

(b) Pro Forma Information. Not Applicable.

Item 11. Additional Information.

(a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Todd”)

THE TENDER OFFER — Section 11 (“The Merger Agreement; Other Agreements”)

THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Todd”)

THE TENDER OFFER — Section 13 (“Certain Effects of the Offer”)

THE TENDER OFFER — Section 16 (“Certain Legal Matters; Regulatory Approvals”)

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(b) Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference.

Item 12. Exhibits.

Exhibit No.	Description
(a)(1)(A)	Offer to Purchase, dated December 30, 2010.
(a)(1)(B)	Form of Letter of Transmittal.
(a)(1)(C)	Form of Notice of Guaranteed Delivery.
(a)(1)(D)	Form of Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F)	Summary Advertisement as published in the New York Times on December 30, 2010.
(a)(1)(G)	Joint Press Release issued by Todd Shipyards Corporation and Vigor Industrial LLC on December 23, 2010.
(b)(1)	Senior Debt Commitment Letter, dated as of December 21, 2010, from KeyBank National Association and General Electric Capital Corporation and GE Capital Markets, Inc. to Vigor Industrial LLC.
(b)(2)	Mezzanine Debt Commitment Letter, dated as of December 20, 2010, from Endeavour Structured Equity and Mezzanine Fund I, LP to Vigor Industrial LLC.
(d)(1)	Agreement and Plan of Merger, dated as of December 22, 2010, by and among Vigor Industrial LLC, Nautical Miles, Inc. and Todd Shipyards Corporation (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 23, 2010).
(d)(2)	Tender and Support Agreement, dated as of December 22, 2010, by and among Vigor Industrial LLC, Nautical Miles, Inc., Brent D. Baird, Steven A. Clifford, Berger A. Dodge, Patrick W.E. Hodgson, Joseph D. Lehrer, William L. Lewis, Michael A. Marsh, Admiral J. Paul Reason, USN, Stephen G. Welch, and Woodbourne Partners, L.P. (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 23, 2010).
(d)(3)	Confidentiality Letter Agreement dated as of June 8, 2010 from Todd Shipyards Corporation to Vigor Industrial LLC (incorporated by reference to Exhibit (e)(4) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(4)	Confidentiality Letter Agreement dated as of June 8, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(5) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(5)	Exclusivity Letter Agreement effective as of November 12, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(6) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(6)	Exclusivity Letter Agreement effective as of December 3, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(7) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(g)	None.
(h)	None.

Item 13. Information Required by Schedule 13E-3.

Not applicable.

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SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 30, 2010

NAUTICAL MILES, INC.
By:	/s/    FRANK J. FOTI
Name:	Frank J. Foti
Title:	President
VIGOR INDUSTRIAL LLC
By:	/s/    FRANK J. FOTI
Name:	Frank J. Foti
Title:	President

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EXHIBIT INDEX

Exhibit No.	Description
(a)(1)(A)	Offer to Purchase, dated December 30, 2010.
(a)(1)(B)	Form of Letter of Transmittal.
(a)(1)(C)	Form of Notice of Guaranteed Delivery.
(a)(1)(D)	Form of Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F)	Summary Advertisement as published in the New York Times on December 30, 2010.
(a)(1)(G)	Joint Press Release issued by Todd Shipyards Corporation and Vigor Industrial LLC on December 23, 2010.
(b)(1)	Senior Debt Commitment Letter, dated as of December 21, 2010, from KeyBank National Association and General Electric Capital Corporation and GE Capital Markets, Inc. to Vigor Industrial LLC.
(b)(2)	Mezzanine Debt Commitment Letter, dated as of December 20, 2010, from Endeavour Structured Equity and Mezzanine Fund I, LP to Vigor Industrial LLC.
(d)(1)	Agreement and Plan of Merger, dated as of December 22, 2010, by and among Vigor Industrial LLC, Nautical Miles, Inc. and Todd Shipyards Corporation (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 23, 2010).
(d)(2)	Tender and Support Agreement, dated as of December 22, 2010, by and among Vigor Industrial LLC, Nautical Miles, Inc., Brent D. Baird, Steven A. Clifford, Berger A. Dodge, Patrick W.E. Hodgson, Joseph D. Lehrer, William L. Lewis, Michael A. Marsh, Admiral J. Paul Reason, USN, Stephen G. Welch, and Woodbourne Partners, L.P. (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 23, 2010).
(d)(3)	Confidentiality Letter Agreement dated as of June 8, 2010 from Todd Shipyards Corporation to Vigor Industrial LLC (incorporated by reference to Exhibit (e)(4) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(4)	Confidentiality Letter Agreement dated as of June 8, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(5) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(5)	Exclusivity Letter Agreement effective as of November 12, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(6) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(d)(6)	Exclusivity Letter Agreement effective as of December 3, 2010 from Vigor Industrial LLC to Todd Shipyards Corporation (incorporated by reference to Exhibit (e)(7) to the Schedule 14D-9 filed by Todd Shipyards Corporation with the Securities and Exchange Commission on December 30, 2010).
(g)	None.
(h)	None.

EX-99.(A)(1)(A)

Exhibit (a)(1)(A)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at

$22.27 Net Per Share

by

NAUTICAL MILES, INC.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK
CITY TIME, ON JANUARY 28, 2011, UNLESS THE OFFER IS EXTENDED OR
EARLIER TERMINATED.

Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), is offering to purchase all of the outstanding shares of common stock, par value $0.01 per share (“Shares”), of Todd Shipyards Corporation, a Delaware corporation (“Todd”), at a price of $22.27 per Share (the “Offer Price”), net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions described in this offer to purchase (together with any amendments and supplements, this “Offer to Purchase”) and the related letter of transmittal (together with any amendments and supplements, the “Letter of Transmittal”), which collectively constitute the “Offer.”

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of December 22, 2010 (the “Merger Agreement”), by and among Todd, Parent and Purchaser. Pursuant to the Merger Agreement, following the consummation of the Offer and the satisfaction or waiver of each of the applicable conditions described in the Merger Agreement, Purchaser will merge with and into Todd (the “Merger”), with Todd continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Parent. As a result of the Merger, each outstanding Share (other than Shares owned by Parent, Purchaser or Todd, or by any stockholder of Todd who is entitled to and properly exercises appraisal rights under Delaware law) will be converted into the right to receive the Offer Price. In certain cases, Parent, Purchaser and Todd have agreed to proceed with a one-step merger transaction if the Offer is not completed. Under no circumstances will interest be paid on the Offer Price for the Shares, regardless of any extension of the Offer or any delay in making payment for the Shares.

After careful consideration, the board of directors of Todd (the “Todd Board”) by a unanimous vote of the disinterested directors (i) determined that the Merger Agreement, the Offer, the Merger, and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer, and to the extent required by applicable law, approve the Merger and adopt the Merger Agreement.

The Offer is conditioned upon, among other things, (i) there being validly tendered in accordance with the terms of the Offer and not withdrawn prior to midnight New York City time, on January 28, 2011 (the “Expiration Date,” unless Purchaser extends the period during which the Offer is open in accordance with the Merger Agreement, in which event “Expiration Date” means the latest time and date at which the Offer, as so extended by Purchaser, expires), a number of Shares, together with any Shares then owned by Parent and its subsidiaries and any Shares that may be validly issued pursuant to the Top-Up (as defined on page 6), that equals at least 90% of the total outstanding Shares as of the Expiration Date on a fully diluted basis, and (ii) the

receipt of proceeds by Parent or Purchaser (either directly or through their subsidiaries) under (a) a Debt Commitment Letter from GE Capital Markets, Inc., General Electric Capital Corporation and KeyBank National Association and (b) a Mezzanine Debt Commitment Letter from Endeavour Structured Equity and Mezzanine Fund I, LP. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.”

A summary of the principal terms of the Offer appears on pages 1 through 7. You should read this entire Offer to Purchase and the Letter of Transmittal carefully before deciding whether to tender your Shares in the Offer.

December 30, 2010

IMPORTANT

If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (i) complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, and mail or deliver the Letter of Transmittal and any other required documents to American Stock Transfer & Trust Company, in its capacity as depositary for the Offer (the “Depositary”), and either deliver the certificates for your Shares to the Depositary along with the Letter of Transmittal or tender your Shares by book-entry transfer by following the procedures described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” in each case before the Expiration Date, or (ii) request that your broker, dealer or other nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer or other nominee, you must contact that institution to tender your Shares to Purchaser pursuant to the Offer.

If you desire to tender your Shares pursuant to the Offer and the certificates representing your Shares are not immediately available, you cannot comply in a timely manner with the procedures for tendering your Shares by book-entry transfer, or you cannot deliver all required documents to the Depositary before the Expiration Date, you may tender your Shares to Purchaser pursuant to the Offer by following the procedures for guaranteed delivery described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

* * * * *

Questions and requests for assistance regarding the Offer or any of the terms of the Offer may be directed to Phoenix Advisory Partners, as information agent for the Offer (the “Information Agent”), at the address and telephone numbers listed for the Information Agent on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent. You may also contact your broker, dealer, or other nominee for assistance.

This Offer to Purchase and the Letter of Transmittal contain important information, and you should read both carefully and in their entirety before making a decision with respect to the Offer.

This transaction has not been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or any state securities commission nor has the SEC or any state securities commission passed upon the fairness or merits of such transaction or upon the accuracy or adequacy of the information contained in this Offer to Purchase or the Letter of Transmittal. Any representation to the contrary is unlawful.

TABLE OF CONTENTS

		Page
SUMMARY TERM SHEET			1
INTRODUCTION			8
THE TENDER OFFER			11
1.	Terms of the Offer.		11
2.	Acceptance for Payment and Payment for Shares.		12
3.	Procedures for Accepting the Offer and Tendering Shares.		13
4.	Withdrawal Rights.		16
5.	Certain United States Federal Income Tax Consequences.		17
6.	Price Range of Shares; Dividends.		20
7.	Certain Information Concerning Todd.		20
8.	Certain Information Concerning Parent and Purchaser.		21
9.	Source and Amount of Funds.		22
10.	Background of the Offer; Past Contacts or Negotiations with Todd.		25
11.	The Merger Agreement; Other Agreements.		36
12.	Purpose of the Offer; Plans for Todd.		53
13.	Certain Effects of the Offer.		55
14.	Dividends and Distributions.		56
15.	Conditions of the Offer.		56
16.	Certain Legal Matters; Regulatory Approvals.		58
17.	Fees and Expenses.		59
18.	Miscellaneous		60
SCHEDULE I			61

SUMMARY TERM SHEET

Purchaser, a wholly-owned subsidiary of Parent, is offering to purchase all of the outstanding Shares at a price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions described in this Offer to Purchase and the Letter of Transmittal. This summary term sheet highlights selected information from this Offer to Purchase and may not contain all of the information that is important to you and is qualified in its entirety by the more detailed descriptions and explanations contained in this Offer to Purchase and the Letter of Transmittal. To better understand the Offer and for a complete description of the legal terms of the Offer, you should read this Offer to Purchase and the Letter of Transmittal carefully and in their entirety. Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers listed for the Information Agent on the back cover of this Offer to Purchase. Unless otherwise indicated in this Offer to Purchase or where the context otherwise requires, all references in this Offer to Purchase to “we,” “our” or “us” refer to Purchaser and, where appropriate, Parent.

Who is offering to buy my Shares?

Nautical Miles, Inc., or Purchaser, a wholly-owned subsidiary of Vigor Industrial LLC, or Parent, is offering to purchase all of the outstanding Shares. Purchaser is a Delaware corporation which was formed for the sole purpose of making the Offer and completing the process by which Purchaser will be merged with and into Todd. See the “Introduction” and Section 8 — “Certain Information Concerning Parent and Purchaser.”

How many Shares are you offering to purchase in the Offer?

We are making an offer to purchase all of the outstanding Shares on the terms and subject to the conditions described in this Offer to Purchase and the Letter of Transmittal. See the “Introduction” and Section 1 — “Terms of the Offer.”

Why are you making the Offer?

We are making the Offer because we want to acquire the entire equity interest in Todd. If the Offer is consummated, Parent intends immediately to have Purchaser consummate the Merger. Upon consummation of the Merger, Todd would be a wholly-owned subsidiary of Parent.

How much are you offering to pay and what is the form of payment? Will I have to pay any fees or commissions?

We are offering to pay $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes. We refer to this amount as the “Offer Price.” If you are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your Shares through a broker, dealer, or other nominee and your broker, dealer or other nominee tenders your Shares on your behalf, your broker, dealer or other nominee may charge you a fee for doing so. You should consult your broker, dealer or other nominee to determine whether any charges will apply. See the “Introduction,” Section 1 — “Terms of the Offer,” and Section 2 — “Acceptance for Payment and Payment for Shares.”

Is there an agreement governing the Offer?

Yes. Todd, Parent and Purchaser entered into an Agreement and Plan of Merger, dated as of December 22, 2010 (the “Merger Agreement”). The Merger Agreement provides for, among other things, the terms and conditions of the Offer and the Merger. See Section 11 — “The Merger Agreement; Other Agreements” and Section 15 — “Conditions of the Offer.”

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What does the Todd Board recommend?

After careful consideration, the Todd Board by a unanimous vote of the disinterested directors (i) determined that the Merger Agreement, the Offer, the Merger, and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer, and to the extent required by applicable law, approve the Merger and adopt the Merger Agreement.

See the “Introduction” and Section 12 — “Purpose of the Offer; Plans for Todd” and Todd’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) to be filed with the SEC and furnished to stockholders in connection with the Offer.

What are the most significant conditions to the Offer?

The Offer is conditioned upon, among other things:

• that the number of Shares that have been validly tendered and not properly withdrawn before the Expiration Date, together with any Shares then owned by Parent and its subsidiaries and the number of Shares that may be validly issued as Top-Up Shares (as defined on page 6), equals at least 90% of the Shares outstanding as of the Expiration Date on a fully diluted basis (the “Minimum Tender Condition”);

• the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any other applicable federal, state or foreign laws regulating competition and the receipt of any required approval from a governmental entity that is necessary for the consummation of the transactions contemplated by the Merger Agreement;

• the receipt by Parent or Merger Sub (either directly or through their subsidiaries) of proceeds under (i) a Debt Commitment Letter from GE Capital Markets, Inc., General Electric Capital Corporation and KeyBank National Association and (ii) a Mezzanine Debt Commitment Letter from Endeavour Structured Equity and Mezzanine Fund I, LP (the “Financing Proceeds Condition”);

• that since December 22, 2010, there has not occurred any change, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a “Material Adverse Effect” with respect to Todd (as defined on page 40);

• that the Todd Board has not withdrawn or changed its recommendation that holders of Shares tender their shares in the Offer and, if necessary, vote their Shares in favor of the adoption of the Merger Agreement and to approve the Merger;

• that as of immediately prior to the closing of the purchase of the Shares, Todd is solvent (determined before giving effect to the incurrence of the Financing (as defined on page 3) and the consummation of the transactions contemplated by the Merger Agreement and the Financing);

• that Todd and Parent have not reached an agreement that the Offer or the Merger Agreement be terminated in accordance with its terms; and

• that Frank Foti, the President, Chairman and Manager of Parent, who owns 98% of the equity interests of Parent and whose presence is critical to the successful completion of the Offer and the Merger, has not died or become disabled.

The Offer is also subject to other conditions. See Section 9 — “Source and Amount of Funds” and Section 15 — “Conditions of the Offer.”

2

Do you have the financial resources to pay for all of the Shares that you are offering to purchase in the Offer?

We estimate that we will need up to approximately $130 million to purchase all of the issued and outstanding Shares and to cash out all outstanding Todd restricted stock units and stock settled appreciation rights, approximately $12.5 million to pay related fees and expenses, and approximately $29.7 million to repay indebtedness of Parent at the closing of the Merger. We have received a commitment from our lenders to provide us with (i) a senior secured credit facility in an aggregate amount of $145 million (the “Senior Secured Facilities”), comprised of a $120 million term loan facility and a $25 million revolving credit facility and (ii) mezzanine debt in the form of senior subordinated notes in the amount of $15 million (the “Mezzanine Debt”, and together with the Senior Secured Facilities, the “Financing”). Subject to certain conditions, the Financing will be available to us to finance the Offer and the Merger, repay certain existing indebtedness of Parent and pay related fees and expenses and provide for ongoing working capital and for other general corporate purposes of Todd. Proceeds of the Financing, together with cash on hand at Todd at closing and cash from Parent and its affiliates, will be sufficient to pay the Offer Price for all Shares tendered in the Offer and payouts with respect to Todd restricted stock and stock settled appreciation rights, and all related fees and expenses. The Financing is subject to certain conditions. If we do not receive the proceeds of the Financing, we will not be obligated to purchase Shares in the Offer. See Section 9 — “Source and Amount of Funds.”

If the Merger Agreement is terminated because we do not receive the proceeds of the Financing, we may be obligated to pay Todd a termination fee of $6,500,000.

Is your financial condition relevant to my decision to tender in the Offer?

We do not think that our financial condition is relevant to your decision whether to tender Shares and accept the Offer because:

• Purchaser was organized solely in connection with the Offer and the Merger and, prior to the Expiration Date, will not carry on any activities other than in connection with the Offer and the Merger;

• the Offer is being made for all outstanding Shares solely for cash;

• if we consummate the Offer, we expect to acquire all remaining Shares for the same cash price in the Merger; and

• we have received debt commitments in respect of funds sufficient to purchase all Shares tendered pursuant to the Offer.

See Section 9 — “Source and Amount of Funds” and Section 11 — “The Merger Agreement; Other Agreements.”

How long do I have to decide whether to tender in the Offer?

You will have until midnight, New York City time, on January 28, 2011, to tender your Shares in the Offer, subject to extension of the Offer or the earlier termination of the Offer, each in accordance with the Merger Agreement. Further, if you cannot deliver everything that is required to make a valid tender by that time, you may be able to use a guaranteed delivery procedure by which a broker, a bank, or any other fiduciary that is an eligible institution may guarantee that the missing items will be received by the Depositary within three New York Stock Exchange (“NYSE”) trading days. See Section 1 — “Terms of the Offer” and Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

Can the Offer be extended and under what circumstances can or will the Offer be extended?

Yes, the Offer can be extended beyond the January 28, 2011 expiration date (the “Original Expiration Date”), but in no event will we be required to extend the Offer beyond March 11, 2011.

3

Pursuant to the Merger Agreement, the Offer may be extended beyond the Original Expiration Date in the following circumstances:

• if Todd delivers written notice to us at least four business days prior to the Original Expiration Date that it elects to extend the No-Shop Period Start Date (as defined on page 44) for up to 14 days, we will extend the Original Expiration Date for an equal period of time;

• if, at the Original Expiration Date or the extended expiration date, if Todd has exercised the extension described the first bullet above, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, we will extend the Offer for up to ten business days (the number of days to be mutually agreed by us and Todd) and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then we may elect to extend the Offer for one and only one extension of less than five business days;

• if, after the application of the extension provisions in the first two bullets, at any then scheduled expiration date, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, we must extend the Offer in consecutive increments of up to five business days (or such longer period as we and Todd agree) provided that if the Proxy Statement Clearance Date (as defined below) has occurred on or prior to February 11, 2011, then no such extension is required, but at our or Todd’s election, we will extend the Offer in increments of up to five business days (or such longer period as we and Todd agree) each until the Proxy Statement Clearance Date, and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then we may elect to extend the Offer for one and only one extension of less than five business days, but only to the extent we have not exercised our similar extension right described in the second bullet above; and

• we must extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or NYSE applicable to the Offer, but are not required to extend the offer under this provision beyond February 11, 2011.

“Proxy Statement Clearance Date” means the date on which the SEC has, orally or in writing, confirmed that it has no further comments on the proxy statement to be filed by Todd related to the adoption of the Merger Agreement by the stockholders of Todd (the “Proxy Statement”), including the first date following the tenth calendar day following the filing of the preliminary Proxy Statement if the SEC has not informed Todd that it intends to review the Proxy Statement.

If we extend the time period of this Offer, this extension will extend the time that you will have to tender your Shares. See Section 1 — “Terms of the Offer” for more details on our ability to extend the Offer.

How will I be notified if the Offer is extended?

If we extend the Offer, we will inform the Depositary of that fact and will make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day of the scheduled Expiration Date. See Section 1— “Terms of the Offer.”

How do I tender my Shares?

To tender your Shares, you must deliver the certificates representing your Shares, together with a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, to the Depositary not later than the time the Offer expires. If your Shares are held in street name (i.e., through a broker, dealer or other nominee), your Shares can be tendered by your nominee through The Depository Trust Company. If you are unable to deliver any required document or instrument to the Depositary by the expiration of the Offer, you may gain some extra time by having a broker, a bank or any other fiduciary that is an eligible guarantor institution guarantee that the missing items will be received by the Depositary by using the enclosed Notice of Guaranteed Delivery. For the tender to be valid, however, the Depositary must receive the missing items within three NYSE trading days. See Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

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Until what time may I withdraw previously tendered Shares?

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after February 28, 2011, which is the 60th day after the commencement of the Offer, unless we have already accepted such Shares have for payment pursuant to the Offer. If you tendered your Shares by giving instructions to a broker, dealer or other nominee, you must instruct your broker, dealer or other nominee to arrange for the withdrawal of your Shares. See Section 4 — “Withdrawal Rights.”

How do I withdraw previously tendered Shares?

To withdraw any of your previously tendered Shares, you must deliver a written notice of withdrawal with the required information to the Depositary while you still have the right to withdraw such Shares. If you tendered your Shares by giving instructions to a broker, dealer or other nominee, you must instruct your broker, dealer or other nominee to arrange for the withdrawal of your Shares. See Section 4 — “Withdrawal Rights.”

If the Offer is completed, will Todd continue as a public company?

No. Following the purchase of Shares in the Offer, we plan to immediately consummate the Merger. If the Merger takes place, Todd will no longer be publicly owned.

We do not intend to complete the Offer and purchase the tendered Shares if, even after the full exercise of the Top-Up, it would result in us owning less than 90% of the Shares and therefore being unable to complete a short-form Merger. However, if for some reason the Merger does not take place but we purchase all of the tendered Shares, then there may be so few remaining stockholders and publicly held Shares that Todd common stock will no longer be eligible to be traded on NYSE or any other securities exchange, there may not be a public trading market for the common stock of Todd, and Todd may no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly held companies. See Section 13 — “Certain Effects of the Offer.”

If you do not complete the Offer, will you nevertheless complete the Merger?

If the Minimum Tender Condition is not met, and in certain other circumstances, the parties have agreed to complete the Merger without the prior completion of the Offer after receipt of the approval of a majority of the stockholders of Todd for the adoption of the Merger Agreement. In that case, the consummation of the Merger would be subject to conditions similar to the Offer conditions, other than the inapplicability of (i) the Minimum Tender Condition, (ii) the Financing Proceeds Condition, (iii) the condition regarding exercise of the Top-Up, and (iv) and the condition regarding the occurrence of a Triggering Event. However, either party would have the right to terminate the Merger Agreement, and therefore would not complete the Merger, if fewer than 40% of the outstanding Shares are tendered and not withdrawn in response to the Offer.

If we do not complete the Offer, Todd has agreed to hold a meeting of its stockholders to consider and vote on the adoption of the Merger Agreement and will separately mail the Proxy Statement to holders of record of Shares as of the record date for the stockholder meeting. We are not asking you to take any action with respect to the Merger at this time.

If I object to the price being offered, will I have appraisal rights?

You will not have appraisal rights in the Offer. However, if the Merger takes place, stockholders who have not tendered their Shares in the Offer and who comply with the applicable legal requirements will have appraisal rights under Delaware law. If you have and choose to exercise your appraisal rights in connection with the Merger and you comply with the applicable legal requirements under Delaware law, you will be entitled to payment for your Shares based on a judicial determination of the fair value of your Shares. This value may be more or less than the price that we are offering to pay you for your Shares in the Offer. See Section 12 — “Purpose of the Offer; Plans for Todd.”

5

If I decide not to tender, how will the Offer affect my Shares?

If the Merger is consummated and you have not tendered your Shares in the Offer, you will receive the same amount of cash per Share that you would have received had you tendered your Shares in the Offer, subject to any appraisal rights properly exercised under Delaware law. Therefore, if the Merger takes place, the only difference to you between tendering your Shares and not tendering your Shares is that if you tender your Shares, you may be paid earlier and no appraisal rights will be available. If we purchase all of the tendered Shares and the Merger does not take place, however, the number of stockholders and the number of Shares that are held by the public may be so small that there no longer will be an active public trading market (or, possibly, there may not be any public trading market) for the Shares. Also, as described above, Todd may no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly held companies. See the “Introduction” and Section 13 — “Certain Effects of the Offer.”

What is the market value of my Shares as of a recent date?

On December 22, 2010, the last trading day before we announced the Offer, the last sale price of the Shares reported on the NYSE was $21.00 per Share. On December 28, 2010, the last trading day when the sale price of Shares was available before we commenced the Offer, the last sale price of the Shares reported on the NYSE was $22.36 per Share. We encourage you to obtain a recent quotation for Shares in deciding whether to tender your Shares. See Section 6 — “Price Range of Shares; Dividends.”

Have any stockholders already agreed to tender their Shares in the Offer or to otherwise support the Offer?

Yes. Concurrently with the execution of the Merger Agreement, we entered into a stockholder tender and voting agreement with all of Todd’s directors and executive officers and Woodbourne Partners, L.P., a private investment company that holds Shares (the “Stockholder Tender Agreement”), pursuant to which such stockholders have agreed to tender their Shares in the Offer upon the terms and subject to the conditions of such agreement and have given a proxy to Parent and Purchaser or have otherwise agreed to vote their Shares in favor of the adoption of the Merger Agreement to approve the Merger, if necessary. The Shares subject to the Stockholder Tender Agreement comprise approximately 15.3% of the outstanding Shares. The Stockholder Tender Agreement will terminate upon certain circumstances, including upon termination of the Merger Agreement. See Section 12 — “Purpose of the Offer; Plans for Todd.”

If I tender my Shares, when and how will I get paid?

If the conditions to the Offer as set forth in Section 15 — “Conditions of the Offer” are satisfied or waived and we consummate the Offer and accept your Shares for payment, we will pay you an amount equal to the number of Shares you tendered multiplied by $22.27 in cash, without interest, less any applicable withholding and transfer taxes promptly following expiration of the Offer. See Section 1 — “Terms of the Offer” and Section 2 — “Acceptance for Payment and Payment of Shares.”

What is the Top-Up and when will it be exercised?

If we acquire at least 90% of the outstanding Shares, including through exercise of the Top-Up, we will complete the Merger through the “short form” procedures available under Delaware law. Todd has granted to us an irrevocable right (the “Top-Up”), which may be automatically exercised immediately following consummation of the Offer, if necessary, to purchase from Todd the number of Shares (“Top-Up Shares”) that, when added to the Shares already owned by us following consummation of the Offer, constitutes at least 90% of the then outstanding Shares, provided that we may only purchase up to the number of Shares that are authorized but unissued at the time of exercise of the Top-Up. Based on representations and warranties of Todd in the Merger Agreement concerning the number of authorized but unissued Shares on the date of this Offer, we estimate that the Top-Up will be automatically exercised if approximately 67% of all issued and outstanding Shares are tendered in the Offer. See Section 12 — “Purpose of the Offer; Plans for Todd” and Section 16 — “Certain Legal Matters; Regulatory Approvals.”

6

What will happen to my restricted stock units in the Offer?

The Offer is made only for Shares and is not made for any equity incentive awards. Upon the consummation of the Merger, each outstanding restricted stock unit granted pursuant to Todd’s equity compensation plan will be canceled in consideration for the right to receive a cash payment equal to the Offer Price multiplied by the maximum number of Shares subject to such restricted stock unit, less any applicable withholding taxes. See Section 11 — “The Merger Agreement; Other Agreements.”

What will happen to my stock settled appreciation rights in the Offer?

Upon the consummation of the Merger, each outstanding stock settled appreciation right granted pursuant to Todd’s equity compensation plan will be canceled in consideration for the right to receive a cash payment equal to (i) the excess, if any, of the Offer Price over the per share exercise price of the Shares linked to such stock settled appreciation right, multiplied by (ii) the number of Shares linked to such stock settled appreciation right, less any applicable withholding taxes. See Section 11 — “The Merger Agreement; Other Agreements.”

What will happen to my restricted stock in the Offer?

Immediately prior to the consummation of the Merger, each outstanding share of restricted stock that has not vested, will vest, will be treated as a Share in the Merger, and will be exchanged for the right to receive an amount equal to $22.27 per Share, without interest and less any applicable withholding and transfer taxes. See Section 11 — “The Merger Agreement; Other Agreements.”

What are the United States federal income tax consequences of the Offer and the Merger?

If you are a United States Holder (as defined on page 18), your receipt of cash in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. In general, you will recognize gain or loss equal to the difference between your adjusted tax basis in the Shares you tender or exchange and the amount of cash you receive for those Shares. If you hold your Shares as a capital asset, the gain or loss that you recognize will be a capital gain or loss and will be treated as a long-term capital gain or loss if you have held such Shares more than one year. If you are a non-United States Holder, the receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger generally will be exempt from United Stated federal income tax. You should consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger. See Section 5 — “Certain United States Federal Income Tax Consequences” for a more detailed discussion of certain United States federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the Merger.

Who should I talk to if I have additional questions about the Offer?

You may call Phoenix Advisory Partners, the Information Agent for the Offer, toll-free at (800) 576-4314. Banks and brokers may call collect at (212) 493-3910.

7

INTRODUCTION

Nautical Miles, Inc. (“Purchaser”), a Delaware corporation and a wholly-owned subsidiary of Vigor Industrial LLC (“Parent”), an Oregon limited liability company, is offering to purchase for cash all outstanding shares of common stock, par value $0.01 per share (“Shares”), of Todd Shipyard Corporation, a Delaware corporation (“Todd”), at a price of $22.27 per Share (the “Offer Price”), net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions set forth in this offer to purchase (together with any amendments and supplements, this “Offer to Purchase”) and in the related letter of transmittal (together with any amendments and supplements, the “Letter of Transmittal,” and, together with this Offer to Purchase, collectively constitute the “Offer”). The Offer and the withdrawal rights will expire at midnight, New York City time, on January 28, 2011 (the “Expiration Date,” unless the Offer is extended, in which event the term “Expiration Date” means the latest time and date on which the Offer, so extended, expires) or terminated in accordance with the terms of the Merger Agreement (as defined below).

We are making this Offer pursuant to the Agreement and Plan of Merger, dated as of December 22, 2010 (the “Merger Agreement”), by and among Parent, Purchaser and Todd. The Merger Agreement provides that Purchaser will be merged with and into Todd (the “Merger”), with Todd continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Parent. Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each Share outstanding immediately prior to the Effective Time (other than Shares owned by Todd, Purchaser or Parent, or shares held in Todd’s treasury, all of which will be canceled, and other than Shares that are held by stockholders, if any, who are entitled to and have properly exercised their appraisal rights under Section 262 of the Delaware General Corporation Law (the “DGCL”)) will be converted into the right to receive $22.27 in cash, without interest and less any applicable withholding and transfer taxes (the “Merger Consideration”). The Merger Agreement is more fully described in Section 11 — “The Merger Agreement; Other Agreements,” which also contains a discussion of the treatment of Todd restricted stock, restricted stock units and stock settled appreciation rights.

Tendering stockholders who are record owners of their Shares and tender directly to the Depositary (as defined on page 8) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker, dealer or other nominee should consult such institution as to whether it charges any service fees. Parent or Purchaser will pay all charges and expenses of American Stock Transfer & Trust Company, as depositary for the Offer (the “Depositary”), and Phoenix Advisory Partners, as information agent for the Offer (the “Information Agent”), incurred in connection with the Offer. See Section 17 — “Fees and Expenses.”

After careful consideration, Todd’s board of directors (the “Todd Board”) by a unanimous vote of the disinterested directors (i) determined that the Merger Agreement, the Offer, the Merger, and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer, and to the extent required by applicable law, approve the Merger and adopt the Merger Agreement.

A more complete description of the Todd Board reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is contained in Todd’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), that is being furnished to stockholders in connection with the Offer. Stockholders should carefully read the information set forth in the Schedule 14D-9, including the information set forth under the sub-heading “Background of the Offer and Merger; Reasons for Recommendation.”

8

The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement, including, among other things, (i) that the number of Shares that have been validly tendered and not properly withdrawn before the Expiration Date, together with any Shares then owned by Parent and its subsidiaries and the number of Shares that may be validly issued as Top-Up Shares (as defined on page 38), equals at least 90% of the Shares outstanding as of the Expiration Date on a fully diluted basis (the “Minimum Tender Condition”); (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any other applicable federal, state or foreign laws regulating competition and the receipt of any required approval from a governmental entity that is necessary for the consummation of the transactions contemplated by the Merger Agreement (the “Competition Law Condition”); (iii) the receipt by Parent or Purchaser (either directly or through their subsidiaries) of proceeds under (a) a Debt Commitment Letter from GE Capital Markets, Inc., General Electric Capital Corporation and KeyBank National Association and (b) a Mezzanine Debt Commitment Letter from Endeavour Structured Equity and Mezzanine Fund I, LP (the “Financing Proceeds Condition”); (iv) the absence of any law, judgment, or injunction in effect that could reasonably be expected to directly or indirectly have certain adverse effects on the transactions contemplated by the Merger Agreement or Parent, Todd, or any of their respective Subsidiaries; (v) that since December 22, 2010, there has not occurred any change, event or occurrence that, individual or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect with respect to Todd; (vi) that the Todd Board has not withdrawn or changed its recommendation that holders of Shares tender their Shares in the Offer and, if necessary, vote their Shares in favor of the adoption of the Merger Agreement to approve the Merger; (vii) that if the exercise of the Top-Up (as defined on page 38) is necessary to ensure that Parent and Purchaser collectively own at least 90% of the Shares immediately after the completion of the Offer, there does not exist under applicable law or other legal restraint any restriction or legal impediment on Purchaser’s ability and right to exercise the Top-Up, and the Shares issuable upon exercise of the Top-Up, together with any Shares held by Parent and Purchaser (including Shares validly tendered in the Offer), constitute at least 90% of the outstanding Shares; (viii) that as of immediately prior to the closing of the purchase of the Shares, Todd is solvent; (ix) that a Triggering Event (as defined on pages 50-51) has not occurred and remains continuing; (x) that Todd and Parent have not reached an agreement that the Offer or the Merger Agreement be terminated; and (xi) that Frank Foti, the President, Chairman and Manager of Parent, who owns 98% of the equity interests of Parent and whose presence is critical to the successful completion of the Offer and the Merger, has not died or become disabled. The Offer is also subject to other conditions. See Section 9 — “Source and Amount of Funds” and Section 15 — “Conditions of the Offer.”

Todd has advised Parent that, on December 15, 2010, 5,787,231 Shares were issued and outstanding. Assuming that no Shares are issued after December 15, 2010, there would be 5,787,231 Shares outstanding and the Minimum Tender Condition would be satisfied if at least 67% of the Shares are validly tendered and not withdrawn prior to the Original Expiration Date (including the 15.3% of the Shares subject to the Stockholder Tender Agreement).

Pursuant to the Merger Agreement, effective upon the closing of the Offer, if Purchaser holds at least 90% of the outstanding Shares, Purchaser will be entitled to designate a number of directors, rounded up to the next whole number, subject to compliance with applicable law, to the Todd Board that is equal to the total number of directors on the Todd Board (giving effect to the increase described in this sentence) multiplied by the percentage that the number of Shares beneficially owned by Parent and Purchaser (including shares accepted for payment) bears to the total number of shares then outstanding, and Todd will cause Parent’s designees to be elected or appointed to the Todd Board. However, if Parent’s designees are appointed or elected to the Todd Board, until the effective time of the Merger, the Todd Board will have at least two independent directors (as defined by the rules of the New York Stock Exchange (“NYSE”)). At such time, Todd will also cause individuals designated by Parent to constitute the proportional number of members, rounded up to the next whole number, on each committee of the Todd Board, to the fullest extent permitted by applicable law and the rules of NYSE. Information concerning Purchaser’s designees to the Todd Board is set forth in the Information Statement attached as Annex I to the Schedule 14D-9 (the “Information Statement”).

9

The Merger is subject to the satisfaction or waiver of certain conditions, including, if required, the adoption of the Merger Agreement by the affirmative vote of the holders of at least a majority of the then outstanding Shares. This Offer to Purchase does not constitute a solicitation of proxies, and Purchaser is not soliciting proxies at this time. If Purchaser acquires at least 90% of the Shares in the Offer, including pursuant the Top-Up (as defined on page 38), if applicable, Purchaser will consummate the Merger under the DGCL without a stockholders’ meeting and without the need for approval of Todd’s other stockholders. If the Minimum Tender Condition is not met, and in certain other circumstances, the parties have agreed to complete the Merger without the prior completion of the Offer, after receipt of the approval of a majority of Todd’s stockholders for the adoption of the Merger Agreement. In that case, the consummation of the Merger would be subject to similar conditions as the Offer conditions, other than the addition of the stockholder approval requirement and other than the inapplicability of (i) the Minimum Tender Condition, (ii) the Financing Proceeds Condition, (iii) the condition regarding exercise of the Top-Up, (iv) the condition regarding the recommendation of the Todd Board, and (v) and the condition regarding the occurrence of a Triggering Event. Certain United States federal income tax consequences of the sale of Shares pursuant to the Offer and the exchange of Shares pursuant to the Merger are described in Section 5 — “Certain United States Federal Income Tax Consequences.”

This Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.

10

THE TENDER OFFER

1. Terms of the Offer.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), we will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn as permitted under Section 4 — “Withdrawal Rights.”

The Offer is conditioned upon the satisfaction of the Minimum Tender Condition, the Financing Proceeds Condition and the other conditions set forth in Section 15 — “Conditions of the Offer.” Subject to the provisions of the Merger Agreement, we may waive any or all of the conditions to our obligation to purchase Shares pursuant to the Offer other than (i) the Minimum Tender Condition and (ii) the Competition Law Condition, which may only be waived with the prior written consent of Todd.

Pursuant to the Merger Agreement, the Offer may be extended beyond the initial expiration date of January 28, 2011 (the “Original Expiration Date”) in the following circumstances:

• if Todd delivers written notice to Parent at least four business days prior to the Original Expiration Date that it elects to extend the No-Shop Period Start Date (as defined on page 44) for up to 14 days, the offer will be extended beyond the Original Expiration Date for an equal period of time;

• if, at the Original Expiration Date or the extended expiration date, if Todd has exercised the extension described the first bullet above, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent will extend the Offer for up to ten business days (the number of days to be mutually agreed by Parent and Todd) and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days;

• if, after the application of the extension provisions in the first two bullets, at any then scheduled expiration date, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent must extend the Offer in consecutive increments of up to five business days (or such longer period as Parent and Todd agree) provided that if the Proxy Statement Clearance Date (as defined below) has occurred on or prior to February 11, 2011, then no such extension is required, but at Parent’s or Todd’s election, the Offer will be extended in increments of up to five business days (or such longer period as Parent and Todd agree) each until the Proxy Statement Clearance Date, and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days, but only to the extent Parent has not exercised a similar extension right described in the second bullet above; and

• Parent must extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the “SEC”) or its staff or NYSE applicable to the Offer, but is not required to extend the offer under this provision beyond February 11, 2011.

“Proxy Statement Clearance Date” means the date on which the SEC has, orally or in writing, confirmed that it has no further comments on the proxy statement to be filed by Todd related to the adoption of the Merger Agreement by the stockholders of Todd (the “Proxy Statement”), including the first date following the tenth calendar day following the filing of the preliminary Proxy Statement if the SEC has not informed Todd that it intends to review the Proxy Statement.

Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, we expressly reserve the right, in our sole discretion, at any time or from time to time, (i) to extend the Offer if any of the conditions set forth in Section 15 — “Conditions of the Offer” have occurred, (ii) to waive any condition to the Offer (other than the Minimum Tender Condition or the Competition Law Condition) or (iii) to otherwise amend the Offer in any respect, in each case by giving oral or written notice of such extension, termination, waiver or amendment to the Depositary and by making a public announcement thereof.

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If we extend the Offer, are delayed in our acceptance for payment of or payment (whether before or after our acceptance for payment for Shares) for Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in Section 4 — “Withdrawal Rights.” However, our ability to delay the payment for Shares that we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires us to promptly pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.

If we make a material change in the terms of the Offer or the information concerning the Offer, or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. In the SEC’s view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and with respect to a change in price or a change in percentage of securities sought, a minimum ten business day period generally is required to allow for adequate dissemination to stockholders and investor response. Accordingly, if, prior to the Expiration Date, with the consent of the Company, we decrease the number of Shares being sought or increase the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such tenth business day.

If, on or before the Expiration Date, we increase the consideration being paid for Shares accepted for payment in the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which we may choose to make any public announcement, we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service. As used in this Offer to Purchase, “business day” means any day other than a Saturday, Sunday or a federal holiday, and will consist of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

Todd has provided us with its stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Todd’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

2. Acceptance for Payment and Payment for Shares.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), we will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn pursuant to the Offer not later than the fourth business day after the Expiration Date and in any event in accordance with Rule 14(e)-1(d) under

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the Exchange Act. Subject to the Merger Agreement and in compliance with Rule 14e-1(c) under the Exchange Act, we expressly reserve the right to delay payment for Shares to comply in whole or in part with any applicable law, including receipt of regulatory or government approvals. See Section 16 — “Certain Legal Matters; Regulatory Approvals.”

In all cases, payment for Shares accepted pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the “Share Certificates”) or confirmation (a “Book-Entry Confirmation”) of a book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined on page 14) in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when Share Certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.

For purposes of the Offer, we will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn, if and when we give oral or written notice to the Depositary of our acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from us and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or we are unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to our rights under the Offer, the Depositary may, nevertheless, on our behalf, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 4 — “Withdrawal Rights” and as otherwise required by Rule 14e-1(c) under the Exchange Act.

Under no circumstances will interest on the Offer Price for Shares be paid, regardless of any extension of the Offer or delay in making such payment.

If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased or untendered Shares will be returned, without expense, to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), promptly following the expiration or termination of the Offer.

If, before the Expiration Date, we increase the price being paid for Shares, we will pay the increased consideration for all Shares purchased pursuant to the Offer, whether or not those Shares were tendered prior to the increase in consideration.

3. Procedures for Accepting the Offer and Tendering Shares.

Valid Tenders. For a Company stockholder to validly tender Shares pursuant to the Offer, either (i) the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal), and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either the Share certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each

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case prior to the Expiration Date, or (ii) the tendering stockholder must comply with the guaranteed delivery procedures described below. No alternative, conditional or contingent tenders will be accepted.

Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, an Agent’s Message (as defined below) and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, that states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce such agreement against such participant.

Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the registered holder (which term, for purposes of this Section 3, includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such holder has completed either the section entitled “Special Delivery Instructions” or the section entitled “Special Payment Instructions” in the Letter of Transmittal or (ii) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of or participant in a recognized “Medallion Program” approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act (each, what we refer to as an “Eligible Institution” and collectively what we refer to as “Eligible Institutions”). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share certificate not accepted for payment or not tendered is to be issued in the name of or returned to, a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock power, in either case signed exactly as the name(s) of the registered holder(s) appears on the Share certificate, with the signature(s) on such Share certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.

Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and the Share certificates evidencing such stockholder’s Shares are not immediately available or such stockholder cannot deliver the Share certificates and all other required documents to the Depositary prior to the Expiration Date, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered; provided that all of the following conditions are satisfied:

(i) such tender is made by or through an Eligible Institution;

(ii) a properly completed and duly executed “Notice of Guaranteed Delivery,” substantially in the form made available by Purchaser, is received prior to the Expiration Date by the Depositary as provided below; and

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(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and any other documents required by the Letter of Transmittal are received by the Depositary within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be delivered by overnight courier or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by Purchaser. In the case of Shares held through the Book-Entry Transfer Facility, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant by means of the confirmation system of the Book-Entry Transfer Facility. Pursuant to the Merger Agreement, Shares delivered by a Notice of Guaranteed Delivery do not need to be counted by Purchaser toward the satisfaction of the Minimum Tender Condition and therefore it is preferable for Shares to be tendered by the other methods described in this Offer to Purchase.

The method of delivery of Share certificates, the Letter of Transmittal, and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, receipt of a Book-Entry Confirmation). If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s acceptance of the terms and conditions of the Offer, as well as the tendering stockholder’s representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal, and that when we accept the Shares for payment, we will acquire good and unencumbered title, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. Our acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Offer.

Determination of Validity. All questions as to the validity, form, eligibility (including, without limitation, time of receipt) and acceptance for payment of any tender of Shares will be determined by us in our reasonable discretion, which determination will be final and binding on all parties. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to our satisfaction. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Our interpretation of the terms and conditions of the Offer (including, without limitation, the Letter of Transmittal and the instructions thereto) will be final and binding.

Appointment. By executing the Letter of Transmittal (or delivering an Agent’s Message) as set forth above, the tendering stockholder will irrevocably appoint designees of Purchaser, and each of them, as such stockholder’s attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder’s rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, we accept for payment Shares tendered by such stockholder as provided in this Offer to Purchase. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such

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Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective) with respect thereto. Each of our designees will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of Todd’s stockholders, actions by written consent in lieu of any such meeting or otherwise, as such designee in its sole discretion deems proper. We reserve the right to require that, for Shares to be deemed validly tendered, immediately upon our acceptance for payment of such Shares, we must be able to exercise full voting, consent and other rights with respect to such Shares and other securities and rights, including voting at any meeting of stockholders.

Backup Withholding. Under the “backup withholding” provisions of United States federal income tax law, the Depositary may be required to withhold and pay over to the Internal Revenue Service (“IRS”) a portion (currently, 28%) of the amount of any payments we make pursuant to the Offer. To prevent backup withholding from being imposed on the payment of the Offer Price of Shares purchased pursuant to the Offer, each United States Holder (as defined on page 18) must provide the Depositary with such stockholder’s correct taxpayer identification number (“TIN”) and certify that such stockholder is not subject to backup withholding by completing IRS Form W-9 included in the Letter of Transmittal or otherwise establish a valid exemption from backup withholding to the satisfaction of the Depositary. If a stockholder does not provide its correct TIN or fails to provide the certifications described above, the IRS may impose a penalty on the stockholder and payment of cash to the stockholder pursuant to the Offer may be subject to backup withholding. All United States Holders (as defined on page 18) surrendering Shares pursuant to the Offer should complete and sign the IRS Form W-9 included in the Letter of Transmittal to provide the information necessary to avoid backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding and payments to such persons will not be subject to backup withholding provided that a valid exemption is established to the satisfaction of the Depositary. Each tendering non-United States Holder (as defined on page 18) should submit an appropriate properly completed IRS Form W-8 (a copy of which may be obtained from the Depositary) certifying, under penalties of perjury, to such non-United States Holder’s foreign status to establish an exemption from backup withholding. See Instruction 9 of the Letter of Transmittal.

4. Withdrawal Rights.

Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after February 28, 2011, which is the 60th day after the commencement of the Offer, unless we have already accepted such Shares for payment pursuant to the Offer.

For a withdrawal to be effective, a written notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share certificates, the serial numbers shown on such Share certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.

If we extend the Offer, are delayed in our acceptance for payment of Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the

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Depositary may, nevertheless, on our behalf, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in this Offer to Purchase.

Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

All questions as to the form and validity (including, without limitation, time of receipt) of any notice of withdrawal will be determined by us, in our reasonable discretion, which determination will be final and binding. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

5. Certain United States Federal Income Tax Consequences.

The following is a summary of the material United States federal income tax consequences to beneficial owners of Shares upon the tender of Shares for cash pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger. This summary is general in nature and does not discuss all aspects of United States federal income taxation that may be relevant to a holder of Shares in light of its particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any local, state or foreign jurisdiction and does not consider any aspects of United States federal tax law other than income taxation. This summary deals only with Shares held as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment), and does not address tax considerations applicable to any holder of Shares that may be subject to special treatment under the United States federal income tax laws, including:

• a bank or other financial institution;

• a tax-exempt organization;

• a retirement plan or other tax-deferred account;

• a partnership, an S corporation or other pass-through entity (or an investor in a partnership, S corporation or other pass-through entity);

• an insurance company;

• a mutual fund;

• a real estate investment trust;

• a dealer or broker in stocks and securities, or currencies;

• a trader in securities that elects mark-to-market treatment;

• a holder of Shares subject to the alternative minimum tax provisions of the Code;

• a holder of Shares that received the Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

• a person that has a functional currency other than the United States dollar;

• a person that holds the Shares as part of a hedge, straddle, constructive sale, conversion or other integrated transaction;

• a United States expatriate;

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• any holder of Shares that entered into a Stockholder Tender Agreement as part of the transactions described in this Offer to Purchase; or

• any holder of Shares that beneficially owns, actually or constructively, or at some time during the 5-year period ending on the date of the exchange has beneficially owned, actually or constructively, more than 5% of the total fair market value of the Shares.

If a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes) holds Shares, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. Such holders should consult their own tax advisors regarding the tax consequences of exchanging the Shares pursuant to the Offer or pursuant to the Merger.

This summary is based on the Code, the Treasury regulations promulgated under the Code, and rulings and judicial decisions, all as in effect as of the date of this Offer to Purchase, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed in this Offer to Purchase, or that a court will not sustain any challenge by the IRS in the event of litigation.

The discussion set out in this Offer to Purchase is intended only as a summary of the material United States federal income tax consequences to a holder of Shares. We urge you to consult your own tax advisor with respect to the specific tax consequences to you in connection with the Offer and the Merger in light of your own particular circumstances, including federal estate, gift and other non-income tax consequences, and tax consequences under state, local or foreign tax laws.

United States Holders

For purposes of this discussion, the term “United States Holder” means a beneficial owner of Shares that is, for United States federal income tax purposes:

• a citizen or resident of the United States;

• a corporation (or any other entity or arrangement treated as a corporation for United States federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;

• an estate, the income of which is subject to United States federal income taxation regardless of its source; or

• a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) the trust has validly elected to be treated as a “United States person” under applicable Treasury regulations.

Payments with Respect to Shares

The exchange of Shares for cash pursuant to the Offer or pursuant to the Merger will be a taxable transaction for United States federal income tax purposes, and a United States Holder who receives cash for Shares pursuant to the Offer or pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Shares exchanged therefor. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction). Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such United States Holder’s holding period for the Shares is more than one year at the time of the exchange. Long-term capital gain recognized by an individual holder generally is subject to tax at a lower rate than short-term capital gain or ordinary income. There are limitations on the deductibility of capital losses.

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Backup Withholding Tax

Proceeds from the exchange of Shares pursuant to the Offer or pursuant to the Merger generally will be subject to backup withholding tax at the applicable rate (currently, 28%) unless the applicable United States Holder or other payee provides a valid taxpayer identification number and complies with certain certification procedures (generally, by providing a properly completed IRS Form W-9) or otherwise establishes an exemption from backup withholding tax. Any amounts withheld under the backup withholding tax rules from a payment to a United States Holder will be allowed as a credit against that holder’s United States federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS. Each United States Holder should complete and sign the IRS Form W-9, which will be included with the Letter of Transmittal to be returned to the Depositary, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the Depositary.

Non-United States Holders

The following is a summary of the material United States federal income tax consequences that will apply to you if you are a non-United States Holder of Shares. The term “non-United States Holder” means a beneficial owner of Shares that is:

• a nonresident alien individual;

• a foreign corporation; or

• a foreign estate or trust.

The following discussion applies only to non-United States Holders, and assumes that no item of income, gain, deduction or loss derived by the non-United States Holder in respect of Shares at any time is effectively connected with the conduct of a United States trade or business. Special rules, not discussed in this Offer to Purchase, may apply to certain non-United States Holders, such as:

• certain former citizens or residents of the United States;

• controlled foreign corporations;

• passive foreign investment companies;

• corporations that accumulate earnings to avoid United States federal income tax;

• investors in pass-through entities that are subject to special treatment under the Code; and

• non-United States Holders that are engaged in the conduct of a United States trade or business.

Payments with Respect to Shares

Payments made to a non-United States Holder with respect to Shares exchanged for cash in the Offer or pursuant to the Merger generally will be exempt from United States federal income tax. However, if the non-United States Holder is an individual who was present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met, such holder will be subject to tax at a flat rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on any gain from the exchange of the Shares, net of applicable United States-source losses from sales or exchanges of other capital assets recognized by the holder during the year.

Backup Withholding Tax

A non-United States Holder may be subject to backup withholding tax with respect to the proceeds from the disposition of Shares pursuant to the Offer or pursuant to the Merger, unless, generally, the non-United States Holder certifies under penalties of perjury on an appropriate IRS Form W-8 that such non-United States Holder is not a United States person, or the non-United States Holder otherwise establishes an exemption in a manner satisfactory to the Depositary.

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Any amounts withheld under the backup withholding tax rules will be allowed as a refund or a credit against the non-United States Holder’s United States federal income tax liability, provided the required information is furnished to the IRS.

The foregoing summary does not discuss all aspects of United States federal income taxation that may be relevant to particular holders of Shares. Holders of Shares should consult their own tax advisors as to the particular tax consequences to them of tendering their Shares for cash pursuant to the Offer or exchanging their Shares for cash in the Merger under any federal, state, foreign, local or other tax laws.

6. Price Range of Shares; Dividends.

The Shares are listed on the NYSE under the symbol “TOD.” The Shares have been listed on the NYSE since March 1969.

The following table sets forth for the indicated periods the high and low sales prices per Share as reported on the NYSE.

	High		Low
Year Ending March 28, 2011
First Quarter	$	17.19	$	14.00
Second Quarter	$	15.58	$	14.41
Third Quarter (through December 28, 2010)	$	23.25	$	14.75
Year Ended March 28, 2010
First Quarter	$	17.80	$	12.50
Second Quarter	$	17.80	$	15.51
Third Quarter	$	17.70	$	15.88
Fourth Quarter	$	17.14	$	13.98
Year Ended March 29, 2009
First Quarter	$	17.14	$	14.10
Second Quarter	$	15.80	$	12.67
Third Quarter	$	13.75	$	9.47
Fourth Quarter	$	14.50	$	10.11

On December 22, 2010, the last trading day before Todd announced that Parent and Todd had entered into the Merger Agreement, the last sale price of Shares reported on the NYSE was $21.00 per Share; therefore, the Offer Price of $22.27 per share represents a premium of approximately 6% over such price. On December 28, 2010, the last trading day when the sale price of Shares was available prior to the original printing of this Offer to Purchase, the last sale price of Shares reported on the NYSE was $22.36 per share.

Stockholders are urged to obtain current market quotations for Shares before making a decision with respect to the Offer.

During each quarter of fiscal years 2009 and 2010, Todd paid a quarterly cash dividend of $0.05 per Share. A dividend of $0.075 per share was paid on June 23, 2010. Under the terms of the Merger Agreement, Todd is not permitted to declare or pay dividends in respect of Shares other than the payment of the quarterly cash dividend declared by Todd on August 20, 2010 of $0.10 per Share and a dividend of $0.10 per Share contemplated to be declared in December 2010 to be paid after March 11, 2011 to stockholders of record as of a date that is after March 11, 2011.

7. Certain Information Concerning Todd.

The following description of Todd and its business has been taken from Todd’s Annual Report on Form 10-K for the fiscal year ended March 28, 2010, and is qualified in its entirety by reference to such report.

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General. Todd is incorporated under the laws of the State of Delaware and operates shipyards through its wholly-owned subsidiaries, Todd Pacific Shipyards Corporation (“Todd Pacific”) and Everett Shipyard, Inc. Todd Pacific has historically been engaged in the repair/overhaul, conversion and construction of commercial and military ships. Everett Shipyard, Inc. is engaged in repair, overhaul, and conversion work of commercial and government owned vessels.

Todd is the largest private shipyard operator in the Pacific Northwest. A substantial amount of Todd’s business is repair and maintenance work on commercial and federal government vessels engaged in various maritime activities in the Pacific Northwest. Todd also provides new construction and industrial fabrication services for a wide variety of customers. Todd’s customers include the U.S. Navy, the U.S. Coast Guard, Military Sealift Command, National Oceanic & Atmospheric Administration, Washington State Ferries, the Alaska Marine Highway System, fishing fleets, cargo shippers, tug and barge operators, and cruise lines.

Available Information. Todd is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Securities and Exchange Commission (“SEC”) relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Todd’s business, principal physical properties, capital structure, material pending litigation, operating results, financial condition, directors and officers (including their remuneration and equity awards granted to them), the principal holders of Todd’s securities, any material interests of such persons in transactions with Todd and other matters is required to be disclosed in proxy statements and periodic reports distributed to Todd’s stockholders and filed with the SEC. Such reports, proxy statements and other information should be available for inspection at the public reference facilities maintained by the SEC at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Copies of such materials may also be obtained by mail, upon payment of the SEC’s customary fees, by writing to its principal office at 100 F Street N.E., Washington, D.C. 20549. The SEC also maintains a web site on the Internet at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC. Todd also maintains a website at www.toddpacific.com. The information contained in, accessible from or connected to Todd’s website is not incorporated into, or otherwise a part of, this Offer to Purchase or any of Todd’s filings with the SEC. The website addresses referred to in this paragraph are inactive text references and are not intended to be actual links to the websites.

8. Certain Information Concerning Parent and Purchaser.

Purchaser. Nautical Miles, Inc., a Delaware corporation, or Purchaser, is a wholly-owned subsidiary of Parent and was formed solely for the purpose of facilitating the acquisition of Todd. To date, Purchaser has not carried on any activities other than those related to its formation, the Offer and the Merger and arranging the related financing. Purchaser has minimal assets and liabilities other than the contractual rights and obligations related to the Merger Agreement and the financing commitments and obligations under the Merger Agreement. Upon consummation of the proposed Merger, Purchaser will merge with and into Todd and will cease to exist, with Todd continuing as the surviving corporation. The business address for Purchaser is: 5555 N. Channel Ave., Portland, Oregon 97217. The business telephone number for Purchaser is (800) 505-1930.

Parent. Vigor Industrial LLC, an Oregon limited liability company, or Parent, through its subsidiaries operates several businesses that provide ship repair, building, scrapping, industrial fabrication, sand blasting, coating, vessel conversion, and machine shop operation services. The business address for Parent is: 5555 N. Channel Ave., Portland, Oregon 97217. The business telephone number for Parent is (800) 505-1930.

Additional Information. The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the directors and executive officers of Parent and Purchaser, and the control persons of Parent and Purchaser, are set forth in Schedule I. None of Parent and Purchaser nor, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I has during the past five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were

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dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Except as set forth elsewhere in this Offer to Purchase, (i) none of Parent and Purchaser nor, to the knowledge of Parent and Purchaser, any of the persons or entities listed in Schedule I beneficially owns or has a right to acquire any Shares or any other equity securities of Todd, and (ii) none of Parent and Purchaser nor, to the knowledge of the Parent and Purchaser, any of the persons or entities referred to in clause (i) above or any of their executive officers, directors or subsidiaries has effected any transaction in the Shares or any other equity securities of Todd during the past 60 days.

Except as set forth elsewhere in this Offer to Purchase, (i) none of Parent and Purchaser nor, to the knowledge of Parent and Purchaser, any of the persons listed on Schedule I, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Todd and (ii) during the two years prior to the date of this Offer to Purchase, there have been no transactions that would require reporting under the rules and regulations of the SEC between Parent and Purchaser nor, to the knowledge of Parent and Purchaser, any of the persons listed in Schedule I, on the one hand, and Todd or any of its executive officers, directors and/or affiliates, on the other hand.

Except as set forth elsewhere in this Offer to Purchase, during the two years prior to the date of this Offer to Purchase, there have been no contracts, negotiations or transactions between Parent and Purchaser nor, to the knowledge of Purchaser, any of the persons or entities listed in Schedule I, on the one hand, and Todd or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets.

We do not believe that Purchaser’s financial condition is relevant to stockholder’s decision whether to tender Shares and accept the Offer because (i) Purchaser was organized solely in connection with the Offer and the Merger and, prior to the Expiration Date, will not carry on any activities other than in connection with the Offer and the Merger, (ii) the Offer is being made for all outstanding Shares solely for cash, (iii) if the Offer is consummated, Purchaser will acquire all remaining Shares in the Merger for the same cash price as was paid in the Offer, and (iv) Purchaser has received debt commitments in the aggregate for sufficient funds to purchase all Shares validly tendered and not properly withdrawn in the Offer and to acquire the remaining outstanding Shares in the Merger.

Available Information. Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on Schedule TO (as amended, the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and its exhibits, as well as other information filed by Purchaser with the SEC, are available for inspection at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information on the public reference room. Copies of this information may be obtainable by mail, upon payment of the SEC’s customary charges, by writing to the SEC at the address above. The SEC also maintains a web site on the Internet at http://www.sec.gov that contains the Schedule TO and its exhibits and other information that Purchaser has filed electronically with the SEC.

9. Source and Amount of Funds.

We estimate that we will need approximately $130 million to purchase all of the issued and outstanding Shares and to cash out all outstanding Todd restricted stock units and stock settled appreciation rights, approximately $12.5 million to pay related fees and expenses, and approximately $29.7 million to repay indebtedness of Parent at the closing of the Merger. We have received a commitment from our lenders to provide us with (i) a senior secured credit facility in an aggregate amount of $145 million, comprised of a $120 million term loan facility and a $25 million revolving credit facility and (ii) mezzanine debt in the form of senior

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subordinated notes in an aggregate amount of $15 million. Subject to certain conditions, the debt financing commitments will be available to us to finance the Offer and the Merger, repay or refinance certain existing indebtedness of Parent, pay related fees and expenses and to provide ongoing working capital and for other general corporate purposes of the surviving corporation. The debt financing commitments are subject to certain conditions. If we do not receive the proceeds of the debt financing commitments, we will not be obligated to purchase Shares in the Offer.

If the Merger Agreement is terminated in the circumstance in which all other conditions have been satisfied and we do not receive the proceeds of the debt financing commitments, we may be obligated to pay Todd a termination fee of $6,500,000.

We believe that the financial condition of Parent, Purchaser and their respective affiliates is not material to a decision by a holder of Shares whether to tender such Shares in the Offer because (i) Purchaser was organized solely in connection with the Offer and the Merger and, prior to the Expiration Date, will not carry on any activities other than in connection with the Offer and the Merger, (ii) the Offer is being made for all outstanding Shares solely for cash, (iii) if Purchaser consummates the Offer, Purchaser will acquire all remaining Shares for the same cash price in the Merger and, (iv) we have received equity and debt commitments in respect of funds sufficient to purchase all Shares tendered pursuant to the Offer.

Debt Financing

We have received (i) a Senior Debt Commitment Letter from GE Capital Markets, Inc. (“GECM”), General Electric Capital Corporation (“GECC”) and KeyBank National Association (“Key Bank” and, together with GECC and KeyBank, the “Senior Lenders”) to provide to Purchaser (which includes for purposes of this Section 9, the surviving corporation in the Merger), subject to the conditions set forth in the Senior Debt Commitment Letter, up to $145 million of Senior Secured Credit Facilities and (ii) a Mezzanine Debt Commitment Letter from Endeavour Structured Equity and Mezzanine Fund I, LP (the “Mezzanine Lender”) to provide to Purchaser, subject to the conditions set forth in the Mezzanine Debt Commitment Letter, $15 million of mezzanine debt through the issuance of senior subordinated notes (the “Mezzanine Debt”). We refer to the Senior Debt Commitment Letter and the Mezzanine Debt Commitment Letter together as the “Commitment Letters” and the Senior Secured Credit Facilities and Mezzanine Debt together as the “Financing”. The amounts to be borrowed under the Commitment Letters will be used for the purposes of financing the Offer and the Merger, refinancing certain existing indebtedness of Parent, paying fees and expenses incurred in connection with the Offer and the Merger and the transactions contemplated thereby and for providing ongoing working capital and for other general corporate purposes of the Purchaser and its subsidiaries.

The commitment of the Senior Lenders and the Mezzanine Lender with respect to the Senior Secured Credit Facilities and Mezzanine Debt each expire upon the earliest to occur of (i) the termination of the Merger Agreement or the closing of the Merger or (ii) 5:00 p.m. Pacific time on March 11, 2011. The documentation governing the Financing has not been finalized, accordingly, the actual terms of the Financing may differ from those described in this document. Each of Parent and Purchaser has agreed to use its reasonable best efforts to arrange the debt financing on the terms and conditions described in the Commitment Letters. However, such Financing may not be considered assured. As of the date hereof, no alternative financing arrangements or alternative financing plans have been made in the event the Financing described in this Offer to Purchase is not available.

Availability of Senior Secured Credit Facilities and Mezzanine Debt

The availability of the Senior Secured Credit Facilities and the Mezzanine Debt is subject, among other things, to consummation of the Merger in accordance with the Merger Agreement (without modifications thereto that are adverse to the lead arrangers or lenders under such facilities without the consent of the commitment parties thereunder), the absence of a material adverse effect on Todd, minimum availability under the revolving

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credit facility, payment of required fees and expenses, confirmation of solvency, certain real estate and equipment appraisals, delivery of material consents, contemporaneous repayment of certain indebtedness, purchase of $2 million in subordinated notes by affiliates of Parent, delivery of certain historical and pro forma financial information, the execution of certain guarantees and, with respect to the Senior Secured Credit Facilities, the creation of security interests and the negotiation, execution and delivery of definitive documentation.

Senior Secured Term and Revolving Credit Facilities

The Senior Secured Credit Facilities will consist of a (i) $120 term loan facility with a term of five years and (ii) a $25 million revolving credit facility (including a letter of credit subfacility) with a term of five years.

Roles. KeyBank has been appointed administrative and collateral agent for the Lenders and GE Corporate Financial Services, Inc. or an affiliate will act as co-administrative agent for the Lenders. KeyBank and GECM will act as co-lead arrangers for the Senior Secured Credit Facilities. GECM will act as the bookrunner for the Senior Secured Credit Facilities and KeyBank will act as the co-bookrunner for the Senior Secured Credit Facilities.

Borrowers. Parent and certain direct or indirect subsidiaries of Parent will act as borrowers under the Senior Secured Credit Facilities. We refer to the borrowers under the Senior Secured Credit Facilities together as the “Borrowers”.

Guarantors. All obligations under the Senior Secured Credit Facilities will be guaranteed by each of the existing and future direct and indirect, domestic subsidiaries of Parent that is not a borrower.

Interest Rate. Loans under the Senior Secured Credit Facilities are expected to bear interest at a rate of LIBOR plus 4.5% or a base rate plus 3.5%.

Prepayments and Amortization. The Borrowers will be permitted to make voluntary prepayments with respect to the Senior Secured Credit Facilities at any time, without premium or penalty (other than LIBOR breakage costs, if applicable). The Borrowers must make mandatory prepayments upon the occurrence of certain events with respect to the Borrowers or their other subsidiaries, subject to certain exceptions, including the sale or disposition of assets, any sales or issuances of debt securities or equity securities, the receipt of insurance proceeds from certain casualty and condemnation events, and, commencing with the receipt of audited financial statements for fiscal year 2011 and annually thereafter, up to 50% of excess cash flow for such fiscal year. The term loans under the Senior Secured Credit Facilities will amortize as follows:

Loan Year 1:	$10,800,000
Loan Year 2:	$10,800,000
Loan Year 3:	$12,000,000
Loan Year 4:	$12,600,000
Loan Year 5:	$9,450,000 (three quarters)
Maturity:	$64,350,000
Total	$120,000,000

Security. The obligations of the Borrowers and the guarantors under the Senior Secured Credit Facilities and under any swap agreements and cash management arrangements entered into with a lender, will be secured (subject to permitted liens and other agreed upon exceptions) on a first-priority basis by perfected liens and security interests in (i) all present and future shares of capital stock of (or other ownership or profit interests in) Parent and each of its existing and future direct and indirect, domestic and first-tier foreign subsidiaries after

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giving effect to the Merger, including Todd (limited, in the case of foreign subsidiaries, to 65% of the capital stock of first-tier foreign subsidiaries) and (ii) all of the present and future property and assets of the Borrowers and the guarantors after giving effect to the Merger, subject to customary exceptions to be agreed upon.

Other Terms. The Senior Secured Facilities will contain customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, sales of assets, mergers and consolidations, prepayments of subordinated indebtedness, liens and dividends and other distributions, and financial covenants measuring maximum total debt to EBITDA, minimum fixed charge coverage and maximum capital expenditures. The Senior Secured Credit Facilities will also include customary events of defaults including a change of control to be defined.

Mezzanine Debt

The Mezzanine Debt will consist of a $15 million term loan with a term of 66 months.

Issuers. Parent and certain direct or indirect subsidiaries of Parent will act as issuers (“Issuers”).

Guarantors. All obligations under the Mezzanine Debt will be guaranteed by each of the existing and future direct and indirect, domestic subsidiaries of Parent that is not an Issuer.

Interest Rate. Notes issued in respect of the Mezzanine Debt are expected to bear interest at a rate of 16.00%, consisting of 13.00% cash interest per annum and payment-in-kind interest of 3.00% per annum accrued quarterly to the principal balance of the Mezzanine Debt. The issuers will have the option one time per year to repay in cash the accrued payment-in-kind interest.

Redemption and Amortization. The Issuers will be permitted to make voluntary redemptions with respect to the Mezzanine Debt at any time following the first anniversary of the Mezzanine Debt, provided, that the redemption price during quarters 5-8 after funding of the Mezzanine Debt will equal 103% of the amount redeemed, the redemption price during quarters 9-12 after funding of the Mezzanine Debt will equal 102% of the amount redeemed, the redemption price during quarters 13-16 after funding of the Mezzanine Debt will equal 101% of the amount redeemed and, thereafter, the redemption price will equal 100% of the amount redeemed. The Issuers must make mandatory redemptions upon the occurrence of certain events with respect to the Issuers or their other subsidiaries, subject to certain exceptions, including maturity, an initial public offering of common stock or other third party equity raise, the issuance of additional indebtedness, a change of control, a sale of substantially all of the Issuers’ assets, or following an acceleration of the Mezzanine Loan following acceleration of the Mezzanine Debt by the Mezzanine Lender following an event of default. The Mezzanine Debt will have no mandatory amortization and the principal amount of the Mezzanine Debt shall be payable at maturity.

Security. The obligations of the Issuers and the guarantors under the Mezzanine Debt will be unsecured.

Other Terms. The Mezzanine Debt will contain customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, sales of assets, mergers and consolidations, prepayments of subordinated indebtedness, anti-layering, liens and dividends and other distributions, and financial covenants set back from the financial covenants contained in the Senior Secured Credit Facilities in an amount to be agreed measuring maximum total debt to EBITDA, minimum fixed charge coverage, and maximum capital expenditures. The Mezzanine Debt will also include customary events of defaults including cross-default to the Senior Secured Credit Facilities.

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10. Background of the Offer; Past Contacts or Negotiations with Todd.

Background of the Offer

The information set forth below regarding Todd was provided by Todd, and none of Parent, Purchaser nor any of its affiliates takes any responsibility for the accuracy or completeness of any information regarding meetings or discussions in which Parent or its affiliates or representatives did not participate.

The following is a description of contacts between representatives of Parent or Purchaser with representatives of Todd that resulted in the execution of the Merger Agreement and the agreements related to the Offer. For a review of Todd’s activities relating to these contacts, please refer to Todd’s Schedule 14D-9 being mailed to stockholders with this Offer to Purchase.

In 2006, Mr. Frank Foti, the President of Parent, and Mr. Welch, the President and Chief Executive Officer of Todd, had a series of conversations in which they considered various structures for combining the two companies, including a merger of Parent with and into a subsidiary of Todd, whereby Mr. Foti, as controlling equity owner of Parent, would receive a combination of cash and Todd registered stock. Mr. Foti and Mr. Welch also discussed the possibility of a “going private” transaction whereby management of Todd and significant stockholders would retain their stock interest in a consolidated company that would include the business of both Todd and Parent and/or its subsidiaries. These discussions did not lead to a transaction for a variety of reasons, including doubt that management and major stockholders of Todd would be willing to own stock in a privately held entity and reluctance by Mr. Foti to be a significant stockholder of a publicly traded company.

On April 28, 2010, Mr. Foti and Mr. Welch met while in Washington D.C. and had a brief discussion regarding the possibility of conducting further discussions relating to combining the two companies. No structure or price was discussed at that meeting.

On May 18, 2010, Mr. Foti called Mr. Welch to follow up on the discussion of April 28. In that conversation, Mr. Foti raised the possibility of Parent acquiring Todd in a cash transaction. Mr. Foti stated that the transaction might be accomplished using a financial partner. Mr. Foti asked Mr. Welch whether Todd was in a position to respond to an offer, and Mr. Welch said that Todd was in such a position. Mr. Welch reported this conversation to the other members of the Executive Committee.

On May 20 and May 21, 2010, Mr. Foti and Mr. Welch spoke by telephone, discussing Todd’s near term financial prospects and Parent’s access to the capital necessary to finance the acquisition of Todd’s stock. Mr. Welch and Mr. Foti discussed the “next steps” that would need to be taken in order to move forward with a possible transaction. Mr. Welch stated that he had been keeping Todd’s Executive Committee informed, and would be getting back to Mr. Foti with suggestions as to how to proceed.

On June 4, 2010, representatives of Parent met with representatives of Todd. In attendance on behalf of Parent were Mr. Foti, Mr. Joe O’Rourke (Senior Vice President for Business Development), and Mr. Bruce Dummer (Senior Vice President, Finance) and, on behalf of Todd, Mr. Welch and Mr. Joseph Lehrer, a member of Todd’s Board of Directors. At the meeting, the parties discussed the structure of a possible transaction, the method by which Parent would finance the transaction, the necessary steps in acquiring a publicly traded corporation, the particular areas of emphasis for due diligence and the method of valuing Todd. The parties

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discussed various approaches to valuing Todd, but no price was proposed by either party. At the meeting, it was determined that the parties would sign confidentiality agreements (the “Confidentiality Agreements”) that would provide for a confidential exchange of information between the parties and provide for the non-disclosure of discussions concerning a possible transaction.

Thereafter, drafts of Confidentiality Agreements were exchanged between attorneys at Greensfelder, Hemker & Gale, P.C. (“Greensfelder”) representing Todd, and attorneys at K&L Gates LLP (“K&L Gates”), representing Parent. On June 11, 2010 a telephone conversation was held among Mr. Foti, Mr. Lehrer and attorneys from K&L Gates regarding the Confidentiality Agreements and the method of exchanging information. The Confidentiality Agreements were executed on June 8, 2010 and June 13, 2010.

On June 13, 2010, Mr. Welch met with Mr. Foti and Parent’s Chief Operating Officer, Mr. David Whitcomb. At the meeting, the parties discussed the manner in which Parent and Todd would potentially operate on a combined basis, and the particular role for Mr. Welch in the combined operations. No conclusions were reached as a result of the discussion.

Pursuant to Mr. Foti’s requests, Mr. Welch sent financial projections for the next four years to Mr. Foti on June 15, 2010, which Mr. Foti planned on using in discussing financing alternatives with possible lenders and investors. Mr. Welch had continuing telephone discussions with Mr. Foti regarding the projections and the method of operating and managing the possible combined companies from June 15 through the end of July.

From June 13, 2010 through July 6, 2010, representatives of the Parent held various meetings with potential equity and debt providers who the Parent felt might finance the acquisition of Todd.

On July 6, 2010, Mr. Lehrer and Mr. Foti had a telephone conversation during which Mr. Lehrer inquired as to Mr. Foti’s progress in determining a possible offer price for Todd and how Mr. Foti was progressing on financing. Mr. Foti stated that he was discussing senior debt with various parties, and he was also having discussions with various parties regarding possible mezzanine or private equity financing. Thereafter, Mr. Lehrer provided certain potential lenders with confidentiality agreements, allowing them to receive non-public information concerning Todd.

On July 8, 2010, the Parent Board had its regularly scheduled Board meeting. At this meeting, the Board discussed the purchase price Parent would consider paying for Todd and the various equity and debt financing alternatives to finance the acquisition of Todd.

On July 26, 2010, K&L Gates attorneys had a conversation with Mr. Lehrer in which they discussed possible transaction structures, including a possible tender offer/merger approach. Mr. Lehrer stated that the discussion was premature because the parties had not yet agreed on the value of the transaction.

On July 28, 2010, Mr. Lehrer and Mr. Foti had a telephone conversation regarding the necessity of achieving a mutually acceptable formal proposal regarding the possible transaction. Mr. Foti told Mr. Lehrer that Parent would deliver a proposed term sheet to Todd for a scheduled conference call on August 2, 2010.

On August 2, 1010, Parent sent a proposed term sheet to Mr. Lehrer and Mr. Hodgson, which was followed by a telephone conference among Mr. Foti, Mr. Dummer, and K&L Gates, on behalf of Parent, and Mr. Hodgson and Mr. Lehrer, on behalf of Todd. The proposed term sheet contemplated a total purchase price of between $105 and $115 million, which equated to between $18.02 and $19.21 per share. Mr. Hodgson stated that such purchase price was unacceptable and that Todd was not sure it wanted to respond to the offer. Mr. Foti stated his belief that his proposal was a fair price.

On August 6, 2010 Mr. Foti called Mr. Lehrer to discuss some of the financial assumptions used by Parent to determine its price, and on August 7, 2010 Mr. Foti and Mr. Lehrer discussed financial projections regarding Todd’s operations.

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On August 13, 2010, Mr. Foti and Mr. Lehrer discussed by telephone whether the gap in the purchase price negotiations could be closed. Mr. Foti stated that Parent’s top price was $118 million based on Todd’s March 31, 2010 financial statements. During the conversation, Mr. Lehrer pointed out that Todd was generating additional working capital over the amount shown on its March 31, 2010 financial statements. Mr. Foti stated that if it could be demonstrated that Todd’s working capital would increase by at least $12 million by a presumed closing of November 30, 2010, then Parent would be willing to increase the purchase price to $130 million. Mr. Foti confirmed this proposal to Mr. Lehrer in an e-mail on the same day. After a discussion with Mr. Welch and Mr. Hodgson, Mr. Lehrer sent Mr. Foti projections of the Todd’s working capital projections for the remainder of the year, which projected that Todd’s net working capital would be at least $12 million higher as of November 30, 2010 than at March 31, 2010.

On August 16, 2010, Mr. Foti sent an e-mail to Mr. Lehrer in which he specified that working capital projections of Todd should be presented net of contemplated transaction expenses and inquired about projections for results for the full 2011 fiscal year. Representatives of management of Todd held discussions with representatives of Parent later that day to provide more information about projections for the full 2011 fiscal year.

On August 19, 2010, Mr. Lehrer sent Brendan McDonnell of K&L Gates LLP a revised term sheet, and, in a telephone conversation and further e-mail correspondence, expressed that Todd was likely unwilling to accept less than $130 million for all of the equity of Todd.

Also on August 19, 2010, a meeting was held at the Seattle office of K&L Gates among Mr. Foti, K&L Gates attorneys, Mr. Hodgson and Mr. Lehrer. During that meeting, there was a discussion of Mr. Welch’s obligation to remain with Todd after the closing of the contemplated transaction. It was pointed out that Mr. Welch’s Employment Agreement contemplated a six month transition period after the closing of a change of control transaction. Parent also expressed concerns about the working capital projections provided by Todd, including a possible deterioration in the end of year working capital numbers and the projected amount of cash on hand at Todd at the presumed November 30, 2010 closing date.

On August 20, 2010, Todd held its regular annual meeting of stockholders and a regularly scheduled meeting of the Todd Board. At its meeting, the Todd Board discussed the status of the negotiations between Parent and Todd. After the meeting, Mr. Lehrer informed Mr. Foti that Todd’s Board instructed Mr. Lehrer to communicate to Mr. Foti that Todd had determined to terminate the discussions concerning the Transaction because of concerns that the term sheet had not yet been signed and concerns that Parent could not raise the necessary financing

That evening, Mr. Lehrer called Mr. Foti and informed him of the Todd Board’s decision. Mr. Foti expressed disappointment with the Todd Board’s decision, and stated that Parent believed it could make the financing available and was willing to go forward with the negotiated purchase price of $130 million so long as Parent’s questions regarding Todd performance and projections were adequately addressed by Todd. Mr. Lehrer relayed his discussion with Mr. Foti to the Todd Board. On August 24, 2010, the Todd Board decided to continue negotiations with Parent so long as (i) Todd received assurances from Parent’s lenders that they were likely to proceed with the financing based on their knowledge of Parent and Todd (through the Todd’s public filings) and (ii) Todd and Parent reached a mutually acceptable term sheet by the end of August. Mr. Lehrer and Mr. Foti then had a discussion where it was decided that Parent would perform more financial due diligence and Mr. Lehrer would speak to Parent’s potential lenders to determine whether the financing of the transaction was feasible.

Mr. Lehrer held separate discussions with the potential senior lenders on August 26, 2010, in which representatives of these lenders described their plans regarding the due diligence for the financing. Each of the lenders expressed the view that Todd’s contingent liabilities, particularly for environmental claims and asbestos claims, would not necessarily prevent the financing from occurring. Mr. Lehrer reported these conversations to the Todd Board.

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Also on August 26, 2010, Mr. Welch and Mr. Berger Dodge, Todd’s Chief Financial Officer, had discussions with Mr. Dummer regarding a number of financial issues raised by Parent and they supplied Parent with additional financial information and business information. Between August 28 and August 31, 2010, Greensfelder, representing Todd and K&L Gates, representing Parent, negotiated the provisions of a term sheet, but were unable to reach agreement on the amount of a fee to be paid by Parent to Todd if Parent were to be unwilling or unable to close the transaction although all conditions were satisfied or if Parent were to be unable to obtain the necessary financing (a “reverse termination fee”). The parties also were not in agreement concerning requirements imposed by Parent that Todd have minimum levels of cash or working capital at the closing.

On August 30, 2010, the Todd Board decided to continue negotiations with Parent even though a term sheet had not been agreed upon. Also on that date, the Todd Board established a Transaction Committee, consisting of directors Hodgson, Baird, Reason and Clifford. The role of the Transaction Committee was broadly defined to include negotiating all terms of a potential transaction with Parent or other third parties.

During the first week of September 2010, representatives of Todd provided Parent with more detailed financial due diligence. Parent representatives indicated that before they incurred additional transaction expenses or allowed their potential lenders to perform more due diligence, they wanted to review the new financial due diligence in detail and finalize Parent’s proposal.

During the first two weeks of September 2010, Greensfelder and K&L Gates continued to negotiate the terms of a proposal, but were unable to reach agreement on the amount of a reverse termination fee or requirements that Todd have a minimum level cash or working capital at the closing.

On September 13, 2010, K&L Gates presented a formal proposal that did not contain any condition that Todd would have a minimum level of cash or working capital, however the proposal did not specify the amount of any reverse termination fee. Later that day, Mr. Foti and Mr. Hodgson discussed the amount of the reverse termination fee.

The Transaction Committee held a meeting on September 15, 2010. At this meeting, the Transaction Committee also approved the proposal as presented, with a purchase price of $130 million. The proposal also contained a summary of certain key provisions that the Parties proposed to be in any definitive merger agreement, including:

• the transaction would be effected through a tender-offer followed by a “short form” merger, or, in certain cases, only a “long form” merger;

• a “go-shop” period during which Todd would be permitted to solicit alternative transaction proposals after the signing of the definitive merger agreement;

• Todd would have certain rights to terminate the agreement or change its recommendation to stockholders if required by the Todd Board’s fiduciary duties, including if a superior offer were made and accepted, whether during the go shop period or after. In such a case, Todd would be obligated to pay a termination fee to Parent equal to 3.5% of the aggregate purchase price (approximately $4,550,000); and

• Parent would be granted an option to purchase a number of newly issued Shares, not exceeding the amount of authorized, unissued Shares. The purpose of the option is to permit Parent, upon the closing of the Offer to hold at least 90% of the Shares outstanding immediately after the issuance of the Shares pursuant to the option, so that the merger can be effected through a “short-form” merger procedure pursuant to Section 253 of the DGCL.

Although the proposal, as presented to the Transaction Committee, did not specify the amount of a reverse termination fee, Mr. Hodgson informed the committee that he believed Parent would agree to pay a reverse termination fee of 5% of the total purchase price. Mr. Hodgson stated his view that this was an acceptable amount of the reverse termination fee. The Transaction Committee authorized Mr. Hodgson to respond to the proposal by specifying a 5% reverse termination fee.

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Later that day, Mr. Foti and Mr. Hodgson executed a non-binding term sheet setting forth the terms of the proposal as approved by the Transaction Committee. The proposal was not binding on the parties and constituted only an expression of interest, except for certain agreements by which Todd agreed to negotiate exclusively with Parent for a period of 60 days following the date of the proposal.

On September 16, 2010, Parent submitted an initial due diligence request to Todd and Greensfelder. Todd and representatives of Greensfelder began preparing due diligence submissions in response to this request. Commencing on or around September 23, 2010, Todd advised Parent, its advisers and certain of the lenders that a password-protected online data room that contained various legal and financial due diligence materials was available for representatives of Parent and its advisors to access. Throughout the process leading to the execution of the Merger Agreement, the data room was updated with new information, including specific information requested by Parent and its advisors.

Between September 16, 2010 and September 24, 2010, representatives of Todd and Greensfelder, on the one hand, and Parent and K&L Gates, on the other hand, had a number of conversations to discuss the due diligence process that would be followed in the next few weeks and the mutual desire to quickly complete the due diligence and work through any other key issues in the proposed transaction through a negotiation of the merger agreement terms. For the remainder of September and through the month of October, Parent continued its due diligence review of Todd, including meetings with key members of Todd’s management team.

On October 8, 2010, Greensfelder attorneys met with an attorney from K&L Gates at the St. Louis airport to discuss details of the tender offer structure followed by a short form merger. In particular, the parties’ attorneys discussed that the merger agreement should contemplate the possibility, in certain circumstances, of consummating the merger even if the tender offer was not consummated. The tender offer would have a minimum tender condition of approximately 67% of the Shares, which would allow Parent to immediately conduct a short form merger under Delaware law. In addition, after commencement of the tender offer, Todd would promptly file a proxy statement for a single-step merger to prevent delay of the transaction if there were not enough Shares tendered in the tender offer to permit a short-form merger.

On October 12, 2010, Greensfelder attorneys relayed the proposed tender offer/merger structure to the Transaction Committee.

On October 21, 2010, K&L Gates presented to Greensfelder and Todd a draft of a merger agreement reflecting discussions between the parties and their respective counsel to date. On October 22, 2010 and October 23, 2010 representatives of K&L Gates and Greensfelder had a number of conversations by telephone concerning issues in Parent’s proposed draft of the merger agreement, including a proposed requirement that Todd have a minimum amount of cash on hand at the closing, which Greensfelder believed would be unacceptable to the Transaction Committee based on prior conversations with the Transaction Committee. Also, on October 22, 2010, K&L Gates informed Greensfelder that Parent’s mezzanine lender would require additional financial due diligence which had not previously been discussed. Greensfelder and Todd’s management held a number of conversations with Parent concerning this additional financial due diligence.

On October 23, 2010, Greensfelder provided an initial assessment of Parent’s draft of the Merger Agreement and relayed the requirement for additional financial due diligence to the Transaction Committee. Between October 23, 2010 and October 26, 2010 Greensfelder, in consultation with Mr. Hodgson, continued to discuss with K&L Gates that the Transaction Committee would not agree to any requirement that Todd have a minimum amount of cash or working capital on hand at the closing.

On October 27, 2010, the Transaction Committee held a telephonic meeting. At this meeting, the Transaction Committee (i) discussed the draft of the Merger Agreement proposed by Parent and authorized Mr. Hodgson and Greensfelder to continue negotiating the Merger Agreement, consistent with the provisions of

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the Term Sheet, (ii) approved the retention of Houlihan Lokey as financial adviser, solely for the purpose of providing an opinion as to whether the consideration to be received by the holders of Shares in the Offer and the Merger was fair to the stockholders from a financial point of view and (iii) approved the terms of Greensfelder’s engagement to serve as transaction counsel. The Transaction Committee specifically discussed Parent’s proposed condition that Todd have a minimum amount of cash on hand at closing and determined that such a condition was not acceptable.

On October 27, 2010, representatives of Greensfelder and K&L Gates held a telephone conference to discuss a number of issues presented in Parent’s proposed draft of the Merger Agreement, including (i) the permissibility of dividends which might be paid after the signing of the Merger Agreement, (ii) rights of the parties to terminate the Merger Agreement, (iii) the definition of a “Superior Proposal,” (iv) events triggering the payment of any termination fee or reverse termination fee, (v) the restrictions and conditions on the Top-Up, (vi) conditions to closing and (vii) a request by Parent to adjust the offer price paid to stockholders of Todd to reflect performance equity compensation in Todd’s Everett Shipyard subsidiary. Greensfelder relayed these discussions to Mr. Hodgson.

On November 1, 2010, Greensfelder provided a response draft of the merger agreement to K&L Gates. On November 4, 2010, representatives of Greensfelder and K&L Gates held a telephone conference to discuss the draft of the Merger Agreement. A number of legal issues were resolved, however the parties still had not agreed on any of the significant issues discussed on October 28. Greensfelder relayed the results of this discussion to Mr. Hodgson.

On November 6, 2010, K&L Gates sent a revised draft of the Merger Agreement to Todd and Greensfelder. While the parties had not reached agreement on the significant issues described above, the revised draft included changes which resolved other legal issues.

The Transaction Committee held a telephonic meeting on November 10, 2010 to discuss possible resolutions to the outstanding issues on the Merger Agreement. However, the Transaction Committee rejected any adjustment to the offer price payable to Todd’s stockholders or restrictions on Todd’s right to declare and pay dividends after the signing of any merger agreement.

As instructed by the Transaction Committee, Mr. Lehrer relayed the committee’s proposals to Parent in a telephone discussion with Mr. Foti and K&L Gates on November 11, 2010. On November 12, 2010, Mr. Hodgson and Mr. Foti executed an exclusivity letter which extended the Parent’s rights to exclusive negotiations until November 30, 2010. Also on that day, Greensfelder sent to K&L Gates and Parent a draft of the merger agreement reflecting the Transaction Committee’s instructions.

On November 13, 2010, representatives of K&L Gates and Greensfelder held a conference call to discuss the outstanding business issues in the exchanged drafts of the Merger Agreement, the status of Parent’s financing efforts and the timeline of the transaction. This conference call was held in preparation for the special meeting of the Todd Board scheduled for November 17, 2010. The representatives for the law firms noted that there had been no compromises by either party on the issue of Todd’s right to make payments of dividends after the signing of any merger agreement or whether there would be any adjustment to the aggregate offer price payable to the stockholders to account for performance equity awards to an executive of Todd’s Everett Shipyards subsidiary. The attorneys also discussed other issues that remained open, including certain of the representations and warranties, covenants related to the conduct of Todd’s business prior to the closing, the go-shop period, termination fees and other matters.

During this call, K&L Gates informed Greensfelder that Parent had received verbal approvals from the loan committees of each of its lenders, but had not yet received proposed forms of credit agreements or commitment letters from the lenders. The attorneys also discussed the filing and mailing requirements to commence the tender offer. The attorneys concluded that it was unlikely that a definitive merger agreement would be ready for approval by the Todd Board at the special meeting planned for November 17, 2010.

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Greensfelder relayed this discussion to Mr. Hodgson and the Transaction Committee. The Transaction Committee decided to advise the Todd Board to convene the special meeting on November 17 as planned. Even if a definitive draft of the Merger Agreement would not be available for review and approval, the special meeting would provide an important opportunity to update the full Todd Board on the status of negotiations, the projected timeline, open issues between the parties and to hear presentations by representatives of Greensfelder and Houlihan Lokey regarding the proposed transaction.

On November 15 and 16, 2010 Greensfelder and K&L Gates held a number of conference calls to resolve as many of the legal issues as possible in the draft of the Merger Agreement. K&L Gates delivered a new draft of the Merger Agreement to Greensfelder and Todd in the early morning of November 16, 2010, which resolved some but not all of the disagreements between the parties.

On November 17, 2010, the Todd Board held a special meeting at its headquarters. All members of the Todd Board attended in person, as well as representatives of Greensfelder and Houlihan Lokey as invited guests. Prior to the meeting, the members of the Todd Board were provided with materials related to the proposed transaction. At the meeting:

• representatives of Greensfelder reviewed with the Todd Board its fiduciary duties in considering the proposed transaction;

• Greensfelder made a presentation concerning the terms of the Merger Agreement and the acquisition process, and described the remaining items of disagreement between the Transaction Committee and Parent;

• the Todd Board considered the positive and negative factors and risks in connection with the proposed transaction, as discussed in the section entitled “— Reasons for Recommendation” in the Schedule 14D-9; and

• representatives of Houlihan Lokey reviewed with the Transaction Committee and the Todd Board their financial analysis to date relating to the fairness, from a financial point of view, of the consideration to be received by the holders of Company Common Stock (other than Parent, Purchaser and their respective affiliates) in the Offer and the Merger.

Following an extensive discussion, the Todd Board (i) confirmed its support of the Transaction Committee’s negotiations, specifically, that there should be no reduction to the offer price payable to Todd’s stockholders and (ii) instructed the Transaction Committee to continue negotiations with Parent.

Later that afternoon and evening, representatives of Greensfelder and K&L Gates met at the Seattle office of K&L Gates to resolve legal issues in the draft of the merger agreement, including representations and warranties, covenants of the parties, triggers for the termination fee, the deadline or “outside date” for closing any transaction and Parent’s right to extend the expiration of the offer period if the financing condition were not satisfied. Greensfelder attorneys also relayed to K&L Gates the deliberations of the Todd Board.

Between November 17, 2010 and November 23, 2010, Todd and Greensfelder worked on revisions to the draft merger agreement and the disclosure schedules. On November 23, 2010, Greensfelder delivered to K&L Gates and Parent a proposed revised draft of the merger agreement.

On November 30, 2010, representatives of Parent and Todd executed and delivered a letter agreement extending the period of exclusive negotiations through December 15, 2010.

Between December 1, 2010 and December 9, 2010, representatives of Greensfelder and K&L Gates held several discussions concerning the status of the transaction and exchanged drafts of the Merger Agreement. The attorneys also discussed the remaining open negotiation topics between the parties, which were (i) whether Todd would be obligated to pay a termination fee if the merger agreement were to be terminated by Parent as a result of a breach of a representation, warranty or covenant of Todd, (ii) the outside date for consummation of the Offer

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and the Merger and (iii) the price adjustments requested by Parent. On December 2, 2010, K&L Gates circulated a draft which reflected Parent’s agreement that there would be no adjustment to the merger consideration paid to Todd’s stockholders, provided that Todd would set the record date for its typical March dividend after the anticipated outside date for the Merger. During this period, there was no resolution of the other open issues. Mr. Hodgson had several conversations with representatives of Greensfelder during this period.

On December 10, 2010, representatives of Greensfelder, in consultation with Mr. Hodgson, and K&L Gates, in consultation with Mr. Foti, held several discussions to resolve all open issues and prepare for execution of the Merger Agreement. During these discussions, the parties agreed to an outside date of March 18, 2011, agreed on the specific covenants of Todd, a breach of which would trigger a termination fee payable to Parent and resolved all other substantive issues.

On December 13, 2010, the Transaction Committee held a joint special meeting with the Todd Board, with representatives of Greensfelder in attendance. Representatives of Houlihan Lokey also attended for portions of the meeting. The purpose of the meeting was to consider the recommendation of the proposed transaction to the Todd Board and action by the Todd Board to approve the transaction. During the course of the meeting the Transaction Committee and Company Board discussed recent increases in Todd’s stock price, including significant increases during the day. The Todd Board and the Transaction Committee noted that an analyst report that morning had made positive predictions concerning Todd’s stock based on Todd’s most recent quarterly report and public announcements concerning new contracts. There was no indication that the price increases were based on information about the proposed transaction. The Transaction Committee and the Todd Board discussed that the Offer Price was now a much smaller premium over the current market price, however there was agreement that the proposed transaction with Parent remained in the best interest of Todd’s stockholders given that the challenges of finding alternative buyers had not diminished and Todd’s future performance remained subject to unpredictable patterns of U.S. Navy and state ferry authority purchasing decisions.

At this meeting, representatives of Houlihan Lokey reviewed with the Transaction Committee and the Todd Board Houlihan Lokey’s financial analysis to date relating to the fairness, from a financial point of view, of the consideration to be received by the holders of Company Common Stock (other than Parent, Purchaser and their respective affiliates) in the Offer and the Merger. Representatives of Greensfelder discussed the provisions of the final Merger Agreement, including changes made since the last meeting of the Todd Board on November 17, 2010.

Also during this meeting, Todd and Greensfelder received an e-mail notice from Parent that commitments from its lenders would not be available for several more days. The Transaction Committee determined that no action would be taken with respect to the proposed transaction at the meeting. The Transaction Committee adjourned its meeting until December 15, 2010, the last day of the then current exclusive negotiating period. Between December 13, 2010 and December 15, 2010, Parent and Todd and their respective attorneys had several conversations concerning the status of Parent’s financing.

The Transaction Committee and Todd Board reconvened the adjourned joint meeting on December 15, 2010. It was apparent that Parent would not have financing available by the end of the exclusivity period which expired at the end of that day. During its discussion, the Transaction Committee and the Todd Board noted that the Offer Price was then a premium of only approximately 11% over the current market price of Todd Common Stock. The directors generally discussed that the current price of Todd Common Stock was not indicative of all of the risks Todd faced and the unpredictable nature of its revenue. The directors noted that that Todd’s stock price was subject to volatile swings whenever its business prospects improved or deteriorated significantly, but that consistent increases in its stock price were seldom sustained for long periods. The directors noted that it would be more difficult to obtain stockholder participation in the tender offer due to the increase in Todd’s stock price, but unanimously determined to proceed with the negotiations with Parent concerning a potential transaction. The Transaction Committee therefore determined to continue negotiations with Parent for an Offer Price of $22.27 per Share on the following terms: (i) there would be no extension of the exclusive negotiating

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period, (ii) Parent would have to provide copies of firm commitment letters to the Transaction Committee and sign a definitive agreement not later than December 23, 2010, (iii) the approximately one month “go shop” period following execution of a definitive agreement would be subject to extension by Todd for up to two weeks so that the Todd Board would be able to adequately exercise its rights to seek superior proposals if the end of the year holidays interfered with their efforts and (iv) a breach of Todd’s representations and warranties in the Merger Agreement would not trigger any termination fee payable to Parent.

Later in the day of December 15, 2010, Mr. Hodgson and Mr. Foti discussed the positions of the Todd Board and Transaction Committee in a telephone conference with representatives of their respective counsel in attendance. During this conversation, Parent agreed to continue negotiations on these terms and indicated that significant progress had been made with its financing. The parties’ attorneys began working on revisions to the definitive agreement, disclosure schedules and other ancillary documents.

On December 16, 2010, attorneys from Greensfelder and attorneys from K&L Gates held a conference call to discuss the remaining few changes to the Merger Agreement as agreed by Parent and Todd. On December 17, 2010, Greensfelder distributed revised versions of the Merger Agreement and related Schedules to attorneys from K&L Gates.

Over the weekend of December 18 and 19, 2010 Parent continued to work with the Senior and Mezzanine Lenders to finalize the terms of their commitment letters to Parent. On December 19, 2010, attorneys from Greensfelder and attorneys from K&L Gates held a conference call to finalize the Merger Agreement and Schedules. Later that same day, attorneys from Greensfelder distributed drafts of the final Merger Agreement and Schedules to attorneys from K&L Gates.

On December 20, 2010, Parent and attorneys from K&L Gates worked with the Senior and Mezzanine Lenders and their counsel to finalize the Senior Commitment Letter and the Mezzanine Commitment Letter.

By unanimous written consent of the managers and members of Parent dated effective December 21, 2010, the managers and members of Parent unanimously approved the Merger Agreement, the Offer, the Merger, and the debt financing contemplated by the Senior Debt Commitment Letter and the Mezzanine Debt Commitment Letter. By unanimous written consent of the board and sole stockholder of Purchaser, also dated effective December 21 2010, the Purchaser’s board and Parent, as its sole stockholder, approved the Merger Agreement, the Offer, and the Merger.

On the morning of December 21, 2010, the Senior Commitment Letter and Mezzanine Commitment Letter were executed and delivered by the parties to such commitments and Parent delivered to Todd copies of signed commitment letters. Later that day, the Compensation Committee of the Todd Board (the “Compensation Committee”), the Transaction Committee and the Todd Board held a joint special meeting to consider and act on matters in connection with the proposed transaction. Representatives of Greensfelder were in attendance during the non-executive portion of the meeting. Representatives of Houlihan Lokey attended for portions of the meeting as well.

At this joint meeting, the Compensation Committee unanimously approved (i) the cancellation of outstanding equity awards at the effective time of the Merger in exchange for the consideration to be paid to holders of such equity awards in accordance with the terms of the Merger Agreement, (ii) the change of control payments contemplated by the Executive Incentive Plan and (iii) the Transition Agreements with Mssrs. Dodge and Marsh.

Also at this joint meeting, representatives of Houlihan Lokey reviewed with the Transaction Committee and the Todd Board their financial analysis to date relating to the fairness, from a financial point of view, of the consideration to be received by the holders of Company Common Stock (other than Parent, Purchaser and their respective affiliates) in the Offer and the Merger and rendered an oral opinion to the Transaction Committee and

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the Todd Board (which was confirmed in writing by delivery of Houlihan Lokey’s written opinion, dated December 21, 2010) to the effect that, as of December 21, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the consideration to be received by the holders of Shares (other than Parent, Purchaser and their respective affiliates) in the Offer and the Merger was fair, from a financial point of view, to such holders (other than Parent, Purchaser and their respective affiliates).

Representatives of Greensfelder discussed the provisions of the final Merger Agreement, including changes made since the meeting of the Todd Board on December 13, 2010. The Todd Board also noted the approval of the proposed transaction by the Transaction Committee and the Transaction Committee’s recommendation regarding the proposed transaction.

The Todd Board and the Transaction Committee again discussed the recent increases in the market price of Todd’s stock and noted that the premium of the Offer Price over the market price of Todd’s stock had continued to decline. The directors reviewed their prior discussions of the benefits and costs of the Merger Agreement, the Offer, the Merger and the other transactions proposed by the Merger Agreement.

At this joint meeting, the Transaction Committee unanimously voted to recommend that the Todd Board (i) approve and declare advisable the Merger Agreement and the transactions contemplated thereby, (ii) declare that it is in the best interests of Todd and its stockholders (other than Parent and its subsidiaries) that Todd enter into the Merger Agreement and consummate the transactions contemplated thereby and that the stockholders of Todd tender their Shares pursuant to the Offer, in each case on the terms and subject to the conditions of the Merger Agreement, (iii) declare that the terms of the Offer and the Merger are fair to Todd and Todd’s stockholders (other than Parent and its subsidiaries), and (iv) recommend that the stockholders of Todd accept the Offer, tender their Shares pursuant to the Offer, and if required by the DGCL or other applicable law, adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, and (iv) approve all such other actions as are necessary or convenient for the consummation of the Transaction.

Following a detailed discussion of these matters and careful consideration of the proposed Merger Agreement and the Offer and the Merger, the Todd Board, by a unanimous vote of the disinterested directors, (i) authorized and approved the execution, delivery and performance of the Merger Agreement and the transactions contemplated by the Merger Agreement, (ii) approved and declared advisable the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, (iii) declared that the terms of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, the Offer and the other transactions contemplated by the Merger Agreement, on the terms and subject to the conditions set forth therein, are fair to and in the best interests of the stockholders of Todd, (iv) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of the stockholders of Todd, unless the adoption of the Merger Agreement by Todd’s stockholders is not required by applicable law, (v) recommended that the stockholders of Todd accept the Offer and tender their Shares pursuant to the Offer and, if required by applicable law, adopt and approve the Merger Agreement and the transactions contemplated thereby and (vi) approved for all purposes Purchaser, Parent and their affiliates, the Merger Agreement and the transactions contemplated by the Merger Agreement to exempt such persons, agreements and transactions from any anti-takeover laws.

On December 22, 2010, the parties executed the Merger Agreement and the appropriate parties executed and delivered the Stockholder Tender Agreement. On December 23, 2010, before the opening of trading on NYSE, Todd and Parent issued a joint press release announcing the execution of the Merger Agreement.

Todd intends to promptly commence contacting third parties to determine whether they might be interested in pursuing a transaction that may lead to an alternative proposal, however, there can be no assurance that such efforts will result in an alternative transaction being proposed or in a definitive agreement for such a transaction being entered into. Todd does not intend to announce further developments with respect to the solicitation process until the Todd Board has made a decision regarding an alternative proposal, if any.

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Past Contacts, Transactions, Negotiations and Agreements

For information on the Merger Agreement and the other agreements between Todd and Purchaser and their respective related parties, see Section 1 — “The Merger Agreement, Other Agreements,” Section 8 — “Certain Information Concerning Parent and Purchaser,” and Section 9 — “Source and Amount of Funds,” and Section 11 — “The Merger Agreement; Other Agreements.”

11. The Merger Agreement; Other Agreements.

The Merger Agreement

The following is a summary of certain provisions of the Merger Agreement. This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit (d)(1) to the Schedule TO, which is incorporated in this Offer to Purchase by reference. Copies of the Merger Agreement and the Schedule TO, and any other filings that we make with the SEC with respect to the Offer or the Merger, may be obtained in the manner described in Section 8 — “Certain Information Concerning Parent and Purchaser.” Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below.

The Merger Agreement has been provided solely to inform investors of its terms. The representations, warranties and covenants contained in the Merger Agreement were made only for the purposes of such agreement and as of specific dates, were made solely for the benefit of the parties to the Merger Agreement and may be intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Merger Agreement and may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, Todd. Todd’s stockholders and other investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of Todd, Parent, Purchaser or any of their respective subsidiaries or affiliates.

The Offer

The Merger Agreement provides that Purchaser will commence the Offer as promptly as commercially reasonable after the date of the Merger Agreement, and that, subject to the satisfaction of the Minimum Tender Condition and the other conditions that are described in Section 15 — “Conditions of the Offer,” Parent will cause Purchaser to accept for payment, and Purchaser will accept for payment, all Shares validly tendered and not withdrawn promptly following the applicable expiration date of the Offer. The initial expiration date of the Offer will be midnight, New York City time, on January 28, 2011.

Terms and Conditions of the Offer. The obligations of Purchaser to accept for payment, and pay for, any Shares tendered pursuant to the Offer are subject to the conditions described in Section 15— “Conditions of the Offer.” The Offer conditions are for the sole benefit of Parent and Purchaser, and Parent and Purchaser may waive, in whole or in part, any Offer condition at any time and from time to time, in their sole discretion, other than the Minimum Tender Condition or the Competition Law Condition, which may be waived by Parent and Purchaser only with the prior written consent of Todd. Parent and Purchaser expressly reserve the right to increase the Offer Price or to waive or make any other changes in the terms and conditions of the Offer; provided, however, that unless otherwise expressly provided in the Merger Agreement or previously approved by Todd in writing, Purchaser will not (i) reduce the number of Shares sought to be purchased in the Offer, (ii) reduce the Offer Price, (iii) change, modify or waive the Minimum Tender Condition or the Competition Law Condition, (iv) add to the Offer conditions or amend, modify or supplement any Offer condition in a manner adverse in any material respect to any holder of Company Common stock, (vi) extend the expiration date of the Offer in any manner other than as provided in the Merger Agreement, or (v) otherwise amend, modify or supplement any of the terms of the Offer in a manner adverse in any material respect to any holder of Company Common Stock.

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Extensions of the Offer. Pursuant to the Merger Agreement, the Offer may be extended beyond the Original Expiration Date in the following circumstances:

• if Todd delivers written notice to Parent at least four business days prior to the Original Expiration Date that it elects to extend the No-Shop Period Start Date (as defined on page 44) for up to 14 days, the Offer will be extended beyond the Original Expiration Date for an equal period of time;

• if, at the Original Expiration Date, or the extended expiration date if Todd has exercised the extension described the first bullet above, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent will extend the Offer for up to ten business days (the number of days to be mutually agreed by Parent and Todd) and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days;

• if, after the application of the extension provisions in the first two bullets, at any then scheduled expiration date, (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent must extend the Offer in consecutive increments of up to five business days (or such longer period as Parent and Todd agree) provided that if the Proxy Statement Clearance Date (as defined below) has occurred on or prior to February 11, 2011, then no such extension is required, but at Parent’s or Todd’s election, the Offer will be extended in increments of up to five business days (or such longer period as Parent and Todd agree) each until the Proxy Statement Clearance Date, and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days, but only to the extent Parent has not exercised a similar extension right described in the second bullet above; and

• Parent must extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or NYSE applicable to the Offer, but is not required to extend the offer under this provision beyond February 11, 2011.

Recommendation

Todd has represented in the Merger Agreement that the Todd Board has, by a unanimous vote of the disinterested directors, at a meeting duly called and held, at which a quorum was present, duly adopted resolutions (i) approving and declaring the advisability of the Merger Agreement and the transactions contemplated thereby, (ii) declaring that it is in the best interests of Todd and Company’s stockholders that Todd enter into the Merger Agreement and consummate the transactions contemplated by the Merger Agreement and that Todd’s stockholders tender their Shares pursuant to the Offer, (iii) declaring that the terms of the Offer and the Merger are fair to Todd and Todd’s stockholders, (iv) recommending that Todd’s stockholders accept the Offer, tender their Shares pursuant to the Offer, and, if required by applicable law, adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, and (v) irrevocably approving for all purposes, Parent, Merger Sub and their respective affiliates, the Merger Agreement and the transactions contemplated by the Merger Agreement to exempt such persons, agreement and transactions from, and to elect for Todd, Parent, Purchaser and their respective affiliates not to be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws of any jurisdiction that may purport to be applicable. We refer to the recommendation in clause (iv) above as the “Recommendation.”

Todd’s Board of Directors

Pursuant to the Merger Agreement, effective upon the closing of the Offer, if Purchaser then holds at least 90% of the then outstanding Shares, Purchaser will be entitled to designate a number of directors, rounded up to the next whole number, subject to compliance with applicable law, to the Todd Board that is equal to the total number of directors on the Todd Board (giving effect to the increase described in this sentence) multiplied by the percentage that the number of Shares beneficially owned by Parent and its subsidiaries, including Purchaser (including Shares accepted for payment), bears to the total number of Shares then outstanding. However, if Parent’s designees are appointed or elected to the Todd Board, until the effective time of the Merger, the Todd Board will have at least two independent directors (as defined by the rules of NYSE).

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Todd has agreed to take all action requested by Parent to cause Parent’s designees to be elected or appointed to the Todd Board, including by increasing the number of directors and seeking and accepting resignations from incumbent directors. After the closing of the Offer, Todd will also, upon Parent’s request, cause the directors elected or designated by Parent to constitute the proportional number of members, rounded up to the next whole number, on (i) each committee of the Todd Board (except for any committee established to take action with respect to the Offer or the Merger Agreement), (ii) the board of directors of each subsidiary of Todd and (iii) each committee (or similar body) of each such board, in each case, to the fullest extent permitted by applicable law and the rules of NYSE.

Top-Up

Pursuant to the Merger Agreement, Todd granted to Purchaser an irrevocable option (the “Top-Up”) to purchase additional Shares at a price per share equal to the Offer Price (the “Top-Up Shares”) that, when added to the number of Shares owned by Parent and any of its subsidiaries immediately prior to the time of such exercise, will constitute at least 90% of the Shares then outstanding (after giving effect to the Top-Up) on a “fully-diluted basis” (which assumes conversion or exercise of all outstanding derivative securities that are vested or otherwise exercisable, regardless of the conversion or exercise price, or other terms thereof). The Top-Up is only exercisable for a number of Shares that are authorized and unissued or held in Todd’s treasury. The Top-Up is intended to expedite the timing of the completion of the Merger by permitting the Merger to occur pursuant to Delaware’s short-form merger statute. If the Minimum Tender Condition has been satisfied, effective as of the closing of the Offer, Purchaser will be deemed to have automatically exercised the Top-Up. Upon the closing of the purchase of the Top-Up Shares purchased pursuant to the Top-Up, Purchaser will pay to Todd the purchase price owed by it to Todd to purchase that number of Top-Up Shares required to effect the Top-Up, at Purchaser’s option, (i) in cash or (ii) by (a) paying in cash, an amount equal to not less than the aggregate par value of the such Top-Up Shares and (b) executing and delivering to Todd a promissory note, with such terms as specified in the Merger Agreement, having a principal amount equal to the aggregate purchase price pursuant to the Top-Up less the amount paid in cash. Based on representations and warranties of Todd concerning the number of issued and outstanding Shares and authorized but unissued Shares, we estimate that at least 67% of the issued and outstanding Shares would need to be tendered to trigger the automatic exercise of the Top-Up.

The Merger

The Merger Agreement provides that, following completion of the Offer, if applicable, and subject to the terms and conditions of the Merger Agreement, and in accordance with the DGCL, at the effective time of the Merger:

• Purchaser will be merged with and into Todd and, as a result of the Merger, the separate corporate existence of Purchaser will cease;

• Todd will be the surviving corporation in the Merger and will become a wholly-owned subsidiary of Parent; and

• all of the properties, rights, privileges, powers and franchises of Todd and Purchaser will vest in the surviving corporation, and all of the claims, obligations, liabilities, debts and duties of Todd and Purchaser will become the claims, obligations, liabilities, debts and duties of the surviving corporation.

If the Minimum Tender Condition is not met, and in certain other circumstances, the parties have agreed to complete the Merger without the prior completion of the Offer, after the receipt of the approval of a majority of Todd’s stockholders for the adoption of the Merger Agreement.

Certificate of Incorporation; Bylaws; Directors and Officers of the Surviving Corporation. At the effective time of the Merger, Purchaser’s certificate of incorporation as in effect immediately prior to the effective time of the Merger will be the certificate of incorporation of the surviving corporation, except that all references to the Purchaser will be automatically be amended and will become references to the surviving corporation. The

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by-laws of Purchaser as in effect immediately prior to the effective time of the Merger will be the by-laws of the surviving corporation. The directors of Purchaser will become the directors of the surviving corporation and the officers of Todd will become the officers of the surviving corporation.

Merger Closing Conditions. The obligations of Parent and Purchaser, on the one hand, and Todd, on the other hand, to complete the Merger are each subject to the satisfaction or (to the extent permitted by applicable law) the waiver of the following conditions:

• the affirmative vote of holders of a majority of Shares entitled to vote at a stockholders’ meeting to adopt the Merger Agreement (the “Stockholder Approval”) must have been obtained, if required by applicable law;

• the waiting period (and any extension thereof) applicable to the Merger and, unless the Offer Termination (as defined on page 49), has occurred, the Offer, under the HSR Act and all applicable merger control, antitrust or similar laws must have expired unless early termination has been granted, and any approval or consent of any governmental entity that is necessary for the Merger to be consummated has been obtained and be in fully force and effect, unless such failure would, upon the consummation of the Merger not have a Material Adverse Effect;

• the consummation of the Merger will not then be restrained, enjoined, or prohibited by any law or any order of any government entity, the effect of which would (i) make illegal or materially delay consummation of the Merger, (ii) restrict the ownership or operation by Parent or any of its subsidiaries of any portion of its business, compel Parent to dispose of or hold separately any portion of their business, or impose any limitation, restriction or prohibition on the ability of Parent, Todd or any of their respective subsidiaries to conduct its business, (iii) impose limitations on the ability of Parent or any of its subsidiaries to exercise full rights of ownership in the Shares, or (iv) require divestiture by Parent or any of its subsidiaries of any of the Shares; and

• Purchaser shall have accepted for payment the Shares validly tendered and not withdrawn pursuant to the Offer, unless the Offer Termination (as defined on page 49) shall have occurred.

Solely if the Offer Termination has occurred, the obligations of Parent and Purchaser, on the one hand, and Todd, on the other hand, to complete the Merger will be subject to the satisfaction or (to the extent permitted by applicable law) the waiver of certain additional conditions:

• the accuracy of the representations and warranties set forth in the Merger Agreement;

• the performance of the obligations in the Merger Agreement required to be performed prior to the closing of the Merger;

• that there has been no change, event or occurrence since the date of the Merger Agreement that has had or would have a Material Adverse Effect with respect to Todd;

• that immediately prior to the closing of the Merger (before giving effect to the Financing and the consummation of the Merger), Todd is solvent; and

• that Frank Foti, the President, Chairman and Manager of Parent, who owns 98% of the equity interests of Parent and whose presence is critical to the successful completion of the Offer and the Merger, has died or become disabled.

Merger Consideration. At the effective time of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger, other than Shares owned by Parent or Purchaser immediately prior to the effective time of the Merger, or any stockholder of Todd who is entitled to and properly exercises appraisal rights under Delaware law, will automatically be converted into the right to receive the Offer Price in cash, without interest and less any applicable withholding and transfer taxes. All shares converted into the right to receive the Offer Price will be canceled and cease to exist.

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Payment for Todd Shares. Before the Merger, Parent will designate a bank or trust company reasonably acceptable to Todd to make payment of the Merger Consideration (the “Paying Agent”). At the effective time of the Merger, Parent will cause to be deposited, with the Paying Agent, the funds necessary to pay the aggregate Merger Consideration to the stockholders.

As soon as reasonably practicable after the effective time of the Merger, the Paying Agent will send to each holder of Shares the Letter of Transmittal and instructions advising the stockholders how to surrender stock certificates in exchange for the Merger Consideration. The Paying Agent will pay the Merger Consideration to the stockholders upon receipt of (i) a surrendered certificate(s) representing the Shares (or, if the Shares are held in uncertificated form, receipt of an “Agent’s Message” by the Paying Agent) and (ii) the signed Letter of Transmittal and any other items reasonably required by the Paying Agent. Interest will not be paid or accrue in respect of the Merger Consideration. The amount of Merger Consideration paid to the stockholders will be reduced by any applicable withholding and transfer taxes.

If any cash deposited with the Paying Agent is not claimed within six months following the effective time of the Merger, such cash will be returned to Parent or the surviving corporation, upon demand, and any holders of Share certificates who have not already complied with exchange procedures in the Merger Agreement will thereafter look only to the surviving corporation for, and the surviving corporation will remain liable for, payment of their claims for the Merger Consideration, without any interest.

The transmittal instructions will include instructions if the stockholder has lost the Share certificate or if it has been stolen or destroyed. The stockholder will have to provide an affidavit to that fact and, if required by the surviving corporation, post a bond in an amount that the surviving corporation reasonably directs as indemnity against any claim that may be made against it in respect of the Share certificate.

Treatment of Todd’s Equity Awards. At the effective time of the Merger, each of (i) the stock-settled appreciation rights (“SSARs”) outstanding as of such date, whether vested or unvested and (ii) the restricted stock unit awards outstanding as of such date, which have not then vested and become converted into Shares (collectively, we refer to (i) and (ii) together as the “Company Equity Awards”), will vest in full and be converted into the right to receive an amount in cash equal to the Offer Price, less, in the case of the SSARs, the exercise price per share of Company Common Stock linked to such SSAR. Immediately prior to the consummation of the Merger, each outstanding share of restricted stock that has not vested, will vest, will be treated as a Share in the Merger, and will be exchanged for the right to receive an amount equal to $22.27 per Share, less any applicable withholding and transfer taxes.

Representations and Warranties

The Merger Agreement contains representations and warranties of Todd, Parent and Purchaser. Some of the representations and warranties in the Merger Agreement made by Todd are qualified as to “materiality” or “Material Adverse Effect.” For purposes of the Merger Agreement, “Material Adverse Effect” means any state of facts, condition, change, effect, development, occurrence or event with respect to Todd or its subsidiaries, taken as a whole, that, individually or in the aggregate, (i) results in or could reasonably be expected to result in a material adverse effect on the business, assets, liabilities, properties, condition (financial or otherwise) or results of the operations of Todd and its subsidiaries, taken as a whole or (ii) prevents or materially impedes the ability of Todd to perform its obligations under the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement. For the purposes of clause (i) above, none of the following will be deemed, either alone or in combination, to constitute, and none of the following will be taken into account in determining whether there has been or will be a “Material Adverse Effect”:

• any events generally affecting the industry in which Todd and its subsidiaries primarily operate or the economy, financial or capital markets in the United States;

• any events arising from or otherwise relating to any war (whether or not declared), national or international hostilities, sabotage or terrorism;

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• any failure, in and of itself, by Todd to meet any internal or published projections or predictions (whether such projections or predictions were made by Todd or one of its subsidiaries or independent third parties) for any period ending on or after the date of the Merger Agreement, provided that the underlying causes of such failure are not excluded from the determination of a Material Adverse Effect;

• any events resulting out of or arising out of any change in applicable laws or generally accepted accounting principles in the United States (“GAAP”) after the date of the Agreement;

• any events (including, assuming Todd’s compliance with its covenants in the Merger Agreement any loss of employees or any loss of, or any disruption in, supplier, customer, licensor, licensee, partner or similar relationships) attributable to the announcement or pendency of the Merger and the Offer;

• any events resulting from changes in the market price or trading volume of Todd’s stock;

• any events resulting from any action taken by Todd or any of its subsidiaries at the written request of Parent or Purchaser or otherwise required by the Merger Agreement; or

• any events resulting solely due to the identity of, or any facts or circumstances relating to Parent or Purchaser or their affiliates;

excluding, in the case of the first, second, and fourth bullet points above, any event that disproportionately affects, individually or together with other events, Todd and its subsidiaries when compared to other persons operating in the industry in which Todd and its subsidiaries operate.

In the Merger Agreement, Todd has made customary representations and warranties to Parent and Purchaser with respect to, among other things:

• corporate matters related to Todd and its subsidiaries, such as organization, standing and corporate power;

• its capitalization;

• authority to enter into the Merger Agreement and approval by the Todd Board;

• the absence of conflicts with its organizational documents, contracts, and laws;

• public SEC filings and financial statements;

• the accuracy of information contained in the Schedule 14D-9 and Proxy Statement to be filed by Todd;

• the absence of undisclosed liabilities;

• litigation;

• material contracts, including government contracts;

• permits and compliance with laws;

• environmental matters;

• insurance;

• labor and employment matters;

• employee benefits;

• tax matters;

• title to properties;

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• intellectual property;

• brokers and other advisors;

• opinion of its financial advisor with respect to the fairness of the Offer Price;

• the vote required for the adoption of the Merger Agreement and the approval of the Merger and the transactions contemplated by the Merger Agreement;

• solvency;

• that Todd is not party to any standstill agreements or confidentiality agreements that limit the provision of information to Parent or Purchaser; and

• inquiries or proposals with respect to Takeover Proposals (as defined on page 45).

In the Merger Agreement, Parent and Purchaser have made customary representations and warranties to Todd with respect to, among other things:

• corporate matters related to Parent and Purchaser, such as organization, standing and corporate power;

• authority;

• non-contravention;

• the accuracy of the information incorporated in the offer documents and supplied for incorporation in the 14D-9, the Information Statement or the Proxy Statement;

• ownership and operation of Purchaser;

• ownership of Todd’s capital stock;

• solvency;

• financing;

• litigation; and

• brokers and other advisors.

None of the representations and warranties contained in the Merger Agreement survives the consummation of the Merger.

Conduct of Business of Todd

The Merger Agreement provides that during the period from the date of the Merger Agreement to the effective time of the Merger, except with the prior written consent of Parent, Todd and its subsidiaries will:

• carry on their respective businesses in the ordinary course consistent with past practice and comply with all applicable laws and accounting standards;

• use their reasonable best efforts to keep available the services of their present officers and other employees and to preserve their assets and their relationships with customers, suppliers, distributors and others having business dealings with them; and

• maintain their rights and permits.

In addition, during the period from the date of the Merger Agreement to the effective time of the Merger, except (i) with the prior written consent of Parent, (ii) as may be otherwise required by applicable law (including

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the rules of NYSE, excluding any stockholder voting requirements), (iii) as specifically contemplated by the Merger Agreement, or (iv) as previously disclosed to Parent in connection with the Merger Agreement, Todd and its subsidiaries will not take the following actions, subject to the thresholds and exceptions specified in the Merger Agreement:

• declare dividends (other than the payment of the quarterly cash dividend declared by Todd on August 20, 2010 of $0.10 per Share and a dividend of $0.10 per Share contemplated to be declared in December 2010 to be paid after March 11, 2011 to stockholders of record as of a date after March 11, 2011), split, combine or reclassify stock, or purchase redeem or otherwise acquire any Shares or other securities of Todd or its subsidiaries except pursuant to forfeiture of Equity Awards, or restricted stock, or the acquisition of the trustee of the Todd 401(k) plan of Shares on the open market to satisfy participant elections under such 401(k) plan;

• issue, deliver, sell, pledge or otherwise encumber any Shares or any other equity or voting interests or any securities convertible into, or warrants, calls or rights to acquire any such Shares, interests or securities;

• amend Todd’s certificate of incorporation or by-laws or comparable organizational documents of any of Todd’s subsidiaries;

• acquire, merge with, or purchase all or substantially all of the assets of or equity or voting interest in any other entity or business;

• sell, lease, license or mortgage or otherwise subject to any lien or otherwise dispose of any material portion of properties or assets, other than in the ordinary course of business, excluding investment securities;

• repurchase, prepay or incur any indebtedness or make any loans, advances, capital contributions or investments in any other entity, except for Todd subsidiaries;

• incur or commit to incur any capital expenditures other than in the ordinary course of business or to replace or repair damaged or obsolete equipment;

• pay, discharge, settle or satisfy any claims, other than in the ordinary course of business consistent with past practice, waive, relinquish, release or transfer any right of material value, or disclose any confidential or proprietary information, other than pursuant to confidentiality agreements;

• enter into any material contract or modify in any material respect any existing material contract, excluding in each case customer contracts and bids or proposals for new customer contracts;

• adopt, terminate or amend any benefit plan, increase the compensation or benefits of or pay a loan to any personnel, grant or amend any awards under a company benefit plan, grant severance or separation pay, enter into any trust, annuity or insurance contract or make any determination under a benefit plan that is inconsistent in any material respect with the ordinary course of business and past practice;

• form a subsidiary;

• enter into any contract containing any restriction on the ability of Todd or its subsidiaries to assign its rights thereunder;

• enter into any collective bargaining agreement or labor union contract;

• write down any material assets other than as may be consistent with historical accounting practices;

• enter into any agreement that would require or cause Todd to abandon or delay the Offer or the Merger;

• fail to keep in force any material insurance policy or replacement policy;

• adopt a plan of liquidation, dissolution, or merger;

• enter into a new line of business outside its existing business segments;

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• convene any special meeting of the stockholders other than the stockholder’s meeting contemplated by the Merger Agreement (if required by the Merger Agreement and applicable law);

• take any action intended to result in any of the conditions of the Offer or the Merger to not be satisfied or to delay or prevent the ability of Todd to consummate the Merger; or

• authorize, or commit to or agree to take any of, the foregoing actions.

Go-Shop; Solicitation

Solicitation Period. During the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m., New York City time, on January 28, 2011 (the “Initial No-Shop Period Start Date”) Todd may, directly or through its representatives: (i) solicit, initiate or encourage, whether publicly or otherwise, any Takeover Proposals (as defined on page 45), including by way of providing access to non-public information; however, Todd will only permit such non-public information related to Todd to be provided pursuant to an Acceptable Confidentiality Agreement (as defined below) and Todd will promptly provide to Parent any non-public information concerning Todd or its subsidiaries to which any person is provided such access and which was not previously provided to Parent, and (ii) engage in and maintain discussions or negotiations with respect to any inquiry, proposal or offer that constitutes or may reasonably be expected to lead to any Takeover Proposal or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, offers, discussions or negotiations or the making of any Takeover Proposal. Todd may, in its sole and absolute discretion, extend the No-Shop Period Start Date for up to 14 calendar days beyond the Initial No-Shop Period Start Date (the “Extended No-Shop Period Start Date”) by delivering written notice to Parent at least four business days before the Initial No-Shop Period Start Date. “No-Shop Period Start Date” means the Initial No-Shop Period Start Date or the Extended No-Shop Period Start Date, if such right of extension is exercised by Todd. If Todd elects to extend the Initial No-Shop Period Start Date, we will extend the Offer for the same time period.

No Solicitation Period. From the No-Shop Period Start Date until the effective time of the Merger, or, if earlier, the termination of the Merger Agreement in accordance with its terms, Todd will not, nor will it permit any representative of Todd to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of providing information) the submission or announcement of any inquiries, proposals or offers that constitute or would reasonably be expected to lead to any Takeover Proposal, (ii) provide any non-public information concerning Todd or any of its subsidiaries related to, or to any person or group who would reasonably be expected to make, any Takeover Proposal, (iii) engage in any discussions or negotiations with respect thereto, (iv) approve, support, adopt, endorse or recommend any Takeover Proposal, or (v) otherwise cooperate with or assist or participate in, or knowingly facilitate any such inquiries, proposals, offers, discussions or negotiations. Subject to the section of the Merger Agreement governing Todd’s response to Takeover Proposals, at the No-Shop Period Start Date, Todd will immediately cease and cause to be terminated any solicitation, encouragement, discussion or negotiation with any person or groups (other than a Qualified Go-Shop Bidder (as defined on page 45)) conducted as of such date by Todd, its subsidiaries or any of their respective representatives with respect to any Takeover Proposal and will use reasonable best efforts to require any other parties (other than a Qualified Go-Shop Bidder) who have made or have indicated an intention to make a Takeover Proposal to promptly return or destroy any confidential information previously furnished by Todd, any of its subsidiaries or any of their respective representatives.

For purposes of this Offer to Purchase and the Merger Agreement:

• “Acceptable Confidentiality Agreement” means a confidentiality and standstill agreement with terms that are substantively similar to those contained in the confidentiality agreements between Todd and Parent; provided that such confidentiality and standstill agreement will expressly not prohibit or adversely affect the rights of Todd and its subsidiaries thereunder upon compliance by Todd and its subsidiaries with the terms of the Merger Agreement.

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• “Qualified Go-Shop Bidder” means any person or group from whom Todd or any of its representatives has received a Takeover Proposal after the execution of the Merger Agreement and prior to the No-Shop Period Start Date that the Todd Board determines, prior to or as of the No-Shop Period Start Date, in good faith, after consultation with its financial advisor and outside legal counsel, constitutes or could reasonably be expected to result in a Superior Proposal (as defined below).

• “Superior Proposal” means any bona fide written Takeover Proposal that is financed on terms no less favorable to Todd than the Financing, and that, if consummated would result in a person or group (or the shareholders of any person) owning, directly or indirectly, (i) more than 75% of the outstanding Shares or (ii) all or substantially all of the assets of Todd and its subsidiaries, taken as a whole, in either case which the Todd Board determines in good faith (after consultation with its financial advisor and outside legal counsel) (a) is reasonably likely to be consummated in accordance with its terms, and (b) if consummated, would be more favorable to Todd stockholders from a financial point of view than the Offer and the Merger, in each case taking into account, among other things, the financial, legal, regulatory aspects of such Takeover Proposal, including any financing contingencies, the timing and likelihood of consummation of such transaction, the provisions of the Merger Agreement (including any changes to the terms of the Merger Agreement proposed by Parent in connection with a response to a change in recommendation by the Todd Board), and to the extent the Todd Board deems it relevant and applicable, the payment of a termination fee pursuant to the Merger Agreement.

• “Takeover Proposal” means any inquiry, proposal or offer from any person or group providing for (i) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (a) 10% or more (based on the fair market value, as determined in good faith by Todd Board) of assets (including capital stock of Todd’s subsidiaries) and its subsidiaries, taken as a whole, or (b)(1) Shares, which together with any other Shares beneficially owned by such person or group, would equal to 10% or more of the outstanding Shares, or (2) any other equity securities of Todd or any of its subsidiaries, (ii) any tender offer or exchange offer that, if consummated, would result in any person or group owning, directly or indirectly, 10% or more of the outstanding Shares or any other equity securities of Todd or any of its subsidiaries, (iii) any merger, consolidation, business combination, binding share exchange or similar transaction involving Todd or any of its subsidiaries pursuant to which any person or group (or the shareholders of any person) would own, directly or indirectly, 10% or more of the aggregate voting power of Todd or of the surviving entity in a merger or the resulting direct or indirect parent of Todd or such surviving entity, or (iv) any recapitalization, liquidation, dissolution or any other similar transaction involving Todd or any of its material operating subsidiaries, other than, in each case, the transactions contemplated by the Merger Agreement.

The Todd Board’s Recommendation; Adverse Recommendation Changes. As described above, and subject to the provisions described below, the Todd Board has made the Recommendation that the holders of the Shares accept the Offer, tender their Shares to Purchaser in the Offer and adopt the Merger Agreement. The Todd Board also agreed to include the Recommendation in the Schedule 14D-9 and to permit Parent to include the Recommendation in this Offer to Purchase and documents related to the Offer. The Merger Agreement provides that the Todd Board will not effect an “Adverse Recommendation Change” (as defined below) except as described below.

Neither the Todd Board nor any committee thereof will (i) withdraw or rescind (or modify in a manner adverse to Parent), or publicly propose to withdraw (or modify in a manner adverse to Parent), the Recommendation or the findings or conclusions of the Todd Board described in the board resolutions adopted in connection with the execution of the Merger Agreement, (ii) approve or recommend the adoption of, or publicly propose to approve, declare the advisability of or recommend the adoption of, any Takeover Proposal, (iii) cause or permit Todd or any of its subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement related to any Takeover Proposal, other than any Acceptable Confidentiality Agreement, or (iv) publicly propose or announce an intention to take any of the foregoing actions (we refer to any action described in clauses (i), (ii), (iii) or (iv) as an “Adverse Recommendation Change”).

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The Todd Board is entitled to make an Adverse Recommendation Change if it (i) receives a bona fide written Takeover Proposal that it determines in good faith (after consultation with its outside counsel) constitutes a Superior Proposal, or (ii) if an Intervening Event has occurred, and (in the case of both (i) and (ii)) if (a) it determines in good faith (after consultation with its outside legal counsel) that the failure to take such action would be inconsistent with its fiduciary duties under applicable law and (b) Todd has provided prior written notice to Parent and Purchaser, at least three business days in advance, that it will effect an Adverse Recommendation Change or terminate the Merger Agreement in such circumstances and specifying the reasons for such actions (any material amendment to the terms of any Superior Proposal or any material change to the facts and circumstances relating to an intervening Event, in each case that was previously the subject of such a notice will require a new notice, except that the prior written notice period and corresponding references to a three business day period will be reduced to a one business day period).

To the extent that such Adverse Recommendation Change or termination is being made as a result of a Superior Proposal:

(i) the notice to Parent must specify the identity of the party making such Superior Proposal and the material terms thereof, and copies of all relevant documents relating to such Superior Proposal;

(ii) after providing any notice to Parent, Todd must, and must cause its representatives to, negotiate with Parent and Purchaser in good faith (to the extent Parent and Purchaser desire to negotiate) during such three business day period (or one business day period in the event of amended notice) to make such adjustments in the terms and conditions of the Merger Agreement; and

(iii) in the case of either clause (i) or clause (ii) above, the Todd Board must have considered in good faith any adjustments to the Merger Agreement (including a change to the price terms thereof) that may be offered in writing by Parent no later than 5:00 p.m., New York City time, on the third business day of such three business day period (or the first business day of such one business day period in the event of an amended notice) and must have determined that the Superior Proposal would continue to constitute a Superior Proposal if such adjustments were to be given effect.

To the extent that the Adverse Recommendation Change is being made in response to an Intervening Event (as defined below):

(i) the notice to Parent must specify the Intervening Event in reasonable detail;

(ii) after providing notice to Parent, Todd must, and must cause its representatives to, negotiate with Parent and Purchaser in good faith (to the extent Parent and Purchaser desire to negotiate) during such three business day period (or one business day period in the event of an amended notice) to amend the Merger Agreement in a manner that such Intervening Event no longer necessitates such Adverse Recommendation Change; and

(iii) the Todd Board must have considered in good faith any adjustments to the Merger Agreement that may be offered in writing by Parent no later than 5:00 p.m. New York City time on the third business day of such three business day period (or first business day of such one business day period in the event of an amended notice) and must have determined in good faith (after consultation with its outside legal counsel) that such Intervening Event continues to necessitate an Adverse Recommendation Change.

If Todd has given a such notice relating to a Superior Proposal or Intervening Event, Parent, may, upon written notice to Todd, extend the effective time of the Merger, and if applicable, the expiration of the Offer (but in no event beyond the earlier to occur of (i) the three day or one day negotiation period described above, (ii) March 11, 2011, or (iii) any other date agreed by Todd, Parent and Purchaser) to allow sufficient time for negotiations among Todd, Parent, and Purchaser regarding possible adjustments to the Merger Agreement, consideration by the Todd Board of adjustments to the Merger Agreement or the determination of an Adverse Recommendation Change or termination of the Merger Agreement in accordance with its terms.

“Intervening Event” means any material event or development or material change in circumstances occurring or arising after the date of the Merger Agreement with respect to Todd that (i) was not known to either

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the Todd Board or the chief executive officer or chief financial officer of Todd as of the date of the Merger Agreement, and was not reasonably foreseeable as of the date of the Merger Agreement and (ii) does not arise from or relate to (a) any Acquisition Proposal (whether or not a Superior Proposal), (b) any events relating to Parent or Purchaser, or (c) clearance of the Offer and the Merger under the HSR Act or laws with respect to competition.

The Merger Agreement does not prohibit Todd from (i) taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to its stockholders as, in the good faith determination of the Todd Board, after consultation with its outside legal counsel, is required by applicable laws or (iii) making any “stop-look-and-listen” communication to Todd stockholders pursuant to Section 14d-9(f) promulgated under the Exchange Act (or any similar communications to Todd stockholders) in which Todd indicates that it has not changed the Recommendation.

Financing Efforts of Parent and Purchaser

Each of Parent and Purchaser will use, and cause its affiliates to use, reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and obtain the Financing on the terms and conditions contained in the Commitment Letters, including using reasonable best efforts to seek to enforce its rights under the Commitment Letters in the event of a material breach thereof by the lenders thereunder, and will not permit any material amendment or modification to be made to, or consent to any waiver of any provision or remedy under, the Commitment Letters (in each case except pursuant to the flex provisions thereof), if such amendment, modification or waiver (i) reduces the aggregate amount of the Financing from that contemplated in the Commitment Letters (including by changing the amount of fees to be paid or original issue discount), (ii) imposes new or additional conditions or otherwise expands, amends or modifies any of the conditions to the receipt of the Financing in a manner materially adverse to Parent or Todd, or (iii) amends or modifies any other terms in a manner that would reasonably be expected to (a) delay or prevent the closing of the Offer or the Merger or (b) make the timely funding of the Financing or satisfaction of the conditions to obtaining the Financing less likely to occur, or (c) adversely impact the ability of either Parent or Purchaser to enforce its rights against the other parties to the Commitment Letters.

Each of Parent and Purchaser will use, and cause its affiliates to use, its reasonable best efforts to take all actions and to do all things necessary, proper or advisable to consummate, and obtain the Financing on the terms and conditions set forth in the Commitment Letters, including using reasonable best efforts to (i) maintain in effect the Commitment Letters in accordance with their terms, (ii) to satisfy all conditions and covenants applicable to Parent and Purchaser in the Commitment Letters, (iii) to negotiate and enter into all definitive agreements with respect to the Financing contemplated by the Commitment Letters, (iv) to satisfy all conditions to such definitive agreements that are applicable to Parent and Purchaser and to consummate the Financing at or prior to the closing of the Offer or, in the event the closing of the Offer does not occur, the Merger, and (v) to comply with its obligations under the Commitment Letters.

In addition, each of Parent and Purchaser will use their best efforts to take all actions and to do all things necessary, proper or advisable to consummate, and will use the proceeds of the Financing for payment of (i) the aggregate Offer Price, (ii) the Merger Consideration, and (iii) amounts payable to holders of Todd Equity Awards. If all of the Offer Conditions (other than the Financing Proceeds Condition) have been satisfied or waived, or if the Offer Termination has occurred, all of the conditions to the Merger have been satisfied or waived, then Parent will consummate the Financing and will use the proceeds of the Financing no later than the earlier to occur of the closing date of the Offer or the Merger.

Financing Cooperation from Todd

Todd will, and will cause each of its subsidiaries to, and will use its reasonable best efforts to cause its representatives to provide to Parent such reasonable cooperation, at Parent’s sole expense, as may be reasonably

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requested by Parent to assist Parent in causing the conditions in the Commitment Letters to be satisfied and such cooperation as is otherwise necessary and reasonably requested by Parent in connection with the Financing, including:

• using reasonable best efforts to cause its senior executive officers to participate in a customary and reasonable number of meetings, presentations, and due diligence sessions;

• using reasonable best efforts to provide information necessary or appropriate in connection with the preparation of customary bank memoranda and bank syndication materials, offering documents, private placement memoranda and similar documents required in connection with the Financing;

• furnishing Parent and its financing sources with certain financial statements;

• requesting that its auditors cooperate with Parent’s reasonable efforts to obtain customary comfort letters;

• using reasonable best efforts to cooperate with Parent’s efforts to obtain consents, landlord waivers and estoppels, non-disturbance agreements, appraisals of owned real property, surveys and title insurance as reasonable requested by Parent;

• reasonably cooperating to permit the prospective lenders to evaluate its current assets, cash management, and accounting systems;

• requesting customary payoff letters, lien terminations and instruments of discharged to be delivered at the closing of the Merger to allow for the payoff, discharge and termination in full of all indebtedness and liens under Todd’s existing credit agreement; and

• furnishing Parent and its financing sources promptly with all documentation and other information required by governmental entities with respect to the Financing.

Obligations with Respect to the Proxy Statement

The Merger Agreement provides that as soon as practicable after the date of the Merger Agreement, Todd will prepare and file with the SEC in preliminary form a Proxy Statement relating to a meeting of Todd’s stockholders to approve the Merger, if required by applicable law (the “Stockholders’ Meeting”), which will include the Recommendation with respect to the Merger, the fairness opinion issued by Todd’s financial advisor, and a copy of Section 262 of the DGCL. If the adoption of the Merger Agreement by Todd’s stockholders is required by applicable law, then Todd will have the right at any time after the Proxy Statement Clearance Date to (and Parent and Purchaser will have the right, at any time after the later of such date and the termination of the Offer on account of the failure of the Minimum Tender Condition to request in writing that Todd, and upon receipt of such written request, Todd will, as promptly as practicable and in any event within ten business days), (a) establish a record date for and give notice of a meeting of its stockholders in accordance with its by-laws, for the purpose of voting upon the adoption of the Merger Agreement, and (b) mail a Proxy Statement to the holders of Shares as of the record date established for the Stockholders’ Meeting.

Efforts to Close the Transaction

In the Merger Agreement, each of Todd, Parent and Purchaser agrees to use its reasonable best efforts to take all actions necessary, proper or advisable under applicable law to consummate, as promptly as reasonably practicable, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including making all necessary filings, notices, and other documents necessary to consummate the Offer, the Merger and other transactions contemplated by the Merger Agreement.

Takeover Statutes

If any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws becomes applicable to Todd, Parent or Purchaser, the Offer, the Merger, the Top-Up (including the

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acquisition of Shares pursuant thereto) or the other transactions contemplated by the Merger Agreement, Todd and the Todd Board will take such actions as are necessary to eliminate if possible, and otherwise to minimize, the effects of such statute or regulation on the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement.

Indemnification and Insurance

Parent and Purchaser have agreed that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the Merger, now existing in favor of the current or former directors or officers of Todd or its subsidiaries as provided in their respective certificates of incorporation or by-laws (or comparable organizational documents) or in any indemnification or other agreement of Todd will be assumed by the surviving corporation in the Merger and will continue as provided in the Merger Agreement. Parent will make proper provision if the surviving corporation consolidates or merges with another entity or transfers or conveys substantially all of its assets such that the successors and assigns of the surviving corporation assume Parent’s obligations with respect to its indemnification, expense reimbursement and exculpation obligations.

For a period of five after the effective time of the Merger, Parent will maintain in effect the current or substitute policies of officers’ and directors’ liability insurance maintained by Todd and its subsidiaries on terms and coverage amounts no less favorable than the terms of such policies in effect on the date of the Merger Agreement. Alternatively, Parent may cause Todd to purchase, at or prior to the effective time of the Merger, a “tail policy” on terms and conditions providing no less favorable benefits as the current policies of directors’ and officers’ liability insurance maintained by Todd with respect to matters arising on or before the effective time of the Merger subject to the maximum premium listed in the immediate preceding sentence.

Other Covenants

The Merger Agreement contains other customary covenants, including, but not limited to, covenants relating to public announcements, employee benefits, and access and confidentiality.

Continuing Pursuit of the Merger

If at any then-scheduled expiration date, any Offer condition has not been satisfied or waived, (the “Offer Determination Date”) then Purchaser may irrevocably and unconditionally terminate the Offer if the Proxy Statement Clearance Date has occurred on or prior to such Offer Determination Date. In addition, Todd has the right, exercisable by delivering written notice to Parent and Purchaser at any time after the Offer Determination Date to cause Purchaser to, and upon receipt of such written notice, Purchaser must terminate the Offer at the then-scheduled Expiration Date. The termination of the Offer pursuant to the foregoing process is referred to as the “Offer Termination.”

Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the effective time of the Merger, whether before or after any approval of the Merger by Todd’s stockholders:

• by mutual written consent of Parent, Purchaser and Todd;

• by either Parent or Todd, if:

• the Merger has not been consummated on or before March 11, 2011; provided that this termination right will not be available to either Parent or Todd if (i) the closing of the Offer has occurred or (y) the failure of Parent or Todd, as applicable, to perform any of its obligations under the Merger Agreement has been a principal cause of the failure of the Merger to be consummated on or before such date;

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• there has been issued, enacted or promulgated a temporary restraining order, preliminary or permanent injunction, law or other judgment by any court of competent jurisdiction or other governmental entity that has the effect of preventing or making illegal the consummation of the Offer or the Merger, which is in effect and has become final and non-appealable; provided that this termination right will not be available to any party that is then in breach of its obligations under the Merger Agreement to prevent, oppose or remove such temporary restraining order, preliminary or permanent injunction, law or other judgment and such breach has been a principal cause of such restraint being or remaining in effect;

• if necessary under Delaware law, the Stockholder Approval has not been obtained at the Stockholders’ Meeting or at any adjournment or postponement of such meeting; or

• there have not been tendered and not validly withdrawn before the Expiration Date, the number of Shares which, when added together with the Shares already owned by Parent and its subsidiaries (excluding the number of Shares that may be validly issued as Top-Up Shares), would constitute at least 40% of the total number of outstanding Shares on the Expiration Date (for the purposes of this determination, the parties will include Shares tendered in the Offer pursuant to guaranteed delivery procedures);

• by Parent, if Todd has breached any of its representations or warranties contained in the Merger Agreement or has failed to perform any of its covenants or agreements contained in the Merger Agreement, which breach or failure to perform (i) would give rise to the failure of a condition to the Merger regarding the accuracy of Todd’s representations and warranties or Todd’s compliance with its covenants and (ii) (a) is not capable of being cured before March 11, 2011 or (b) if capable of being cured before March 11, 2011, is not cured within ten business days following Parent’s delivery of written notice to Todd of such breach or failure; provided that Parent will not have this termination right if (1) Parent or Purchaser is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement or (2) the closing of the Offer has occurred;

• by Todd, if Parent or Purchaser has breached any of its respective representations or warranties contained in the Merger Agreement or Parent or Purchaser has failed to perform any of its covenants or agreements contained in the Merger Agreement, which breach or failure to perform (i) would give rise to the failure of a condition to the Merger regarding the accuracy of the Parent’s and Purchaser’s representations and warranties or the compliance with Parent’s or Purchaser’s covenants and (ii) (a) is not capable of being cured prior to March 11, 2011 or (b) if capable of being cured by March 11, 2011, is not cured within ten business days following Todd’s delivery of written notice to Parent of such breach or failure; provided that Todd will not have this termination right if (1) Todd is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement or (2) the closing of the Offer has occurred;

• by Parent, if any of the following has occurred: (i) an Adverse Recommendation Change; (ii) Todd has delivered a notice to Parent of its intent to effect an Adverse Recommendation Change, if Parent has given Todd the right to enter into an Acquisition Agreement and such right has been available to Todd for no less than twenty-four hours, (iii) Todd failed to include in the Proxy Statement or the Schedule 14D-9, in each case, when mailed, the Recommendation and a statement of the findings and conclusions of the Todd Board described in the board resolutions adopted in connection with the Merger Agreement, (iv) if, following the disclosure or announcement of a Takeover Proposal (other than a tender or exchange offer described in clause (v) below), the Todd Board has failed to reaffirm publicly the Recommendation within five business days after Parent requests in writing that the Recommendation under such circumstances be reaffirmed publicly, or (v) a tender or exchange offer relating to securities of Todd has been commenced and Todd has not announced, within ten business days after the commencement of such tender or exchange offer, a statement disclosing that Todd recommends rejection of such tender or exchange offer (any of the forgoing actions, a “Triggering

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Event”); provided that Parent will not have this termination right if (a) the closing of the Offer has occurred or (b) unless Section 253 of the DGCL is applicable, the approval of the Merger by Todd Stockholders has been obtained;

• by Todd, to either accept a Superior Proposal and enter into the Acquisition Agreement providing for such Superior Proposal immediately following or concurrently with such termination or on account of an Intervening Event; provided, that payment of the Termination Fee (as described below) is a condition to the termination of the Merger Agreement by Todd in this circumstance;

• by Todd, if (i) (a) all the Offer conditions have been satisfied or waived as of the expiration of the Offer, and (b) Parent has failed to consummate the Offer promptly thereafter in accordance with the Merger Agreement, or (ii) (a) all the Offer conditions (other than the Financing Proceeds Condition) have been satisfied or waived as of the Expiration Date, and (b) Parent has failed to consummate the Offer in accordance with the Merger Agreement, in the case of both clause (i) and (ii), Todd must have given Parent written notice at least one business days prior to such termination stating Todd’s intention to terminate the Merger Agreement in this circumstance and the basis for such termination; or

• by Todd, if (i) all the conditions that are applicable to each party’s obligation to consummate the Merger (other than the purchase of the Shares to the extent the Offer Termination has occurred) and the conditions to the obligations of Parent and Purchaser to consummate the Merger have been satisfied (other than those conditions that by their terms are to be satisfied by actions taken at the closing of the Merger, each of which is capable of being satisfied at the closing of the Merger), (ii) Parent has failed to consummate the Merger by the second business day following adoption of the Merger Agreement at the Stockholders’ Meeting, (iii) Todd has notified Parent in writing that it stands and will stand ready, willing and able to consummate the Merger at such time, and (iv) Todd has given Parent written notice at least one business day prior to such termination stating Todd’s intention to exercise this termination right.

Effect of Termination

If the Merger Agreement is terminated in accordance with its terms, it will become null and void, without any liability or obligation on the part of Todd, Parent or Purchaser or their respective representatives other than obligations to pay any termination fees, as further described below, except that certain provisions will survive the termination of the Merger Agreement, including, among others, the confidentiality, termination, specific performance, and governing law provisions. No party is relieved of any liability for any breach of any of its representations, warranties, covenants or agreements contained in the Merger Agreement prior to such termination, unless such party is obligated to pay and has paid when due a termination fee under the terms of the Merger Agreement, or for fraud.

Termination Fees

Todd has agreed to pay Parent a termination fee of $4,550,000 (the “Termination Fee”) as follows:

• if the Merger Agreement is terminated by Todd for Todd to accept a Superior Proposal and enter into an Acquisition Agreement, with such Termination Fee being payable concurrently with, and as a condition to the effectiveness of, such termination;

• if the Merger Agreement is terminated by Parent upon an Adverse Recommendation Change or other Triggering Event (as described above), with such Termination Fee being payable within two business days following such termination;

• if the Merger Agreement is terminated by Parent due to the failure by Todd to perform certain specified covenants or agreements contained in the Merger Agreement, which failure is the principal factor in the failure of the Offer or the Merger to be consummated; or

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• if (i) a Takeover proposal has been made, and (ii) thereafter, the Merger Agreement is terminated (a) by Parent or Company due to the failure of Todd stockholders to adopt the Merger Agreement at the Stockholders’ Meeting, to the extent such stockholder approval is required by applicable law, or (b) by Parent due to a breach of Todd’s representations, warranties, covenants or agreements set forth in the Merger Agreement, and (iii) within 12 months after any such termination, Todd and any Person or group (or its affiliate) who made such a Takeover Proposal enter into a definitive agreement providing for any transaction that would constitute a Takeover Proposal (which transaction is thereafter consummated), then such Termination Fee shall be paid on the date such transaction is consummated. For purposes of determining whether the termination fee is payable under the circumstances described in the previous sentence, the term Takeover Proposal has the meaning described below, except that the references to “10%” in the definition of Takeover Proposal shall be deemed to be references to “50%.”

Todd has agreed to reimburse Parent for all transaction expenses incurred by Parent, Purchaser or their affiliates up to the date of termination in an amount not to exceed $2,900,000 by payment of such amount as promptly as reasonable practicable and in any event within two business days of request therefor if the Merger Agreement is terminated by Parent or Todd due to the failure of the Merger to be completed by March 11, 2011, and, at the time of such termination, all of the conditions to the Merger other than those relating to regulatory approvals have been satisfied and within 12 months after such termination, Todd and any Person or group (or its affiliate) enter into a definitive agreement providing for any transaction that would constitute a Takeover Proposal (which transaction is thereafter consummated). For purposes of determining whether expenses are payable under the circumstances described in the previous sentence, the term Takeover Proposal has the meaning described below, except that the references to “10%” in the definition of Takeover Proposal shall be deemed to be references to “50%”.

Parent has agreed to pay Todd a termination fee of $6,500,000 (the “Reverse Termination Fee”) as follows (such Reverse Termination Fee will be payable by Parent within two business days following the date of termination of the Merger Agreement in such circumstances):

• if the Merger Agreement is terminated by Todd due to the failure by Parent or Purchaser to perform certain specified covenants or agreements contained in the Merger Agreement, which failure to perform is the principal factor in the failure of the Offer or the Merger to be consummated;

• if the Merger Agreement is terminated by Todd at such time as (i) (a) all the Offer Conditions have been satisfied or waived as of the Expiration Date, and (b) Parent has failed to consummate the Offer promptly thereafter in accordance with the Merger Agreement, or (ii) (a) all the Offer conditions (other than the Financing Proceeds Condition) have been satisfied or waived as of the Expiration Date, and (b) Parent shall have failed to consummate the Offer in accordance with the Merger Agreement, in the case of both clause (i) and (ii), Todd has given Parent written notice at least one business day prior to such termination stating Todd’s intention to terminate the Merger Agreement in this circumstance and the basis for such termination; or

• if the Merger Agreement is terminated by Todd, after the close of business on the second business day following the stockholders’ meeting if (i) all the conditions that are applicable to each party’s obligation to consummate the Merger (other than the purchase of the Shares to the extent the Offer Termination has occurred) and the conditions to the obligations of Parent and Purchaser to consummate the Merger have been satisfied (other than those conditions that by their terms are to be satisfied by actions taken at the closing of the Merger, each of which is capable of being satisfied at the closing of the Merger), (ii) Parent has failed to consummate the Merger by the time required under the Merger Agreement, (iii) Todd has notified Parent in writing that it stands and will stand ready, willing and able to consummate the Merger at such time, and (iv) Todd has given Parent written notice at least one business day prior to such termination stating Todd’s intention to terminate the Merger Agreement in this circumstance and the basis for such termination.

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Specific Performance

Parent, Purchaser and Todd are entitled to an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement in the Delaware court of Chancery (or, if the Delaware Court of Chancery is unavailable, in U.S. Federal Court); provided that no party is entitled to seek such equitable relief if a party is entitled to recover a termination fee under the terms of the Merger Agreement (except for an injunction to stop breaches or potential breaches of the Merger Agreement with respect to agreements regarding confidentiality agreements).

Amendment

The Merger Agreement may be amended by Parent, Purchaser and Todd at any time before or after the closing of the Offer or receipt of the Stockholder Approval; provided, that (i) after the closing of the Offer, there will be no amendment that decreases the Merger Consideration, and (ii) after the Stockholder Approval has been obtained, no amendment will be made that by law requires further approval by Todd stockholders without such approval having been obtained. In addition, if Parent exercises its right to appoint members of Todd’s Board following the closing of the Offer, all amendments to the Merger Agreement or waivers of Todd’s rights or concessions to Parent or Purchaser will require the approval of a majority of the independent directors.

Governing Law

The Merger Agreement is governed by Delaware law.

Stockholder Tender Agreement

Concurrently with the execution of the Merger Agreement, all of Todd’s directors, executive officers, and Woodbourne Partners, L.P., a private investment company that holders Shares, entered into a Stockholder Tender Agreement with Todd pursuant to which such stockholders have agreed to tender their Shares in the Offer upon the terms and subject to the conditions of such agreement and granted proxies to Parent and Purchaser or otherwise agreed to vote such Shares in favor of the Merger, if necessary. The Shares subject to the Stockholder Tender Agreement comprise approximately 15.3% of the outstanding Shares. The Stockholder Tender Agreement will terminate upon certain circumstances, including upon termination of the Merger Agreement.

12. Purpose of the Offer; Plans for Todd.

Purpose of the Offer. The purpose of the Offer is to acquire control of, and the entire equity interest in, Todd. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. All Shares acquired by Purchaser pursuant to the Offer will be retained by Purchaser pending the Merger. If the Offer is successful, Purchaser intends to consummate the Merger as promptly as practicable.

The Todd Board upon the recommendation of the Transaction Committee of the Todd Board, by a unanimous vote of the disinterested directors (i) determined that the Merger Agreement, the Offer, the Merger, and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer, and to the extent required by applicable law, approve the Merger and adopt the Merger Agreement.

If Purchaser acquires at least 90% of the then outstanding Shares pursuant to the Offer, including the Top-Up, if applicable, the Merger may be consummated without a stockholders’ meeting and without the approval of Todd’s stockholders. If the Minimum Tender Condition is not met, and in certain other circumstances, the parties have agreed to complete the Merger without the prior completion of the Offer, after receipt of the approval of a majority of Todd’s stockholders for the adoption of the Merger Agreement. The

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Merger Agreement provides that Purchaser will be merged into Todd and that the certificate of incorporation of Todd, as amended and restated in its entirety to read identically to the certificate of incorporation of Purchaser as in effect immediately prior to the consummation of the Merger, except that all references to Purchaser will be replaced with references to the surviving corporation and the by-laws of Purchaser will be the by-laws of the surviving corporation following the Merger.

Appraisal Rights. Under the DGCL, Todd stockholders do not have appraisal rights with respect to Shares tendered and accepted for purchase in the Offer. However, if the Merger is consummated, stockholders who do not tender their Shares in the Offer and who do not vote for adoption of the Merger Agreement will have certain rights under the DGCL to demand appraisal of, and to receive payment in cash of the fair value of, their Shares, in lieu of the right to receive the Offer Price. Stockholders who comply with the applicable statutory procedures under the DGCL will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the Offer Price and the market value of the Shares. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things, that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in an appraisal proceeding. Stockholders should recognize that the value so determined could be higher or lower than the Offer Price. Moreover, Purchaser may argue in an appraisal preceding that, for purposes of such a proceeding, the fair value of the Shares is less than the Offer Price. Stockholders also should note that investment banking opinions as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the Offer or the Merger, are not opinions as to fair value under the DGCL.

The Merger Agreement provides that no dilutive effects of the Top-Up, the issuance of Shares to Purchaser pursuant to the Top-Up or Purchaser’s payment for such Shares with a promissory note will affect any appraisal determination under the DGCL.

If any holder of Shares who demands appraisal under the DGCL fails to perfect, or effectively withdraws or loses his, her, or its rights to appraisal as provided under the DGCL, each Share held by such stockholder will be converted into the right to receive the Offer Price, without interest thereon and less any applicable withholding and transfer taxes. A stockholder may withdraw his, her or its demand for appraisal by delivering to Todd a written withdrawal of his, her or its demand for appraisal and acceptance of the Merger within 60 days after the effective time of the Merger (or thereafter with the consent of the surviving corporation).

If you sell your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares but rather will receive the Offer Price for such Shares.

The foregoing discussion is not a complete statement of law pertaining to appraisal rights under the DGCL and is qualified in its entirety by reference to the DGCL.

Plans for Todd. Pursuant to the terms of the Merger Agreement, promptly upon the purchase of and payment for any Shares by Purchaser pursuant to the Offer, Parent currently intends to request that Todd take all necessary action to enable Parent’s designees to be so elected or designated to the Todd Board, subject to the requirement in the Merger Agreement regarding compliance with applicable law and the rules of the NYSE. Purchaser currently intends, as soon as practicable after consummation of the Offer, to consummate the Merger.

Except as otherwise provided in this Offer to Purchase, it is expected that, initially following the Merger, the business and operations of Todd will, except as set forth in this Offer to Purchase, be continued substantially as they are currently being conducted. Parent does not expect to continue Todd’s regular dividend policy following the completion of the Merger. Parent will continue to evaluate the business and operations of Todd during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such actions as it deems appropriate under the circumstances then existing.

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Except as described above or elsewhere in this Offer to Purchase, Purchaser and Parent have no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving Todd or any of its subsidiaries (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of Todd or any of its subsidiaries, (iii) any change in the Todd Board or management of Todd, (iv) any material change in Todd’s capitalization or dividend policy, (v) any other material change in Todd’s corporate structure or business, (vi) a class of securities of Todd being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of Todd being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act.

13. Certain Effects of the Offer.

Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly, which could adversely affect the liquidity and market value of the remaining Shares held by stockholders other than Purchaser. Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to be greater or less than the Offer Price.

NYSE Listing. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued listing on NYSE. According to the published NYSE guidelines, NYSE would consider delisting the Shares if, among other things, the total number of holders of Shares is less than 400 or the total number of holders of Shares is less than 1,200 and the average monthly trading volume is less than 100,000 shares (for most recent 12 months) or the number of publicly-held shares is less than 600,000 or Todd’s average total global market capitalization over a consecutive 30 trading day period is less than $15 million. Shares held by officers or directors of Todd or their immediate families, or by any beneficial owner of 10% or more of the Shares, ordinarily will not be considered as being “publicly held” for this purpose. According to Todd, as of December 15, 2010, 5,787,231 Shares were issued and outstanding. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of NYSE for continued listing and the listing of the Shares is discontinued, the market for the Shares could be adversely affected.

If NYSE were to delist the Shares, it is possible that the Shares would continue to trade on another securities exchange or in the over-the-counter market and that price or other quotations would be reported by such exchange or other sources. The extent of the public market for such Shares and the availability of such quotations would depend, however, upon such factors as the number of stockholders and/or the aggregate market value of the publicly traded Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act as described below, and other factors. Purchaser can not predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price or marketability of the Shares or whether it would cause future market prices to be greater or less than the price of the Offer Price. Trading in the Shares will cease upon consummation of the Merger if trading has not ceased earlier as discussed above.

Exchange Act Registration. The Shares currently are registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be terminated by Todd upon application to the SEC if the outstanding Shares are not listed on a “national securities exchange” and if there are fewer than 300 holders of record of Shares.

We intend to seek to cause Todd to apply for termination of registration of the Shares as soon as possible after consummation of the Offer if the requirements for termination of registration are met. Termination of registration of the Shares under the Exchange Act would reduce the information required to be furnished by Todd to its stockholders and to the SEC and would make certain provisions of the Exchange Act (such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement or information

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statement in connection with stockholders’ meetings or actions in lieu of a stockholders’ meeting pursuant to Section 14(a) and 14(c) of the Exchange Act and the related requirement of furnishing an annual report to stockholders) no longer applicable with respect to the Shares. In addition, if the Shares are no longer registered under the Exchange Act, the requirements of Rule 13e-3 with respect to “going private” transactions would no longer be applicable to Todd. Furthermore, the ability of “affiliates” of Todd and persons holding “restricted securities” of Todd to dispose of such securities pursuant to Rule 144 under the United States Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act was terminated, the Shares would no longer be eligible for continued inclusion on the Federal Reserve Board’s list of “margin securities” or eligible for stock exchange listing.

If registration of the Shares is not terminated prior to the Merger, then the registration of the Shares under the Exchange Act will be terminated following completion of the Merger.

Margin Regulations. The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit using such Shares as collateral. Depending upon factors similar to those described above regarding listing and market quotations, following the Offer, the Shares may no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board, in which event the Shares would be ineligible as collateral for margin loans made by brokers.

14. Dividends and Distributions.

As discussed in Section 11 — “The Merger Agreement; Other Agreements,” the Merger Agreement provides that from the date of the Merger Agreement to the Effective Time, without the prior written approval of Parent, Todd will not, and will not allow its subsidiaries to, authorize or pay any dividends on or make any distribution with respect to the outstanding Shares other than the payment of the quarterly cash dividend declared by Todd on August 20, 2010 of $0.10 per Share and a dividend of $0.10 per Share contemplated to be declared in December 2010 to be paid after March 11, 2011 to stockholders of record as of a date after March 11, 2010.

15. Conditions of the Offer.

Notwithstanding any other provisions of the Offer, (i) Purchaser will not be required to accept for payment and Parent will not be required to cause Purchaser to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Purchaser’s obligation to promptly pay for or return tendered Shares after termination or withdrawal of the Offer), pay for any Shares tendered in the Offer and (ii) subject to the terms of the Merger Agreement, may delay the acceptance for payment of or the payment for any Shares tendered in the offer or terminate or amend the Offer if:

• the Minimum Tender Condition has not been satisfied;

• the Competition Law Condition has not been satisfied;

• the Financing Proceeds Condition has not been satisfied;

• the consummation of the Merger has been restrained, enjoined or prohibited by any law or any order of any government entity, the effect of which would (i) make illegal or materially delay consummation of the Merger, (ii) restrict the ownership or operation by Parent or any of its subsidiaries of any portion of its business, compel Parent to dispose of or hold separately any portion of their business, or impose any limitation, restriction or prohibition on the ability of Parent, Todd or any of their respective subsidiaries to conduct its business, (iii) impose limitations on the ability of Parent or any of its subsidiaries to exercise full rights of ownership in the Shares, or (iv) require divestiture by Parent or any of its subsidiaries of any of the Shares;

• there is existing or pending any claim, suit action or proceeding by any governmental entity seeking any of the consequences in the paragraph immediately above;

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• there has been a change, event or occurrence since the date of the Merger Agreement that has had or would reasonably be expected to have a Material Adverse Effect;

• any of the representations and warranties of Todd (i) relating to capital structure or authorization that are qualified as to materiality or Material Adverse Effect are not true and correct in all respects, and any representations and warranties that are not so qualified are not true and correct any material respect, in each case as of the date of the Merger Agreement and as of such time, except to the extent such representations and warranties relate to an earlier time (in which case on and as of such earlier time), or (ii) set forth in the Merger Agreement (other than those listed in the preceding clause) (i)) are not true and correct as of the Agreement Date and as of such time, except to the extent such representations and warranties relate to an earlier time (in which case on and as of such earlier time) except in the case of this clause (ii) to the extent that the facts or matters as to which such representations and warranties are not so true and correct (without giving effect to any qualifications and limitations as to “materiality” or “Material Adverse Effect” set forth therein), individually or in the aggregate, would not have a Material Adverse Effect;

• Todd has failed to perform or comply with, in any material respect, any obligation, agreement or covenant required to be performed by it or complied with under the Merger Agreement and such failure has not been cured to the good faith satisfaction of Parent;

• the Todd Board has withdrawn or modified in a manner adverse to Purchaser, the Recommendation or Parent has received a notice with respect to an Adverse Recommendation Change;

• if Parent or Purchaser will not own at least 90% of the Shares immediately after the completion of the Offer and, therefore, the exercise of the Top-Up is necessary to ensure that Parent or Purchaser owns at least 90% of the Shares immediately after the completion of the Offer, there exists under applicable law or other legal restraint any restriction or legal impediment on Purchaser’s ability and right to exercise the Top-Up, and the Shares issuable upon exercise of the Top-Up, together with any Shares held by Parent and Purchaser, (including Shares validly tendered in the Offer), constitute at least 90% of the outstanding Shares;

• immediately prior to the closing of the Offer (before giving effect to the Financing and the consummation of the Merger), Todd is not solvent;

• a Triggering Event has occurred;

• Frank Foti, the President, Chairman and Manager of Parent, who owns 98% of the equity interests of Parent and whose presence is critical to the successful completion of the Offer and the Merger, has not died or become disabled;

• Parent and Purchaser have failed to receive a certificate signed on behalf of Todd by its chief executive officer and chief financial officer dated as of the closing date of the Offer certifying that the conditions with respect to Material Adverse Effect, Todd’s representations and warranties and solvency have been met; or

• Todd and Parent have reached an agreement that the Offer or the Merger Agreement be terminated or the Merger Agreement has been terminated in accordance with its terms.

For purposes of determining whether the Minimum Tender Condition has been satisfied and the determination as to whether the Top-Up can be exercised, as described above, Parent and Purchaser have the right to include or exclude for purposes of their determination Shares tendered in the Offer pursuant to the guaranteed delivery procedures.

The conditions described above are in addition to, and not a limitation of, the rights and obligations of Parent and Purchaser to extend, terminate or modify the Offer pursuant to the terms and conditions of the Merger Agreement.

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The conditions described above are for the sole benefit of Parent and Purchaser and, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC, may be waived by Parent and Purchaser in whole or in part at any time and from time to time in their sole discretion (other than the Minimum Tender Condition and the Competition Law Condition). The failure by Parent or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right will be deemed an ongoing right that may be asserted at any time and from time to time.

16. Certain Legal Matters; Regulatory Approvals.

General

Except as described in this Section 16, Purchaser is not aware of any pending legal proceeding relating to the Offer. Except as described in this Section 16, based on its examination of publicly available information filed by Todd with the SEC and other publicly available information concerning Todd, Purchaser is not aware of any governmental license or regulatory permit that appears to be material to Todd’s business that might be adversely affected by Purchaser’s acquisition of Shares as contemplated in this Offer to Purchase or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by Purchaser or Parent as contemplated in this Offer to Purchase. Should any such approval or other action be required, Purchaser currently contemplates that, except as described below under “State Takeover Statutes,” such approval or other action will be sought. While Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Todd’s business, or certain parts of Todd’s business might not have to be disposed of, any of which could cause Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 — “Conditions of the Offer.”

Litigation

On December 27, 2010, a class action complaint was filed by a purported stockholder of Todd in the Superior Court of King County, Washington, captioned Cheryl Marshall v. Todd Shipyards Corporation, et. al., Case No. 10-2-45027-1, in connection with the Merger Agreement, the Offer and the Merger. The complaint names as defendants Todd, each of the directors and executive officers of Todd (the “Individual Defendants”), Woodbourne Partners, L.P., Parent and Purchaser. The complaint alleges, among other things, that the Individual Defendants have breached their fiduciary duties to Todd’s stockholders, including the duties of good faith and loyalty and due care and that Parent, Purchaser and Woodbourne Partners, L.P. aided and abetted the Individual Defendants’ alleged breaches of their fiduciary duties. The complaint includes, among others, allegations that (i) the consideration to be received by the holders of Shares is unfair, inadequate and less than the “intrinsic value” of the Shares, (ii) the provisions of the Merger Agreement unfairly protect the transactions proposed between Todd and Parent, including through a grossly excessive termination fee and inadequate go-shop period, (iii) the Top-Up is coercive, and (iv) the Individual Defendants did not seek competitive bids prior to entering into the Merger Agreement. Plaintiffs seek, among other relief, injunctive relief preventing the defendants from consummating the Offer and the Merger, compensatory damages and attorneys’ fees and expenses. The defendants have not yet responded to the complaint. Parent and Purchaser believe that the complaint is without merit and intend to vigorously defend the complaint.

State Takeover Statutes

Delaware, where Todd is incorporated, and Washington, where Todd operates, have adopted takeover laws and regulations which may be applicable to the Merger.

Section 203 of the DGCL (“Section 203”) restricts an “interested stockholder” (including a person who has the right to acquire 15% or more of the corporation’s outstanding voting stock) from engaging in a “business

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combination” (defined to include mergers and certain other actions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder.

Chapter 23B.19 of the Washington Business Corporation Act (the “WBCA”) prevents an “acquiring person” (defined generally as a person with 10% or more of a corporation’s outstanding voting stock) of a Washington corporation from engaging in a “significant business transaction” (defined as a variety of transactions, including mergers) with such corporation for a period of five years following the date such person became an acquiring person unless (i) certain conditions specified in Chapter 23B.19 of the WBCA are met or (ii) before such person became an acquiring person, the board of directors of the corporation approved the transaction. The Todd Board approved for purposes of Chapter 23B.19 of the WBCA the Merger Agreement, the Stockholder Tender Agreement, the Offer, the Merger and the other transactions contemplated thereby and has taken all appropriate action so that Chapter 23B.19 of the WBCA, with respect to Todd, will not be applicable to Parent and Purchaser by virtue of such actions.

Purchaser is not aware of any other state takeover laws or regulations that are applicable to the Offer or the Merger and has not attempted to comply with any state takeover laws or regulations. If any government official or third party should seek to apply any such state takeover law to the Offer or the Merger or other business combination between Purchaser or any of its affiliates and Todd, Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, Purchaser may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 — “Conditions of the Offer.”

Antitrust Compliance

Parent and Todd each filed a Premerger Notification and Report Form with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) relating to the proposed acquisition of Todd on December 23, 2010.

Under the provisions of the HSR Act, applicable to the Offer, the acquisition of Shares pursuant to the Offer may be consummated following the expiration of a 15-day waiting period following the filing by Parent of its Premerger Notification and Report Form with respect to the Offer, unless Parent or Todd receives a request for additional information or documentary material from the Antitrust Division or the FTC or unless early termination of the waiting period is granted. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC requests additional information or documentary material concerning the Offer, the waiting period will be extended through the tenth day after the date of substantial compliance by Parent. Complying with a request for additional information or documentary material may take a significant amount of time.

At any time before or after Parent’s acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, or seeking the divestiture of Shares acquired by Parent or the divestiture of substantial assets of Todd or its subsidiaries or Parent or its subsidiaries. State attorneys general may also bring legal action under both state and federal antitrust laws, as applicable. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, the result of such challenge.

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17. Fees and Expenses.

We have retained the Depositary and the Information Agent in connection with the Offer. Each of the Depositary and the Information Agent will receive customary compensation, reimbursement for reasonable out-of-pocket expenses, and indemnification against certain liabilities in connection with the Offer, including liabilities under the United States federal securities laws.

As part of the services included in such retention, the Information Agent may contact holders of Shares by personal interview, mail, electronic mail, telephone, and other methods of electronic communication and may request brokers, dealers, and other nominees to forward the Offer materials to beneficial holders of Shares.

Except as set forth above, we will not pay any fees or commissions to any broker, dealer, commercial banks, trust companies, or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will upon request be reimbursed by us for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers.

18. Miscellaneous

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction.

No person has been authorized to give any information or to make any representation on behalf of Parent or Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized.

Purchaser has filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC in the manner set forth under Section 7 — “Certain Information Concerning Todd.”

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SCHEDULE I

INFORMATION RELATING TO PARENT AND PURCHASER

1. Parent. The following table sets forth the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each manager and officer of Parent. Unless otherwise indicated, the current business address of each person is 5555 N. Channel Ave., Portland, OR 97217 and the current telephone number is (800) 505-1930. Unless otherwise indicated, each such person is a citizen of the United States of America.

Name and Address	Present Principal Occupation or Employment; Material Positions Held during Past Five Years
Frank J. Foti	Manager, President and Chairman of the Board since August 2000. Also see response for Purchaser.
Bruce A. Dummer	Manager, Chief Financial Officer and Secretary since August 2000. Also see response for Purchaser.
Robert J. Baker	Manager since December 2010. Mr. Baker has served as a consultant for Venture Resources International Inc. for the past 36 years. Mr. Baker also sits on the board of directors of Global Cooling Inc., R.C. Tway Company, Lakeshore Cryotronics Inc., SCCI Engineered Materials Inc. and Triad Technologies Inc. Also see response for Purchaser.
David R. Whitcomb	Chief Operating Officer since July 2008. Mr. Whitcomb served as Vice President, Production Support from July 2006 through June 2008 and as Project Manager from August 2001 through June 2006. Also see response for Purchaser.

2. Purchaser. The following table sets forth the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and officer of Purchaser. Unless otherwise indicated, the current business address of each person is 5555 N. Channel Ave., Portland, OR 97217 and the current telephone number is (800) 505-1930. Unless otherwise indicated, each such person is a citizen of the United States of America.

Name and Address	Present Principal Occupation or Employment; Material Positions Held during Past Five Years
Frank J. Foti	Director, President, and Chairman of the Board of Purchaser since December 21, 2010. Also see response for Parent.
Bruce A. Dummer	Director and Chief Financial Officer of Purchaser since December 21, 2010. Also see response for Parent.
Robert J. Baker	Director of Purchaser since December 21, 2010. Also see response for Parent.
David R. Whitcomb	Chief Operating Officer since December 21, 2010. Also see response for Parent.

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The Letter of Transmittal, Share certificates and any other required documents should be sent by each stockholder of Todd or such stockholder’s broker, dealer, other nominee to the Depositary as follows:

The Depositary for the Offer is:

American Stock Transfer & Trust Company

By Mail:	By Hand or Courier:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York 10272	American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219

Other Information:

Questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed Delivery may be directed to the Information Agent at its location and telephone numbers set forth below. Stockholders may also contact their broker, dealer, or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Phoenix Advisory Partners

110 Wall Street, 27th Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 493-3910

All Others Call Toll-Free: (800) 576-4314

Email: information@phoenixadvisorypartners.com

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EX-99.(A)(1)(B)

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

To Tender Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at $22.27 Net Per Share in Cash Pursuant to the Offer to Purchase dated December 30, 2010 by

NAUTICAL MILES, INC.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

The undersigned represents that I (we) have full authority to surrender without restriction the certificate(s) listed below. You are hereby authorized and instructed to deliver to the address indicated below (unless otherwise instructed in the boxes in the following page) a check representing a cash payment for shares of common stock, par value $0.01 per share, of Todd Shipyards Corporation (“Todd”) (collectively, the “Shares”) tendered pursuant to this Letter of Transmittal, at a price of $22.27 per share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase” and, together with this Letter of Transmittal, collectively with any amendments and supplements hereto, the “Offer”).

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON

JANUARY 28, 2011, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

Method of delivery of the certificate(s) is at the option and risk of the owner thereof. See Instruction 2.

Mail or deliver this Letter of Transmittal together with the certificate(s) representing your shares, to:

By Mail:   American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York 10272-2042 By Hand or Courier:   American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15^th Avenue Brooklyn, New York 11219

For assistance call (877) 248-6417 or (718) 921-8317

Pursuant to the offer of Nautical Miles, Inc. (“Purchaser”) to purchase all outstanding Shares of Todd, the undersigned encloses herewith and surrenders the following certificate(s) representing Shares of Todd:

DESCRIPTION OF SHARES SURRENDERED
Name(s) and Address(es) of Registered Owner(s) (If blank, please fill in exactly as name(s) appear(s) on share certificate(s))	Shares Surrendered (attached additional list if necessary)
	Certificated Shares**
	Certificate Number(s)*	Total Number of Shares Represented by Certificate(s)*	Number of Shares Surrendered**	Book Entry Shares Surrendered
	Total Shares
*    Need not be completed by book-entry stockholders. **    Unless otherwise indicated, it will be assumed that all shares of common stock represented by certificates described above are being surrendered hereby.

PLEASE READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.

IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER OFFERING DOCUMENTS, YOU SHOULD CONTACT THE INFORMATION AGENT, PHOENIX ADVISORY PARTNERS AT (800) 576-4314.

You have received this Letter of Transmittal in connection with the offer of Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), to purchase all outstanding shares of common stock, par value $0.01 per share, of Todd Shipyards Corporation, a Delaware corporation (“Todd”) (collectively, the “Shares”), at a price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, as described in the Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase” and, together with this Letter of Transmittal, collectively with any amendments and supplements hereto, the “Offer”).

You should use this Letter of Transmittal to deliver to American Stock Transfer & Trust Company (the “Depositary”) Shares represented by stock certificates, or held in book-entry form on the books of Todd, for tender. If you are delivering your Shares by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company (“DTC”), you must use an Agent’s Message (as defined in Instruction 2 below). In this Letter of Transmittal, stockholders who deliver certificates representing their Shares are referred to as “Certificate Stockholders,” and stockholders who deliver their Shares through book-entry transfer are referred to as “Book-Entry Stockholders.”

If certificates for your Shares are not immediately available or you cannot deliver your certificates and all other required documents to the Depositary prior to the Expiration Date or you cannot complete the book-entry transfer procedures prior to the Expiration Date, you may nevertheless tender your Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2 below. Delivery of documents to DTC will not constitute delivery to the Depositary.

¨ CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

Name of Tendering

Institution:

DTC Participant

Number:

Transaction Code

Number:

¨ CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):

Name(s) of Registered Owner(s):

Window Ticket Number (if any) or DTC Participant

Number:

Date of Execution of Notice of Guaranteed

Delivery:

Name of Institution which Guaranteed

Delivery:

NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

The undersigned hereby tenders to Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), the above-described shares of common stock, par value $0.01 per share, of Todd Shipyards Corporation, a Delaware corporation (“Todd”) (the “Shares”), at a price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, on the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and this Letter of Transmittal (collectively with any amendments and supplements hereto, this “Letter of Transmittal” and, together with the Offer to Purchase, collectively with any amendments and supplements thereto, the “Offer”). The undersigned understands that Purchaser reserves the right to transfer or assign, from time to time, in whole or in part, to one or more of its affiliates, the right to purchase the Shares tendered herewith.

On the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), subject to, and effective upon, acceptance for payment and payment for the Shares validly tendered herewith, and not properly withdrawn, prior to the Expiration Date (as defined in the Offer to Purchase), if one is provided, in which case the Shares, the Letter of Transmittal and other documents must be accepted for payment and payment validly tendered, and not properly withdrawn, prior to the Expiration Date in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser, all right, title and interest in and to all of the Shares being tendered hereby and any and all cash dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such Shares on or after December 30, 2010 (collectively, “Distributions”). In addition, the undersigned hereby irrevocably appoints American Stock Transfer & Trust Company (the “Depositary”) the true and lawful agent and attorney-in-fact and proxy of the undersigned with respect to such Shares and any Distributions with full power of substitution (such proxies and power of attorney being deemed to be an irrevocable power coupled with an interest in the tendered shares) to the full extent of such stockholder’s rights with respect to such Shares and any Distributions (a) to deliver certificates representing Shares (the “Share Certificates”) and any Distributions, or transfer of ownership of such Shares and any Distributions on the account books maintained by DTC, together, in either such case, with all accompanying evidence of transfer and authenticity, to or upon the order of Purchaser, (b) to present such Shares and any Distributions for transfer on the books of Todd, and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and any Distributions, all in accordance with the terms and subject to the conditions of the Offer.

The undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to the full extent of such stockholder’s rights with respect to the Shares tendered hereby which have been accepted for payment and with respect to any Distributions. The designees of Purchaser will, with respect to the Shares and any associated Distributions for which the appointment is effective, be empowered to exercise all voting and any other rights of such stockholder, as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of Todd’s stockholders, by written consent in lieu of any such meeting or otherwise. This proxy and power of attorney shall be irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser accepts the Shares tendered with this Letter of Transmittal for payment pursuant to the Offer. Upon the effectiveness of such appointment, without further action, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares and any associated Distributions will be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights, to the extent permitted under applicable law, with respect to such Shares and any associated Distributions, including voting at any meeting of stockholders or executing a written consent concerning any matter.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares and any Distributions tendered hereby and, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Share Certificate(s) have been endorsed to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares and any Distributions tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of any such Distributions and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser in its sole discretion.

It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until the Share Certificate(s) owned by the undersigned are received by the Depositary at the address set forth above, together with such additional documents as the Depositary may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary.

IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF THE SHARES, THE SHARE CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS (INCLUDING DELIVERY THROUGH DTC) IS AT THE OPTION AND RISK OF THE UNDERSIGNED AND THAT THE RISK OF LOSS OF SUCH SHARES, SHARE CERTIFICATE(S) AND OTHER DOCUMENTS SHALL PASS ONLY AFTER THE DEPOSITARY HAS ACTUALLY RECEIVED THE SHARES OR SHARE CERTIFICATE(S) (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED BELOW)). IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that the acceptance for payment by Purchaser of Shares tendered pursuant to one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer.

Unless otherwise indicated herein under “Special Payment Instructions,” please issue the check for the purchase price in the name(s) of, and/or return any Share Certificates representing Shares not tendered or accepted for payment to, the registered owner(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price and/or return any Share Certificates representing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered owner(s) appearing under “Description of Shares Tendered.” In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or issue any Share Certificates representing Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such Share Certificates (and any accompanying documents, as appropriate) to, the person or persons so indicated. Unless otherwise indicated herein in the box

titled “Special Payment Instructions,” please credit any Shares tendered hereby or by an Agent’s Message and delivered by book-entry transfer, but which are not purchased, by crediting the account at DTC designated above. The undersigned recognizes that Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered owner thereof if Purchaser does not accept for payment any of the Shares so tendered.

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, 5, 6 and 7)   To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price in consideration of Shares accepted for payment are to be issued in the name of someone other than the undersigned or if Shares tendered by book-entry transfer which are not accepted for payment are to be returned by credit to an account maintained at DTC other than that designated above.   Issue:   ¨  Check and/or               ¨  Share Certificates to:   Name:                                                                                               (Please Print)   Address:                                                                                               (Include Zip Code)   (Tax Identification or Social Security Number)   ¨       Credit Shares tendered by book-entry transfer that are not accepted for payment to the DTC account set forth below.   (DTC Account Number) SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 5, 6 and 7)   To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled “Description of Shares Tendered” above.   Deliver:   ¨  Check(s) and/or                   ¨  Share Certificates to:   Name:                                                                                               (Please Print)   Address:                                                                                               (Include Zip Code)

IMPORTANT—SIGN HERE

(U.S. Holders Please Also Complete the Enclosed IRS Form W-9)

(Non-U.S. Holders Please Obtain and Complete IRS Form W-8BEN or Other Applicable IRS Form W-8)

(Signature(s) of Stockholder(s))

Dated:                     , 20    

(Must be signed by registered owner(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered owner(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.)

Name(s):                                                                                                                                                                                                

(Please Print)

Capacity (full title):                                                                                                                                                                            

Address:                                                                                                                                                                                                  

(Include Zip Code)

Area Code and Telephone Number:                                                                                                                                            

Tax Identification or

Social Security No.:                                                                                                                                                                           

GUARANTEE OF SIGNATURE(S)

(For use by Eligible Institutions only;

see Instructions 1 and 5)

Name of Firm:                                                                                                                                                                                     

(Include Zip Code)

Authorized Signature:                                                                                                                                                                       

Name:                                                                                                                                                                                                      

(Please Type or Print)

Area Code and Telephone Number:                                                                                                                                            

Dated:                     , 20    

Place medallion guarantee in space below:

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this document, includes any participant in any of DTC’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith and such registered owner has not completed the box titled “Special Payment Instructions” or the box titled “Special Delivery Instructions” on this Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5.

2. Delivery of Letter of Transmittal and Certificates or Book-Entry Confirmations. This Letter of Transmittal is to be completed by stockholders if Share Certificates are to be forwarded herewith. If tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase, an Agent’s Message must be utilized. Share Certificates representing all physically tendered Shares, or confirmation of any book-entry transfer into the Depositary’s account at DTC of Shares tendered by book-entry transfer (“Book Entry Confirmation”), as well as this Letter of Transmittal properly completed and duly executed with any required signature guarantees, or an Agent’s Message in the case of a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein prior to the Expiration Date (as defined in the Offer to Purchase). Please do not send your Share Certificates directly to Purchaser, Parent, or Todd.

Stockholders whose Share Certificates are not immediately available or who cannot deliver all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedures for book-entry transfer prior to the Expiration Date may nevertheless tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by Purchaser must be received by the Depositary prior to the Expiration Date, and (c) Share Certificates representing all tendered Shares, in proper form for transfer (or a Book Entry Confirmation with respect to such Shares), this Letter of Transmittal, properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and all other documents required by this Letter of Transmittal, if any, must be received by the Depositary within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery.

A properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery of Share Certificates to the Depositary.

The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against such participant. The term “Agent’s Message” also includes any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositary’s office. For Shares to be validly tendered during any subsequent offering period in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended, the tendering stockholder must comply with the foregoing procedures, except that the required documents and certificates must be received before the expiration of any subsequent offering period and no guaranteed delivery procedure will be available during any subsequent offering period.

THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE AND RISK OF LOSS OF THE SHARE CERTIFICATES SHALL PASS ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION ). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal, waive any right to receive any notice of the acceptance of their Shares for payment.

All questions as to validity, form and eligibility (including time of receipt) of the surrender of any Share Certificate hereunder, including questions as to the proper completion or execution of any Letter of Transmittal, Notice of Guaranteed Delivery or other required documents and as to the proper form for transfer of any certificate of Shares, will be determined by Purchaser in its sole and absolute discretion (which may delegate power in whole or in part to the Depositary) which determination will be final and binding. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the surrender of any Shares or Share Certificate(s) whether or not similar defects or irregularities are waived in the case of any other stockholder. A surrender will not be deemed to have been validly made until all defects and irregularities have been cured or waived. Purchaser and the Depositary shall make reasonable efforts to notify any person of any defect in any Letter of Transmittal submitted to the Depositary.

3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed.

4. Partial Tenders (Applicable to Certificate Stockholders Only). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the column titled “Number of Shares Tendered” in the box titled “Description of Shares Tendered.” In such cases, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) but not tendered will be sent to the registered owner, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered owner(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration or any other change whatsoever.

If any Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If any tendered Shares are registered in the names of different holder(s), it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares.

If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to Purchaser of their authority so to act must be submitted.

If this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to, or Share Certificates representing Shares not tendered or accepted for payment are to be issued in the name of, a person other than the registered owner(s), in which case the Share Certificates representing the Shares tendered by this Letter of Transmittal must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered owner(s) or holder(s) appear(s) on the Share Certificates. Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Share(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the Share Certificate(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.

6. Transfer Taxes. Purchaser will pay any transfer taxes with respect to the transfer and sale of Shares to it or to its order pursuant to the Offer (for the avoidance of doubt, transfer taxes do not include United States federal income or backup withholding taxes). If, however, payment of the purchase price is to be made to, or (in the circumstances permitted hereby) if Share Certificates not tendered or accepted for payment are to be registered in the name of, any person other than the registered owner(s), or if tendered Share Certificates are registered in the name of any person other than the person signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered owner(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates listed in this Letter of Transmittal.

7. Special Payment and Delivery Instructions. If a check for the purchase price is to be issued, and/or Share Certificates representing Shares not tendered or accepted for payment are to be issued or returned to, a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown in the box titled “Description of Shares Tendered” above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders delivering Shares tendered hereby or by Agent’s Message by book-entry transfer may request that Shares not purchased be credited to an account maintained at DTC as such stockholder may designate in the box titled “Special Payment Instructions” herein. If no such instructions are given, all such Shares not purchased will be returned by crediting the same account at DTC as the account from which such Shares were delivered.

8. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser’s expense.

9. Backup Withholding. Under U.S. federal income tax laws, the Depositary will be required to withhold a portion of the amount of any payments made to certain stockholders pursuant to the Offer or the Merger, as applicable. In order to avoid such backup withholding, each tendering stockholder or payee that is a United States person (for U.S. federal income tax purposes), must provide the Depositary with such stockholder’s or payee’s correct taxpayer identification number (“TIN”) and certify that such stockholder or payee is not subject to such backup withholding by completing the attached Form W-9. Certain stockholders or payees (including, among others, corporations, non-resident foreign individuals and foreign entities) are not subject to these backup withholding and reporting requirements. A tendering stockholder who is a foreign individual or a foreign entity should complete, sign, and submit to the Depositary the appropriate Form W-8. A Form W-8BEN may be obtained from the Depositary or downloaded from the Internal Revenue Service’s website at the following

address: http://www.irs.gov. Failure to complete the Form W-9 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold a portion of the amount of any payments made of the Offer Price pursuant to the Offer.

NOTE: FAILURE TO COMPLETE AND RETURN THE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE “IMPORTANT TAX INFORMATION” SECTION BELOW.

10. Lost, Destroyed, Mutilated or Stolen Share Certificates. If any Share Certificate has been lost, destroyed, mutilated or stolen, the stockholder should promptly notify Todd’s stock transfer agent, BNY Mellon at (800) 874-2089. The stockholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen Share Certificates have been followed.

11. Waiver of Conditions. Subject to the terms and conditions of the Merger Agreement (as defined in the Offer to Purchase) and the applicable rules and regulations of the Securities and Exchange Commission, the conditions of the Offer may be waived by Purchaser in whole or in part at any time and from time to time in its sole discretion.

IMPORTANT: THIS LETTER OF TRANSMITTAL OR AN AGENT’S MESSAGE, TOGETHER WITH SHARE CERTIFICATE(S) OR BOOK-ENTRY CONFIRMATION OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.

IMPORTANT TAX INFORMATION

Under United States federal income tax law, a stockholder that is a non-exempt United States person (for U.S. federal income tax purposes) whose tendered Shares are accepted for payment, or whose Shares are converted in the Merger, is required by law to provide the Depositary (as payer) with such stockholder’s correct TIN on Form W-9 below. If such stockholder is an individual, the TIN is such stockholder’s social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to penalties imposed by the Internal Revenue Service (“IRS”) and payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer, or converted in the Merger, may be subject to backup withholding.

If backup withholding applies, the Depositary is required to withhold 28% of any payments of the purchase price made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may be obtained from the IRS provided that the required information is furnished to the IRS.

Form W-9

To prevent backup withholding on payments that are made to a United States stockholder with respect to Shares purchased pursuant to the Offer or converted in the Merger, as applicable, the stockholder is required to notify the Depositary of such stockholder’s correct TIN by completing Form W-9 certifying, under penalties of perjury, (i) that the TIN provided on Form W-9 is correct (or that such stockholder is awaiting a TIN), (ii) that such stockholder is not subject to backup withholding because (a) such stockholder has not been notified by the IRS that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends, (b) the IRS has notified such stockholder that such stockholder is no longer subject to backup withholding or (c) such stockholder is exempt from backup withholding, and (iii) that such stockholder is a U.S. person.

What Number to Give the Depositary

Each United States stockholder is generally required to give the Depositary its social security number or employer identification number. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should write “Applied For” in Part I, sign and date the Form W-9. Notwithstanding that “Applied For” is written in Part I, the Depositary will withhold 28% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. Such amounts will be refunded to such surrendering stockholder if a TIN is provided to the Depositary within 60 days. We note that your Form W-9, including your TIN, may be transferred from the Depositary to the Paying Agent, in certain circumstances.

Please consult your accountant or tax advisor for further guidance regarding the completion of IRS Form W-9, IRS Form W-8BEN, or another version of IRS Form W-8 to claim exemption from backup withholding, or contact the Depositary.

PAYER’S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service	Part 1—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW				Social Security Number OR Employer Identification Number
	Part 2—FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See Page 2 of enclosed Guidelines)
Payer’s Request for Taxpayer Identification Number (TIN) and Certification	Part 3—Certification Under Penalties of Perjury, I certify that: (1)    The number shown on this form is my current taxpayer identification number (or I am waiting for a number to be issued to me), (2)    I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding and (3)    I am a U.S. person (including a U.S. resident alien).				Part 4— Awaiting TIN ¨
	Certification instructions—You must cross out item (2) in Part 3 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding you receive another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2).
	SIGNATURE			DATE
	NAME
	ADDRESS
	CITY	STATE	ZIP CODE

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU

CHECK THE BOX IN PART 4 OF SUBSTITUTE FORM W-9

PAYER’S NAME: American Stock Transfer & Trust Company, LLC CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify, under penalties of perjury, that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number before payment is made, a portion of such reportable payment will be withheld.

Signature

Date

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENT MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

IMPORTANT TAX INFORMATION

Under current U.S. federal income tax law, a Stockholder who tenders Todd stock certificates that are accepted for exchange may be subject to backup withholding. In order to avoid such backup withholding, the Stockholder must provide the Exchange Agent with such Stockholder’s correct taxpayer identification number and certify that such Stockholder is not subject to such backup withholding by completing the Substitute Form W-9 provided herewith. In general, if a Stockholder is an individual, the taxpayer identification number is the Social Security number of such individual. If the Exchange Agent is not provided with the correct taxpayer identification number, the Stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if the Todd stock certificates are held in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

Certain Stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order to satisfy the Exchange Agent that a foreign individual qualifies as an exempt recipient, such Stockholder must submit a statement, signed under penalties of perjury, attesting to that individual’s exempt status, on a properly completed Form W-8BEN, or successor form. Such statements can be obtained from the Exchange Agent.

Failure to complete the Substitute Form W-9 will not, by itself, cause the Todd stock certificates to be deemed invalidly tendered, but may require the Exchange Agent to withhold a portion of the amount of any payments made pursuant to the merger. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is furnished to the Internal Revenue Service.

NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Payer—Social Security Numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer Identification Numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.

For this type of account:		Give the SOCIAL SECURITY number of—	For this type of account:		Give the EMPLOYER IDENTIFICATION number of—
1.	An individual’s account	The individual	8.	Sole proprietorship account	The owner(4)
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)	9.	A valid trust, estate or pension trust	The legal entity(5)
3.	Husband and wife (joint account)	The actual owner of the account or, if joint funds, the first individual on the account(1)	10.	Corporate account	The corporation
4.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)	11.	Religious, charitable, or educational organization account	The organization
5.	Adult and minor (joint account)	The adult or, if the minor is the only contributor, the minor(1)	12.	Partnership account held in the name of the business	The partnership
6.	Account in the name of guardian or committee for a designated ward, minor, or incompetent person	The ward, minor, or incompetent person(3)	13.	Association, club, or other tax-exempt organization	The organization
7.	a.The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)	14.	A broker or registered nominee	The broker or nominee
	b.So-called trust account that is not a legal or valid trust under state law	The actual owner(1)	15.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) Circle the ward’s, minor’s or incompetent person’s name and furnish such person’s social security number.

(4) You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or employer identification number (if you have one).

(5) List first and circle the name of the legal trust, estate, or pension trust. Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.

Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 2

Obtaining a Number

If you do not have a taxpayer identification number or if you do not know your number, obtain Form SS-5, Application for Social Security Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the “IRS”) and apply for a number. Section references in these guidelines refer to sections under the Internal Revenue Code of 1986, as amended.

Payees specifically exempted from backup withholding include:

— An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

— The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing.

— An international organization or any agency or instrumentality thereof.

— A foreign government or any political subdivision, agency or instrumentality thereof.

Payees that may be exempt from backup withholding include:

— A corporation.

— A financial institution.

— A dealer in securities or commodities required to register in the United States, the District of Colombia, or a possession of the United States.

— A real estate investment trust.

— A common trust fund operated by a bank under Section 584(a).

— An entity registered at all times during the tax year under the Investment Company Act of 1940, as amended.

— A middleman known in the investment community as a nominee or custodian.

— A futures commission merchant registered with the Commodity Futures Trading Commission.

— A foreign central bank of issue.

— A trust exempt from tax under Section 664 or described in Section 4947.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

— Payments to nonresident aliens subject to withholding under Section 1441.

— Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner.

— Payments of patronage dividends where the amount received is not paid in money.

— Payments made by certain foreign organizations.

— Section 404(k) payments made by an ESOP.

Payments of interest not generally subject to backup withholding include the following:

— Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct taxpayer identification number to the payer.

— Payments of tax-exempt interest (including exempt-interest dividends under Section 852).

— Payments described in Section 6049(b)(5) to nonresident aliens.

— Payments on tax-free covenant bonds under Section 1451.

— Payments made by certain foreign organizations.

— Mortgage or student loan interest paid to you.

Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” IN PART 2 OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Certain payments other than interest, dividends, and patronage dividends, which are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Sections 6041,6041A, 6045, 6050A and 6050N.

Privacy Act Notice.—Section 6109 requires most recipients of dividend, interest, or certain other income to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. The IRS may also provide this information to the Department of Justice for civil and criminal litigation and to cities, states and the District of Columbia to carry out their tax laws. The IRS may also disclose this information to other countries under a tax treaty, or to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold a portion of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 3

(2) Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information.—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

(4) Misuse of Taxpayer Identification Numbers.—If the requester discloses or uses taxpayer identification numbers in violation of federal law, the requester may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.

The Depositary for the Offer to Purchase is:

By mail:	By Hand or Courier:
American Stock Transfer & Trust Company Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York 10272-2042	American Stock Transfer & Trust Company Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219

For assistance call (877) 248-6417 or (718) 921-8317

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.

Any questions or requests for assistance and requests for additional copies of the Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its telephone numbers and location listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Phoenix Advisory Partners

110 Wall Street

27th Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 493-3910

All Others Call Toll-Free: (800) 576-4314

Email: information@phoenixadvisorypartners.com

EX-99.(A)(1)(C)

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

For Tender of Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at

$22.27 NET PER SHARE

Pursuant to the Offer to Purchase dated December 30, 2010

by

NAUTICAL MILES, INC.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 28, 2011, UNLESS THE TENDER OFFER IS EXTENDED OR EARLIER TERMINATED.

This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates representing shares of common stock, par value $0.01 per share, of Todd Shipyards Corporation, a Delaware corporation, are not immediately available, (ii) the procedure for book-entry transfer cannot be completed prior to the expiration of the Offer or (iii) time will not permit all required documents to reach American Stock Transfer & Trust Company, LLC (the “Depositary”) prior to the expiration of the Offer. This Notice of Guaranteed Delivery may be delivered by registered or certified mail, facsimile transmission or overnight courier to the Depositary. See Section 3 of the Offer to Purchase (as defined below).

The Depositary for the Offer is:

American Stock Transfer & Trust Company

By Mail:	By Facsimile Transmission:	By Hand or Courier:
American Stock Transfer & Trust Company	American Stock Transfer & Trust Company	American Stock Transfer & Trust Company
Operations Center		Operations Center
Attn: Reorganization Department	Facsimile (718) 234-5001	Attn: Reorganization Department
P.O. Box 2042		6201 15th Avenue
New York, New York 10272-2042		Brooklyn, New York 11219

For assistance call (877) 248-6417 or (718) 921-8317

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED BELOW) UNDER THE INSTRUCTIONS TO THE LETTER OF TRANSMITTAL, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal (as defined below) or an Agent’s Message (as defined below) and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Ladies and Gentlemen:

The undersigned hereby tender(s) to Nautical Miles, Inc., a Delaware corporation and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company, upon the terms and subject to the conditions set forth in the offer to purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”), receipt of which is hereby acknowledged, the number of shares of common stock, par value $0.01 per share (“Shares”), of Todd Shipyards Corporation, a Delaware corporation, specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

Number of Shares and Certificate No(s)

(if available)

¨                Check here if Shares will be tendered by book entry transfer.

Name of Tendering Institution:

DTC Account Number:

Dated:

Name Record Holders:

(please type or print)

Address(es):

(Zip Code)

Area Code and Tel. No.:

(Daytime telephone number)

Signature(s):

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, an Eligible Institution (as defined in Section 3 of the Offer to Purchase), hereby (i) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended and (ii) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates representing the Shares tendered hereby, in proper form for transfer, or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at DTC (pursuant to the procedures set forth in Section 3 of the Offer to Purchase), in either case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or, in the case of a book-entry transfer, an Agent’s Message (defined in Section 3 of the Offer to Purchase), together with any other documents required by the Letter of Transmittal, all within three (3) New York Stock Exchange trading days after the date of the execution of this Notice of Guaranteed Delivery.

Name of Firm:

Address:

(Zip Code)

Area Code and Tel. No.: 

(Authorized Signature)

Name: 

(Please type or print)

Title: 

Date: 

NOTE: DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE. CERTIFICATES REPRESENTING TENDERED SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

EX-99.(A)(1)(D)

Exhibit (a)(1)(D)

Offer To Purchase For Cash

All Outstanding Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at

$22.27 NET PER SHARE

Pursuant to the Offer to Purchase dated December 30, 2010

by

NAUTICAL MILES, INC.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 28, 2011, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

December 30, 2010

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been engaged by Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), to act as Information Agent in connection with Purchaser’s offer to purchase all of the outstanding shares of common stock, par value $0.01 per share (the “Shares”) of Todd Shipyards Corporation, a Delaware corporation (“Todd”), at a purchase price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.

For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

1. The Offer to Purchase;

2. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients, together with the included Internal Revenue Service Form W-9;

3. A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to American Stock Transfer & Trust Company, LLC (the “Depositary”) by the expiration date of the Offer or if the procedure for book-entry transfer cannot be completed by the expiration date of the Offer;

4. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer;

5. A letter to stockholders of Todd from the Chief Executive Officer of Todd, accompanied by Todd’s Solicitation/Recommendation Statement on Schedule 14D-9; and

6. A return envelope addressed to the Depositary for your use only.

Certain conditions to the Offer are described in Section 15 of the Offer to Purchase.

We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at midnight, New York City time, on January 28, 2011, unless the Offer is extended or earlier terminated.

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of December 22, 2010 (the “Merger Agreement”), by and among Parent, Purchaser and Todd. The Merger Agreement provides that, among other things, subject to certain conditions Purchaser will be merged with and into Todd (the “Merger”), with Todd continuing as the Surviving Corporation in the Merger and a wholly owned subsidiary of Parent. The Merger Agreement is more fully described in the Offer to Purchase.

After careful consideration, the board of directors of Todd by a unanimous vote of the disinterested directors (i) determined that the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and all of the transactions contemplated by the Merger Agreement and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer and, to the extent required by law, approve the Merger and the Merger Agreement.

For Shares to be properly tendered pursuant to the Offer, (a) the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an “Agent’s Message” (as defined in Section 3 of the Offer to Purchase) in the case of book-entry transfer, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and the Letter of Transmittal.

Neither Purchaser nor Parent will pay any fees or commissions to any broker or dealer or other person (other than the Depositary and the Information Agent as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent at the addresses and telephone numbers set forth below.

Very truly yours,

Phoenix Advisory Partners

Nothing contained herein or in the enclosed documents shall render you the agent of Purchaser, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.

The Information Agent for the Offer is:

Phoenix Advisory Partners

110 Wall Street

27th Floor

New York, NY 10005

(800) 576-4314

2

EX-99.(A)(1)(E)

Exhibit (a)(1)(E)

Offer To Purchase For Cash

All Outstanding Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at

$22.27 NET PER SHARE

Pursuant to the Offer to Purchase dated December 30, 2010

by

NAUTICAL MILES, INC.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 28, 2011, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

December 30, 2010

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) in connection with the offer by Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), to purchase all outstanding shares of common stock, par value $0.01 per share (the “Shares”), of Todd Shipyards Corporation, a Delaware corporation (“Todd”), at a purchase price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions of the Offer.

We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.

Please note carefully the following:

1. The offer price for the Offer is $22.27 per Share, net to you in cash, without interest and less any applicable withholding and transfer taxes.

2. The Offer is being made for all outstanding Shares.

3. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of December 22, 2010 (collectively with any amendments and supplements thereto, the “Merger Agreement”), among Parent, Purchaser and Todd, pursuant to which, after the completion of the Offer, Purchaser will be merged with and into Todd (the “Merger”), on the terms and subject to the conditions set forth in the Merger Agreement, with Todd surviving the Merger as a direct or indirect wholly-owned subsidiary of Parent.

4. After careful consideration, the board of directors of Todd by a unanimous vote of the disinterested directors (i) determined that the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and all of the

transactions contemplated by the Merger Agreement and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer and, to the extent required by law, approve the Merger and the Merger Agreement.

5. The Offer and withdrawal rights will expire at midnight, New York City time, on January 28, 2011, unless the Offer is extended by Purchaser or earlier terminated.

6. The Offer is subject to certain conditions described in Section 15 of the Offer to Purchase.

7. Any transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise provided in the Letter of Transmittal.

If you wish to have us tender any or all of your Shares, then please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, then all such Shares will be tendered unless otherwise specified on the Instruction Form.

Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf before the expiration of the Offer.

The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.

2

INSTRUCTION FORM

With Respect to the Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

TODD SHIPYARDS CORPORATION

at

$22.27 NET PER SHARE

Pursuant to the Offer to Purchase dated December 30, 2010

by

NAUTICAL MILES, Inc.,

a wholly-owned subsidiary of

VIGOR INDUSTRIAL LLC

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”), in connection with the offer by Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company, to purchase all outstanding shares of common stock, par value $0.01 per share (the “Shares”), of Todd Shipyards Corporation, a Delaware corporation, at a purchase price of $22.27 per Share, net to the seller in cash, without interest and less any applicable withholding and transfer taxes, upon the terms and subject to the conditions of the Offer.

The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The undersigned understands and acknowledges that all questions as to validity, form and eligibility of the surrender of any certificate representing Shares submitted on my behalf will be determined by Purchaser and such determination shall be final and binding.

ACCOUNT NUMBER:                                                                                                                                                                             

NUMBER OF SHARES BEING TENDERED HEREBY:              SHARES*

The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

* Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

Dated                      , 20    

(Signature(s))

(Please Print Name(s))

Address 

Include Zip Code

Area Code and Telephone No. 

Taxpayer Identification or Social Security No. 

EX-99.(A)(1)(F)

Exhibit (a)(1)(F)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated December 30, 2010, and the related Letter of Transmittal and any amendments and supplements thereto. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. Purchaser (as defined below) may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in such jurisdiction. In those jurisdictions where applicable laws require that the Offer be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

Notice of Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Todd Shipyards Corporation

at

$22.27 Net Per Share

by

Nautical Miles, Inc.,

a wholly-owned subsidiary of

Vigor Industrial LLC

Nautical Miles, Inc., a Delaware corporation (“Purchaser”) and wholly-owned subsidiary of Vigor Industrial LLC, an Oregon limited liability company (“Parent”), is offering to purchase all outstanding shares of common stock, par value $0.01 per share (“Shares”), of Todd Shipyards Corporation, a Delaware corporation (“Todd”), at a price of $22.27 per Share (the “Offer Price”), net to the seller in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 30, 2010 (collectively with any amendments and supplements thereto, the “Offer to Purchase”), and in the related Letter of Transmittal (collectively with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). Tendering stockholders who have Shares registered in their names and who tender directly to American Stock Transfer & Trust Company (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker, bank or other nominee should consult with such institution as to whether it charges any service fees or commissions.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 28, 2011, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”) OR EARLIER TERMINATED.

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of December 22, 2010, by and among Parent, Purchaser and Todd (collectively with any amendments and supplements thereto, the “Merger Agreement”), pursuant to which, after in certain cases completion of the Offer and in any event the satisfaction or waiver of certain conditions, Purchaser will merge with and into Todd (the “Merger”), with Todd continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of Parent. In the Merger, and each issued and outstanding Share (other than Shares owned by Parent, Purchaser or Todd, or by any stockholder of Todd who is entitled to and properly exercises appraisal rights under Delaware law) will, by virtue of the Merger and without any action on the part of the holder thereof, be canceled and converted into the right to receive an amount in cash equal to the Offer Price, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase. As a result of the Merger, Todd will cease to be a publicly traded company. The Merger Agreement is more fully described in the Offer to Purchase.

        The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement, including, among other things, (i) that the number of Shares that have been validly tendered and not properly withdrawn before the Expiration Date, together with any Shares then owned by Parent and its subsidiaries and the number of Shares that may be validly issued as Top-Up Shares (as defined below), equals at least 90% of the Shares outstanding as of the Expiration Date on a fully diluted basis (the “Minimum Tender Condition”); (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other applicable federal, state or foreign laws regulating competition and the receipt of any required approval from a governmental entity that is necessary for the consummation of the transactions contemplated by the Merger Agreement; (iii) the receipt by Parent or Merger Sub (either directly or through their subsidiaries) of proceeds under (a) a Debt Commitment Letter from GE Capital Markets, Inc., General Electric Capital Corporation and KeyBank National Association and (b) a Mezzanine Debt Commitment Letter from Endeavour Structured Equity and Mezzanine Fund I, LP (together, the “Financing Proceeds Condition”); (iv) the absence of any law, judgment, or injunction in effect that could reasonably be expected to directly or indirectly have certain effects on the transactions contemplated by the Merger Agreement or Parent, Todd or any of their respective subsidiaries; (v) that since December 22, 2010, there has not occurred any change, event or occurrence that, individual or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect (as defined in the Offer to Purchase); (vi) that the board of directors of Todd has not withdrawn or changed its recommendation that holders of Shares tender their shares in the Offer and, if necessary, vote their Shares in favor of the adoption of the Merger Agreement to approve the Merger; (vii) that if the exercise of the Top-Up (as defined below) is necessary to ensure that Parent and Purchaser collectively own at least 90% of the Shares immediately after the completion of the Offer, there does not exist under applicable law or other legal restraint any restriction or legal impediment on Purchaser’s ability and right to exercise the Top-Up, and the Shares issuable upon exercise of the Top-Up, together with any Shares held by Parent and Purchaser (including Shares validly tendered in the Offer), constitute at least 90% of the outstanding Shares; (viii) that as of immediately prior to the closing of the purchase of the Shares, Todd is solvent, (ix) that a Triggering Event (as defined in the Offer to Purchase) has not occurred and remains continuing, (x) that Todd and Parent have not reached an agreement that the Offer or the Merger Agreement be terminated, and (xi) that Frank Foti, the President and Chief Executive Officer of Parent, has not died or become disabled. The Offer is also subject to other conditions described in the Offer to Purchase.

After careful consideration, the board of directors of Todd by a unanimous vote of the disinterested directors (i) determined that the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Todd and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and all of the transactions contemplated by the Merger Agreement and (iii) recommended that the stockholders of Todd tender their Shares pursuant to the Offer and, to the extent required by law, approve the Merger and the Merger Agreement.

Todd has granted to Purchaser an irrevocable right (the “Top-Up”), which Purchaser will exercise immediately following consummation of the Offer, if necessary, to purchase from Todd the number of Shares (the “Top-Up Shares”) that, when added to the Shares already owned by Parent or any of its subsidiaries following consummation of the Offer, constitutes one Share more than 90% of the then outstanding Shares. If Parent, Purchaser and any of their respective affiliates acquire more than 90% of the outstanding Shares, including through exercise of the Top-Up, each of Parent, Purchaser and Todd will, subject to the satisfaction or waiver of the conditions to the Merger, take all necessary and appropriate action to cause the Merger to become effective, as soon as practicable after consummation of the Offer, as a short-form merger under Section 253 of the General Corporation Law of the State of Delaware without action of the stockholders of Todd.

Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”), Purchaser may waive any or all of the conditions to its obligation to purchase Shares pursuant to the Offer (other than the Minimum Tender Condition, which may only be waived with the prior written consent of Todd). Todd may elect to extend the No-Shop Period Start Date (as defined in the Offer to Purchase) for up to 14 days, which will extend the Original Expiration Date (as defined in the Offer to Purchase) for an equal period of time. If at any Expiration Date (as defined in the Merger Agreement) (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent will extend the Offer for up to ten business days (the number of days to be mutually agreed by Parent and Todd) and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days. If, after the application of the extension provisions just described, at any Expiration Date (i) any condition of the Offer other than the Financing Proceeds Condition is not satisfied or waived, Parent must extend the Offer in consecutive increments of up to five business days (or such longer period as Parent and Todd agree) provided that if the Proxy Statement Clearance Date (as defined below) has occurred on or prior to February 11, 2011, then no such extension is required, but at Parent’s or Todd’s election, the Offer will be extended in increments of up to five business days (or such longer period as Parent and Todd agree) each until the Proxy Statement Clearance Date, and (ii) the only condition of the Offer not satisfied is the Financing Proceeds Condition, then Parent may elect to extend the Offer for one and only one extension of less than five business days, but only to the extent Parent has not exercised a similar extension right described in the second bullet above. Parent must extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the Offer, but is not required to extend the offer under this provision beyond February 11, 2011.

“Proxy Statement Clearance Date” means the date on which the SEC has, orally or in writing, confirmed that it has no further comments on the proxy statement to be filed by Todd related to the adoption of the Merger Agreement by Todd stockholders, including the first date following the tenth calendar day following the filing of the preliminary proxy statement if the SEC has not informed Todd that it intends to review the proxy statement. In no event will Purchaser be required to extend the Offer beyond March 11, 2011.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration of the Offer.

On the terms of and subject to the conditions to the Offer and the Merger Agreement, Purchaser will, and Parent will cause Purchaser to, accept and pay for, all Shares validly tendered and not validly withdrawn pursuant to the Offer that Purchaser becomes obligated to purchase pursuant to the Offer as soon as practicable after the prior to the Expiration Date of the Offer. For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, Purchaser will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid on the consideration paid for Shares pursuant to the Offer, regardless of any extension of the Offer or any delay in payment for Shares.

In all cases, Purchaser will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the “Share Certificates”) or confirmation (a “Book-Entry Confirmation”) of a book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (which we refer to as the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal.

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn at any time after February 28, 2011, which is the 60th day after the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer. For a withdrawal of Shares to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this announcement. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in the Offer to Purchase at any time prior to the Expiration Date.

Purchaser will determine, in its sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal and its determination will be final and binding. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

Todd has provided to Purchaser its list of stockholders and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Todd’ stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

The receipt by a holder of Shares of cash in exchange for its Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. In general, a holder of Shares will recognize gain or loss equal to the difference between (i) the amount of cash received pursuant to the Offer or the Merger and (ii) its adjusted tax basis in the Shares exchanged therefor. For a more detailed description of certain United States federal income tax consequences of the Offer and the Merger, see the Offer to Purchase. Each holder of Shares should consult its tax advisor about the particular tax consequences to such holder of exchanging Shares in the Offer or the Merger.

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934 is contained in the Offer to Purchase and is incorporated herein by reference.

The Offer to Purchase and the related Letter of Transmittal contain important information and both documents should be read carefully and in their entirety before any decision is made with respect to the Offer.

        Questions and requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal may be directed to the Information Agent. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer. Such copies will be furnished promptly at Purchaser’s expense. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent or the Depositary) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

110 Wall Street, 27th floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 493-3910

All Others Call Toll Free: (800) 576-4314

email: info@phoenixadvisorypartners.com

The Depositary for the Offer is:

By Registered or Certified Mail:	By Facsimile Transmission:	By Overnight Courier:
American Stock Transfer	American Stock Transfer	American Stock Transfer
& Trust Company, LLC	& Trust Company, LLC	& Trust Company, LLC
Operations Center	Facsimile: (718) 234-5001	Operations Center
Attention: Reorganization Department	For assistance call (877) 248-6417	Attention: Reorganization Department
P.O. Box 2042	or (718) 921-8317	6201 15th Avenue
New York, New York 10272-2042		Brooklyn, New York 11219

December 30, 2010

EX-99.(A)(1)(G)

Exhibit (a)(1)(G)

TODD SHIPYARDS CORPORATION TO BE ACQUIRED BY

VIGOR INDUSTRIAL LLC

Shareholders to Receive $22.27 in Cash Per Share

SEATTLE AND PORTLAND – December 23, 2010 – TODD SHIPYARDS CORPORATION (NYSE: TOD) (“Todd”) and Vigor Industrial LLC (“Vigor”) today announced that they have entered into a definitive agreement under which Vigor will acquire the stock of Todd for $22.27 per share, or approximately $130 million. The transaction is structured as an all cash tender offer.

Under the terms of the agreement, which has been unanimously approved by Todd’s board of directors, Vigor will offer to purchase all outstanding shares of Todd’s common stock for $22.27 in cash per share. This represents a premium of 31% over the average closing price of Todd’s common stock during the three month period ended December 21, 2010. The price of Todd’s stock has climbed steadily during the year from a low of $13.98 to its recent 52 week high closing price of $20.75. The tender offer is scheduled to commence no later than December 30, 2010 and will expire on January 28, 2011 unless extended. The transaction is expected to close in the first quarter of 2011.

“We are pleased about the addition of Todd to the Vigor family,” said Frank Foti, the President of Vigor. “Todd is Puget Sound’s leading shipyard and the combination of Vigor and Todd will create the largest and most capable marine services company in the Pacific Northwest. This transaction will be good for the customers and employees of both companies and will broaden our capabilities. The combination of resources and capabilities will allow the combined companies to expand both the scope and capacity of their ship repair and new construction business.”

“This transaction is a testament to the excellent work Todd has done to revitalize our business. Not only is this transaction good for our stockholders, but it’s good for the shipyard and our employees,” said Stephen G. Welch, President and Chief Executive Officer of Todd. “We believe that the addition of Todd’s products to Vigor will help create a stronger, more diversified company with long-term advantages for both companies’ customers and employees.”

Todd’s management will remain intact and all contracts will remain in place. The acquisition will allow for stable utilization of facilities while continuing to strengthen the combined companies’ industry presence and opportunities for growth.

Todd’s directors and officers and certain other stockholders who own an aggregate of approximately 15.3 percent of Todd’s outstanding stock have entered into agreements pursuant to which they have agreed to tender their shares in the tender offer and to vote their shares in favor of a merger if a vote is required by law.

Vigor has obtained financing commitments to purchase all outstanding shares and refinance existing indebtedness. Under the terms of the agreement, the transaction is conditioned upon, among other things, satisfaction of the minimum tender condition of approximately 67 percent of Todd’s common shares, the expiration of all applicable waiting periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, and other customary closing conditions. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval.

Under the terms of the agreement, Todd may solicit superior proposals from third parties through January 28, 2011, subject to extension at Todd’s option as provided in the agreement. It is not anticipated that any developments will be disclosed with regard to this process unless Todd’s Board of Directors makes a decision with respect to a potential superior proposal. There is no guaranty that this process will result in a superior proposal.

K&L Gates LLP is acting as legal advisor to Vigor. Greensfelder, Hemker & Gale, P.C. is acting as Todd’s legal advisor. Houlihan Lokey Financial Advisors, Inc. acted as financial advisor to Todd’s Transaction Committee.

Contacts for More information

For Todd	For Vigor
Media Inquiries
Mr. Ashley Bach	Alan Sprott
Pacific Public Affairs	Vigor Industrial LLC
(206) 682-5066	(503) 703-0875

Investors

Michael G. Marsh

General Counsel

(206) 623-1635, x 501

About Todd Shipyards Corporation

Todd, through its subsidiaries, performs a substantial amount of repair and maintenance work on commercial and federal government vessels and provides new construction and industrial fabrication services for a wide variety of customers. Its customers include the U.S. Navy, the U.S. Coast Guard, the Washington State Ferry system, NOAA, the Alaska Marine Highway System, and various other commercial and governmental customers. Todd has operated a shipyard in Seattle, Washington since 1916 and also operates a shipyard and facilities in Everett and Bremerton, Washington.

About Vigor Industrial LLC

Vigor Industrial LLC, an Oregon limited liability company, through its subsidiaries operates businesses providing ship repair and conversion, barge building, industrial coating, machining, industrial real estate, and fabrication services. Vigor Industrial performs ship repair work through Vigor Marine LLC and Cascade General, located at the Portland Shipyard in Portland, Oregon, Washington Marine Repair, located at Port Angeles, Washington, and Vigor Marine Tacoma, located in the Port of Tacoma, Washington. The company also performs ship repair work at locations in San Diego, California, Everett, Washington and Bremerton, Washington. US Barge LLC, a wholly owned Vigor Industrial subsidiary, constructs barges at the Portland Shipyard.

Forward Looking Statements:

Statements in this release that relate to future results and events are forward-looking statements based on Todd’s and Vigor’s current expectations, respectively. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected benefits and costs of the transaction; management plans relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction; any statements of the plans, strategies and objectives of management for future operations, including the execution of integration plans; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits may not materialize as expected; that the transaction may not be timely completed, if at all; that, prior to the completion of the transaction, Todd’s business may experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities and other risks that are described in Todd’s Securities and Exchange Commission reports, including but not limited to the risks described in Todd’s Annual Report on Form 10-K for its fiscal year ended March 28, 2010. Todd assumes no obligation and does not intend to update these forward-looking statements.

Important Information about the Tender Offer

The tender offer for the outstanding common stock of Todd referred to in this report has not yet commenced. This press release is neither an offer to purchase nor a solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of Todd common stock will be made pursuant to an offer to purchase and related materials that Vigor intends to file with the Securities and Exchange Commission. At the time the offer is commenced, Vigor will file a tender offer statement on Schedule TO with the Securities and Exchange Commission, and thereafter Todd will file a

solicitation/recommendation statement on Schedule 14D-9 with respect to the offer. The parties intend to make such filings on December 30, 2010. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials will be sent free of charge to all stockholders of Todd when available. In addition, all of these materials (and all other materials filed by Todd with the Securities and Exchange Commission) will be available at no charge from the Securities and Exchange Commission through its website at www.sec.gov. Free copies of the offer to purchase, the related letter of transmittal and certain other offering documents will be made available by Phoenix Advisory Partners, the information agent for the tender offer, by calling (800) 576-4314. Investors and security holders may also obtain free copies of the documents filed with the Securities and Exchange Commission by Todd by contacting Michael Marsh, Secretary of Todd, telephone number (206) 442-8501.

Additional Information about the Merger and Where to Find It

In connection with the potential one-step merger, Todd would file a proxy statement with the Securities and Exchange Commission. Additionally, Todd would file other relevant materials with the Securities and Exchange Commission in connection with the proposed acquisition of Todd by Vigor pursuant to the terms of the agreement. The materials to be filed by Todd with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. Investors and stockholders also will be able to obtain free copies of the proxy statement from Todd by contacting Hilary Pickerel with Todd Investor Relations, telephone number (206) 623-1635, ext. 106. Investors and security holders of Todd are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger because they will contain important information about the merger and the parties to the merger.

The Company and its respective directors, executive officers and other members of their management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of Todd stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of Todd’s executive officers and directors in the solicitation by reading Todd’s proxy statement for its 2010 annual meeting of stockholders, the Annual Report on Form 10-K for the fiscal year ended March 28, 2010, and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of Todd’s participants in the solicitation, which may, in some cases, be different than those of Todd’s stockholders generally, will be set forth in the proxy statement relating to the merger when it becomes available. Additional information regarding Todd’s directors and executive officers is also included in Todd’s proxy statement for its 2010 annual meeting of stockholders and is included in the Annual Report on Form 10-K for the fiscal year ended March 28, 2010.

EX-99.(B)(1)

Exhibit (b)(1)

KEYBANK NATIONAL ASSOCIATION 127 PUBLIC SQUARE CLEVELAND, OHIO 44114 GENERAL ELECTRIC CAPITAL CORPORATION AND GE CAPITAL MARKETS, INC. 201 MERRITT 7 NORWALK, CONNECTICUT 06851

CONFIDENTIAL

December 21, 2010

Vigor Industrial LLC

5555 N. Channel Ave.

Portland OR 97217

Attn: Frank Foti, Chief Executive Officer

          Bruce Dummer, SVP

Commitment Letter - Senior Credit Facilities

Gentlemen:

Vigor Industrial LLC, an Oregon limited liability company (the “Company” or “you”) has advised KeyBank National Association (“KeyBank”) and General Electric Capital Corporation (“GECC” and together with KeyBank, the “Commitment Parties”) that you intend to form a corporation that will in turn form a new merger subsidiary (“Merger Sub”) that will acquire (the “Acquisition”) all of the capital stock of [Target Co], a Delaware corporation (the “Target”). The Acquisition will be effected through Merger Sub making a cash tender offer (the “Tender Offer”) to purchase all of the outstanding shares of common stock of the Target, and a subsequent merger of Merger Sub into the Target, with the Target being the surviving corporation. The Company, the Target and the direct and indirect subsidiaries of the Company and the Target are sometimes collectively referred to herein as the “Companies”. This letter and the summary of terms and conditions attached as Exhibit A hereto and incorporated herein by this reference (the “Term Sheet”) and all annexes, schedules and exhibits attached hereto or thereto are sometimes collectively referred to herein as this “Commitment Letter”. This Commitment Letter replaces in its entirety the Engagement Letter, dated as of October 20, 2010, among the Company, GECC, GE Capital Markets, Inc. (“GECM”) and KeyBank (the “Engagement Letter”), and all obligations under the Engagement Letter are hereby terminated, except such indemnity, expense reimbursement, confidentiality, disclosure, governing law, venue and jurisdictional consent, and jury trial waiver provisions therein that expressly survive the termination thereof.

You have also advised KeyBank and GECC that you intend to finance the Acquisition, including the Tender Offer, the refinancing of certain existing debt of the Companies (the “Refinancing”), costs and expenses related to the Transactions (as hereinafter defined) and the ongoing working capital and other general corporate purposes (including potential future acquisitions to the extent permitted under the Loan Documents described below) of the Company and its subsidiaries after consummation of the Acquisition from the following sources (and that no financing other than the financing described herein will be required in connection with the Transactions):

Vigor Industrial LLC

December 21, 2010

2

(a) up to $145 million in senior secured credit facilities (the “Credit Facilities”), comprised of (i) a term loan facility of up to $120 million (the “Term Loan Facility”), and (ii) a revolving credit facility of up to $25 million (the “Revolving Credit Facility”); and

(b) $17 million of subordinated unsecured notes (the “Subordinated Notes”) having terms and conditions, including subordination terms, acceptable to the Commitment Parties.

The Acquisition, including the Tender Offer, the Refinancing, the entering into and funding of the Credit Facilities, the issuance of the Subordinated Notes, and all other related transactions are hereinafter collectively referred to as the “Transactions.”

In connection with the foregoing, the Commitment Parties are pleased to advise you of their aggregate commitment to provide $145million in principal amount of the Credit Facilities, comprised of (i) KeyBank’s several commitment to provide $72.5 million in principal amount of the Credit Facilities (“KeyBank’s Commitment”) and to act as the administrative agent and collateral agent for the Credit Facilities (in such capacity, the “Agent”), and (ii) GECC’s several commitment to provide $72.5 million in principal amount of the Credit Facilities (“GECC’s Commitment”) and to act as co-administrative agent for the Credit Facilities (in such capacity, the “Co-Agent” and together with the Agent, the “Agents”) (it being expressly understood that KeyBank shall have no obligation with respect to GECC’s Commitment and GECC shall have no obligation with respect to KeyBank’s Commitment), in each case, all upon and subject to the terms and conditions set forth in this Commitment Letter and the Fee Letter described below. Further, KeyBank and GECM shall act as co-lead arrangers for the Credit Facilities (in such capacities, the “Co-Lead Arrangers”), GECM shall act as bookrunner for the Credit Facilities (the “Bookrunner”), and KeyBank shall act as co-bookrunner for the Credit Facilities, in each case, all upon and subject to the terms and conditions set forth in this Commitment Letter and the Fee Letter. GECM shall have the left-placement status on all information and marketing materials, and the responsibility generally associated with such left-placement status, in respect of the arrangement and syndication of the Credit Facilities, and KeyBank shall have the right-placement status on the same, both all upon and subject to the general terms and conditions set forth in this Commitment Letter. The Co-Lead Arrangers will form, in consultation with you, a syndicate of financial institutions and institutional lenders (including KeyBank and GECC or an affiliate thereof) reasonably acceptable to the Agents for the Credit Facilities (the “Lenders”), upon and subject to the terms and conditions set forth in this Commitment Letter and the Fee Letter. The syndication of all or a portion of the Commitment Parties’ commitments under this Commitment Letter and/or its loans and commitments under the Credit Facilities is hereinafter referred to as the “Syndication.” All capitalized terms used and not otherwise defined herein shall have the same meanings as specified therefor in the Term Sheet and all capitalized terms used and not otherwise defined in the Term Sheet shall have the same meanings as specified therefor herein.

The commitments and undertakings of each of KeyBank, GECC and GECM hereunder are subject to the satisfaction of the conditions precedent set forth in Annex I to the Term Sheet and each of the following conditions precedent in a manner acceptable to the Commitment Parties: (a) your execution of the fee letter of even date herewith among you and the Commitment Parties (the “Fee Letter”) and the payment when due of the fees specified therein that are payable at the closing of the Credit Facilities, as well as any supplemental arrangement fees payable to any Lender at such closing (b) the accuracy and completeness in all material respects of all representations that you and your affiliates make to the Commitment Parties and the Co-Lead Arrangers and your compliance with the terms of this Commitment Letter (including the Term Sheet) and the Fee Letter, (c) the negotiation, execution and delivery of definitive credit agreements and related documentation for the Credit Facilities consistent with this

Vigor Industrial LLC

December 21, 2010

3

Commitment Letter in form and substance reasonably satisfactory to the Co-Lead Arrangers (collectively, the “Loan Documents”), (d) completion of all documentation relating to the Acquisition (including the Tender Offer) and in form and substance reasonably satisfactory to the Co-Lead Arrangers (it being understood that the drafts of such agreements and documents provided to the Co-Lead Arrangers as of the date hereof are acceptable to the Co-Lead Arrangers), (e) the Co-Lead Arrangers having been afforded a reasonable period of time following the general launch of the Syndication and prior to the date of closing of the Credit Facilities to complete the Syndication, and (f) the absence of any competing (as determined by the Co-Lead Arrangers) offering, placement or arrangement of any debt securities or bank financing by or on behalf of any of the Companies prior to and during the Syndication other than the issuance of the Subordinated Notes.

Notwithstanding anything to the contrary in this Commitment Letter, the Fee Letter, the Loan Documents, or any other letter agreement or other undertaking concerning the financing of the transactions contemplated hereby, (a) the only representations relating to the Borrowers and their respective subsidiaries, the accuracy of which shall be a condition to the availability of the Credit Facilities on the Closing Date, shall be (i) such of the representations made by the Target or the Company in the Merger Agreement as are material to the interests of the Lenders (including, without limitation, a representation with respect to the absence of any material adverse changes with respect to the Target and its subsidiaries), but only to the extent that you have (or an affiliate of yours has) the right to terminate your obligations under the Merger Agreement or decline to consummate the Acquisition as a result of a breach of such representations in the Merger Agreement and (ii) the Specified Representations (as defined below), and (b) the terms of the Loan Documents shall be in a form such that they do not impair availability of the Credit Facilities on the Closing Date if the conditions set forth in this Commitment Letter are satisfied (it being understood that, to the extent any collateral referred to in the Term Sheet is not or cannot be provided or perfected on the Closing Date after your use of commercially reasonable efforts to do so (other than the grant and perfection of security interests in assets located in any state of the United States or the District of Columbia with respect to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code or a short-form security agreement with the United States Copyright Office or the United States Patent and Trademark Office or, in the case of stock certificates and intercompany notes, by possession of such collateral), then the provision or perfection, as the case may be, of any such collateral shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date, but may instead be provided or perfected, as the case may be, after the Closing Date pursuant to arrangements to be mutually agreed). For purposes hereof, “Specified Representations” means the representations and warranties referred to in the Term Sheet relating to corporate existence, power and authorization (as to the execution, delivery and performance of the Loan Documents), due authorization, execution and delivery and enforceability of the Loan Documents, validity, priority (subject to permitted liens) and perfection of security interests in the Collateral (subject to the limitations set forth in the preceding sentence), solvency of the Borrowers and their subsidiaries on a consolidated basis, no material conflicts with laws, charter documents, and other material agreements, no material third party or governmental consents, filings or approvals, compliance with the PATRIOT Act, margin regulations and the Investment Company Act. This paragraph, and the provisions herein, shall be referred to as the “Closing Condition Provision”.

You acknowledge and agree that the Syndication is an integral part of this transaction for the Commitment Parties. GECM, in its capacity as Bookrunner, has commenced, and will continue syndication efforts for the Credit Facilities. You agree to, and to use commercially reasonable efforts to cause the Target to, actively assist and cooperate with the Co-Lead Arrangers in connection with the Syndication. Such assistance shall include, without limitation, (a) promptly preparing and providing to the Co-Lead Arrangers all information reasonably requested by them with respect to you, the Target and

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your and the Target’s respective subsidiaries, the Transactions and the other transactions contemplated hereby, including financial information and projections (the “Projections”) (collectively, together with the Projections, the “Information”) and copies of due diligence, accounting or similar reports or memoranda prepared at your direction by legal, accounting, tax, environmental or other advisors in connection with the Transactions (in each case subject to non-disclosure and reliance letters reasonably acceptable to the Co-Lead Arrangers), in each case, as the Co-Lead Arrangers may reasonably request in connection with the Syndication, (b) participating in meetings with prospective Lenders and other relevant meetings (including meetings with rating agencies if necessary), (c) providing direct contact during the Syndication between your and Target’s senior management, representatives and advisors, on the one hand, and prospective Lenders, on the other hand, and (d) using your commercially reasonable efforts to ensure that GECM’s syndication efforts benefit from Borrower’s existing financial and banking relationships.

At GECM’s request, you agree to assist in the preparation of confidential information memoranda, presentations and other Evaluation Materials (as defined below) regarding the Company and its affiliates, the Credit Facilities, the Target and its subsidiaries and the Transactions to be used in connection with the Syndication and to confirm, prior to such materials being made available to prospective Lenders, the completeness and accuracy of such materials. The Information, the Projections and all other information provided by or on behalf of you, the Target and your and the Target’s respective affiliates to the Co-Lead Arrangers, the Commitment Parties and/or the Lenders regarding you, Target and your and Target’s respective affiliates, the Transactions and the other transactions contemplated hereby in connection with the Credit Facilities are collectively referred to as the “Evaluation Material”.

Until the completion of the Syndication (as determined by the Co-Lead Arrangers in their discretion), you shall not (and you shall cause your subsidiaries and Target and its subsidiaries not to), without the prior written consent of the Co-Lead Arrangers, offer, issue, place, syndicate or arrange any debt or preferred equity securities or debt facilities (including any renewals, restatements, restructuring or refinancings of any existing debt or preferred equity securities or debt facilities), attempt or agree to do any of the foregoing, announce or authorize the announcement of any of the foregoing, or engage in discussion concerning any of the foregoing other than with respect to the Subordinated Notes that is contemplated as part of the Transactions.

The Bookrunner will manage all aspects of the Syndication, including selection of Lenders, determination of when the Co-Lead Arrangers will approach potential Lenders, any naming rights and the final allocations of the commitments among the Lenders, in each case in consultation with you. In connection with the Syndication, the Co-Lead Arrangers may elect to appoint certain Lenders to agency positions such as syndication agent, documentation agent or other co-agents, in each case at no additional cost to you besides the compensation expressly set forth in the Fee Letter. You agree that (a) no Lender participating in the Credit Facilities will receive compensation from you in order to obtain its commitment, except on the terms contained in this Commitment Letter and the Fee Letter, and the amount and distribution of the fees among the Lenders will be at the sole and absolute discretion of the Co-Lead Arrangers, and (b) no other agents, co-agents or arrangers will be appointed with respect to the Credit Facilities, and no other titles will be awarded to any such parties in connection with the Credit Facilities, unless the Co-Lead Arrangers agree in writing. Any assignments of any Commitment Party’s commitment under this Commitment Letter or its loans and commitments under the Credit Facilities entered into to complete the Syndication shall not be subject to the consent, minimum amounts and fee provisions set forth in the assignment provisions of either this Commitment Letter or the Loan Documents.

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You hereby represent and covenant that (a) all Information, taken as a whole and other than Projections, that has been or will be made available to the Co-Lead Arrangers by you or any of your representatives (or on your or their behalf) or by the Companies or any of their subsidiaries or representatives (or on their behalf) in connection with any aspect of the Transactions, is or will be, when furnished complete and correct in all material respects, and such Information does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made, and (b) all Projections concerning the Companies that have been or are hereafter made available to the Co-Lead Arrangers or the Lenders by you or any of your representatives (or on your or their behalf) or by the Companies or any of their representatives (or on their behalf) having been prepared or hereafter being prepared, as the case may be, in good faith based upon assumptions reasonably believed to be reasonable when made (it being understood that projections are inherently uncertain and that actual results may be materially different). You understand that, in arranging and syndicating the Credit Facilities, the Co-Lead Arrangers may use and rely on the Information and Projections without independent verification thereof. You agree to, and agree to cause the Companies to, and agree to use commercially reasonable efforts to cause the Target and its subsidiaries to, supplement the Information and Projections from time to time until the date of the initial borrowing under the Credit Facilities (the “Closing Date”) and, if requested by us, for a reasonable time thereafter so that the representations and covenants in this paragraph remain true and correct in all material respects on the Closing Date and on such later date on which the Syndication is completed as if the Information were being furnished, and such representation and warranty were being made, on such date.

You acknowledge that (a) the Co-Lead Arrangers, on your behalf will make available Evaluation Materials to the proposed syndicate of Lenders by posting the Evaluation Materials on Intralinks or another similar electronic system and (b) certain prospective Lenders (such Lenders, “Public Lenders”; all other Lenders, “Private Lenders”) may have personnel that do not wish to receive material non-public information (within the meaning of the United States federal securities laws, “MNPI”) with respect to the Companies, their respective affiliates or any other entity, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such entities’ securities. If requested, you will assist us in preparing an additional version of the Evaluation Materials not containing MNPI (the “Public Evaluation Materials”) to be distributed to prospective Public Lenders.

Before distribution of any Evaluation Materials (a) to prospective Private Lenders, you shall provide us with a customary letter authorizing the dissemination of the Evaluation Materials and (b) to prospective Public Lenders, you shall provide us with a customary letter authorizing the dissemination of the Public Evaluation Materials and confirming the absence of MNPI therefrom. In addition, at our request, you shall identify Public Evaluation Materials by clearly and conspicuously marking the same as “PUBLIC”.

You agree that the Co-Lead Arrangers on your behalf may distribute the following documents to all prospective Lenders, unless you advise the Co-Lead Arrangers in writing (including by email) within a reasonable time prior to their intended distributions that such material should only be distributed to prospective Private Lenders: (a) administrative materials for prospective Lenders such as lender meeting invitations and funding and closing memoranda, (b) notifications of changes to the Credit Facilities’ terms and (c) other materials intended for prospective Lenders after the initial distribution of the Evaluation

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6

Materials, including drafts and final versions of definitive documents with respect to the Credit Facilities. If you advise us that any of the foregoing items should be distributed only to Private Lenders, then the Co-Lead Arrangers will not distribute such materials to Public Lenders without further discussions with you. You agree (whether or not any Evaluation Materials are marked “PUBLIC”) that Evaluation Materials made available to prospective Public Lenders in accordance with this Commitment Letter shall not contain MNPI.

As consideration for the commitment and undertakings of the Commitment Parties hereunder, you will pay to the Commitment Parties when due the fees set forth in the Fee Letter. The terms of the Fee Letter are an integral part of the commitment and undertaking of the Commitment Parties hereunder and compliance by you with the terms thereof is an express condition to the obligations of the Commitment Parties under this Commitment Letter. Each of the fees described in the Fee Letter shall be fully earned and nonrefundable when paid.

By accepting delivery of this Commitment Letter, you agree that before you have executed and returned to the Commitment Parties this Commitment Letter, neither this Commitment Letter nor the Fee Letter, nor any of the terms and conditions set forth or referred to herein or therein, shall under any circumstances be disclosed by you, any of the Companies, or your or their respective agents, affiliates, representatives or advisors, directly or indirectly, to any other person that is considering providing debt financing to you or any of the Companies. You further agree that this Commitment Letter and the Fee Letter and the contents hereof and thereof are for your confidential use only and that neither their existence nor any of the terms thereof will be disclosed by you, the Companies to any other person or entity without our prior written consent other than (a) to your officers, directors, employees, accountants, attorneys and other advisors, and then, in any such case, only on a “need to know” confidential basis in connection with the transactions contemplated hereby, and (b) as otherwise required by applicable law; provided, however, it is understood and agreed that you may disclose this Commitment Letter (including the Term Sheet), but not the Fee Letter (i) on a confidential basis to the board of directors and advisors of the Target in connection with their consideration of the Transactions and (ii) after your acceptance of this Commitment Letter and the Fee Letter, in filings with the Securities and Exchange Commission and other applicable regulatory authorities and stock exchanges, and you may disclose the Term Sheet on a confidential basis to prospective purchaser(s) of the Subordinated Notes. In addition, following your acceptance of the provisions hereof and return of an executed counterpart of this Commitment Letter and the Fee Letter to the Commitment Parties as provided below, you may make public disclosure of the existence and amount of each Commitment Party’s commitment hereunder, and of their identity as co-lead arrangers and agents. If you or any of your affiliates does show or circulate this Commitment Letter, the Fee Letter or the Term Sheets, or disclose the contents thereof, in breach of the foregoing, then you shall be deemed to have accepted this Commitment Letter and the Fee Letter.

All non-public information furnished by you or the Companies to the Commitment Parties and clearly marked as such shall be for the confidential use of the Commitment Parties and of the prospective Lenders and each of their respective officers, directors, employees, attorneys and other advisors, in accordance with each Commitment Party’s customary procedures for handling confidential information and for disseminating such information to prospective lenders. Notwithstanding the foregoing, you acknowledge and agree that the Commitment Parties may share certain information relating to transactions contemplated hereby with standard industry database companies (such as Loan Pricing Corporation and Standard & Poor’s LCD) in accordance with customary industry practice.

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7

You agree that any of KeyBank, GECC, GECM or their respective affiliates may be requested by you or the Companies or your or their affiliates to provide additional services to such parties. In connection therewith, KeyBank, GECC and GECM are each authorized to share information with other of their affiliates and such affiliates are authorized to share information with them, in each case subject to the same confidentiality limitations set forth in the preceding paragraph. Compensation for any such services will be agreed upon independently of this Commitment Letter. Nothing in this Commitment Letter is intended to obligate or commit KeyBank, GECC, GECM or any of their respective affiliates to provide any services, or any party to accept any services, other than as set forth herein. You further agree that none of KeyBank, GECC or GECM is providing accounting, tax, regulatory or legal advice to you or the Companies in connection with the Transactions or otherwise, and you have consulted your own accounting, tax, regulatory or legal advisors to the extent you have deemed appropriate. You further acknowledge and agree that no fiduciary, advisory or agency relationship between you, on the one hand, and GECM, GECC, KeyBank, or any of their respective affiliates, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Commitment Letter, and you hereby waive and release, to the fullest extent permitted by law, any claims that you may have against any of KeyBank, GECC and GECM with respect to any breach or alleged breach of agency or fiduciary duty.

By executing this Commitment Letter, you agree to indemnify and hold harmless KeyBank, GECC, GECM, each Lender, and each of their respective affiliates and their respective officers, directors, shareholders, employees, affiliates, agents and controlling persons (each, an “Indemnified Party”) from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any Indemnified Party may become subject arising out of or in connection with this Commitment Letter, the Credit Facilities, the Transactions, the Loan Documents, or any other agreement, document, instrument, or transaction related thereto or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Party is a party thereto, and to reimburse each Indemnified Party upon demand for any reasonable legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any Indemnified Party, apply to losses, claims, damages, liabilities or related expenses to the extent they are found in a final and nonappealable judgment by a court of competent jurisdiction to have resulted from the willful misconduct or gross negligence of such Indemnified Party. In no event shall any Indemnified Party be liable under this Commitment Letter or any other loan document or in respect of any act, omission or event relating to the transactions contemplated hereby or thereby, on any theory of liability, for any special, indirect, consequential or punitive damages. You agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract, tort or otherwise) to you or any of the Companies or any of your or their security holders for or in connection with the transactions contemplated hereby, except to the extent such liability is found in a final and nonappealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic telecommunications or other information transmission systems, other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnified Party as determined by a final and nonappealable judgment of a court of competent jurisdiction.

You further agree to reimburse KeyBank, GECC and GECM upon written request for all reasonable and summary documented out-of-pocket expenses (including, but not limited to (a) reasonable and summary documented expenses of due diligence investigation, consultants’ fees, travel expenses and syndication expenses (including all printing, reproduction, document delivery, CUSIP, SyndTrak and communication costs incurred in connection with the Syndication and execution of the Facilities), (b) the

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reasonable and summary documented fees, disbursements and other charges of Jones Day, counsel to KeyBank, and of special and local counsel retained by KeyBank and (c) the reasonable summary documented fees, disbursements and other charges of McGuireWoods LLP, counsel to GECC and GECM) incurred by any of them in connection with the Credit Facilities and the preparation of this Commitment Letter, the Fee Letter and the definitive documentation for the Credit Facilities, regardless of whether the transactions contemplated hereby are consummated or any loan documentation is entered into.

The confidentiality, disclosure, reimbursement and indemnity provisions (including, without limitation, the provisions of the immediately preceding five paragraphs) of this Commitment Letter shall remain in full force and effect regardless of whether any definitive documentation for the Credit Facilities shall be executed and delivered, and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of KeyBank, GECC or GECM hereunder.

You acknowledge that any of KeyBank, GECC or GECM or any of their respective affiliates may provide financing, equity capital, financial advisory and other services to parties whose interests may conflict with yours or the Companies’. None of KeyBank, GECC, GECM nor any of their respective affiliates have any duty to disclose to you, or use for your benefit, any information acquired in the course of providing services to any other person or engaging in any other transaction or otherwise carrying on our business. Neither KeyBank, GECC, GECM nor any of its affiliates have assumed any obligation to you other than as expressly provided herein.

Notwithstanding anything herein to the contrary, any party to this Commitment Letter (and any employee, representative or other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Commitment Letter and the Fee Letter and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure, except that (i) tax treatment and tax structure shall not include the identity of any existing or future party (or any affiliate of such party) to this Commitment Letter or the Fee Letter, and (ii) no party shall disclose any information relating to such tax treatment and tax structure to the extent nondisclosure is reasonably necessary in order to comply with applicable securities laws. For this purpose, the tax treatment of the transactions contemplated by this Commitment Letter and the Fee Letter is the purported or claimed U.S. Federal income tax treatment of such transactions and the tax structure of such transactions is any fact that may be relevant to understanding the purported or claimed U.S. Federal income tax treatment of such transactions.

We hereby notify you and the Companies that pursuant to the requirements of the USA PATRIOT Improvement and Reauthorization Act, Pub. L. 109-177 (signed into law March 9, 2006) (as amended from time to time, the “Patriot Act”), we and each Lender may be required to obtain, verify and record information that identifies you and your affiliates (including the Companies), which information includes the name, address, tax identification number and other information that will allow us and each Lender to identify you, your affiliates and the Companies in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to us and each Lender. You agree that we shall be permitted to share any or all such information with the Lenders.

This Commitment Letter and the Commitment Parties’ commitments and undertakings hereunder shall not be assignable by you without the prior written consent of each such person. Neither this Commitment Letter nor the Fee Letter may be amended or any provision hereof waived or modified

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except by an instrument in writing signed by the party against whom enforcement of the same is sought. This Commitment Letter and the Fee Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter or the Fee Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof. This Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. By executing this Commitment Letter, you acknowledge that this Commitment Letter and the Fee Letter are the only agreements among you and any of KeyBank, GECC or GECM with respect to the Credit Facilities and set forth the entire understanding of the parties with respect to the subject matter thereof. It is expressly intended that in the event definitive documentation for the Credit Facilities is executed and delivered and the Syndication has not at such time been successfully completed, the syndication provisions of this Commitment Letter and the Fee Letter will survive such execution and delivery as set forth in this Commitment Letter and the Fee Letter. Please note that those matters that are not covered or made clear in this Commitment Letter or the Fee Letter are subject to mutual agreement of the parties.

It is expressly intended that in the event the Loan Documents are executed and delivered and the Syndication has not at such time been successfully completed, the syndication provisions of this Commitment Letter and the Fee Letter will survive such execution and delivery until such time as the Syndication has been completed as determined by the Co-Lead Arrangers. The reimbursement, indemnification, governing law, jury trial waiver, forum selection, disclosure, and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Loan Documents shall be executed and delivered and notwithstanding the termination of this Commitment Letter.

This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of law principles thereof (other than sections 5-1401 and 5-1402 of the New York General Obligations Law). To the fullest extent permitted by applicable law, you hereby irrevocably submit to the exclusive jurisdiction of any New York State court or federal court sitting in the County of New York and the Borough of Manhattan in respect of any claim, suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter, any of the Transactions or any of the other transactions contemplated hereby or thereby and irrevocably agree that all claims in respect of any such claim, suit, action or proceeding may be heard and determined in any such court and that service of process therein may be made by certified mail, postage prepaid, to your address set forth above. You and we hereby waive, to the fullest extent permitted by applicable law, any objection that you or we may now or hereafter have to the laying of venue of any such claim, suit, action or proceeding brought in any such court, and any claim that any such claim, suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof by signing in the appropriate space below and returning to KeyBank and GECC the enclosed duplicate originals of this Commitment Letter and the Fee Letter, not later than 5:00 p.m., Cleveland, Ohio time, on December 21, 2010, at which time this Commitment Letter and the commitments and undertakings of KeyBank, GECC and GECM hereunder will (if not so accepted prior thereto) expire. Thereafter, the commitments and undertakings of KeyBank, GECC and GECM set forth in this

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Commitment Letter will terminate on the earlier of (a) March 11, 2011, unless the closing of the Transactions occurs on or prior to such date, (b) the closing of the Acquisition without the use of the Credit Facilities and (c) the termination or abandonment of the Merger Agreement or the acceptance by the Target or any of its affiliates of an offer for all or any substantial part of the capital stock or property and assets of the Target and its subsidiaries other than as part of the Transactions. In consideration of the time and resources that KeyBank, GECC and GECM will devote to the Credit Facilities, you agree that, until such expiration, you will not, and will cause the Companies not to, solicit, initiate, entertain or permit, or enter into any discussions in respect of, any offering, placement or arrangement of any competing financing transactions for any of the Companies with respect to the matters addressed in this Commitment Letter.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK ]

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Each of KeyBank, GECC and GECM is pleased to have been given the opportunity to assist you in this important transaction.

Regards, KEYBANK NATIONAL ASSOCIATION
By:	/s/ Thomas A. Crandell
Name:	Thomas A. Crandell
Title:	Senior Vice President
GE CAPITAL MARKETS, INC.
By:	/s/ Sean F. Obranski
Name:	Sean F. Obranski
Title:	Managing Director
GENERAL ELECTRIC CAPITAL CORPORATION
By:	/s/ Justin Grimm
Name:	Justin Grimm
Title:	Duly Authorized Signatory

Accepted and agreed to as of the date first above written:

VIGOR INDUSTRIAL LLC
By:	/s/ Frank J. Foti
Name:	Frank J. Foti
Title:	President

EX-99.(B)(2)

Exhibit (b)(2)

920 SW Sixth Avenue, Suite 1400 Portland, OR 97204 601 West 5^th Street, Suite 700 Los Angeles, CA 90071

Commitment Letter

$15,000,000 Senior Subordinated Promissory Notes

December 20, 2010

Mr. Frank J. Foti, President & CEO

Mr. Bruce A. Dummer, Senior Vice President, Finance

Mr. Joseph O’Rourke, Senior Vice President, Business Development

Vigor Industrial, LLC

5555 N. Channel Ave.

Portland, OR 97217

Gentlemen:

Vigor Industrial, LLC (the “Company” or “Vigor”) has advised Endeavour Structured Equity and Mezzanine Fund I, LP (“Endeavour SEAM”, “Lead Arranger” or “Lender”) that Vigor intends to form a new Delaware corporation (“Holdco”) that will in turn form a new merger sub (“Merger Sub”) that will (a) offer to purchase all of the equity interests (the “Acquisition”) of Todd Shipyards Corporation, a Delaware corporation (“Target”), and (b) merge with and into Target, with Target being the surviving entity (the “Merger”), in each case subject to certain terms and conditions. The aggregate consideration for the Acquisition and Merger is anticipated to be an amount equal to $130,000,000. After giving effect to the Acquisition and the Merger, Target will be an indirect wholly-owned subsidiary of Vigor.

Vigor has also advised Endeavour SEAM that Vigor intends to finance (i) the Acquisition, the Merger, and costs and expenses related to the Transaction (as hereinafter defined), (ii) the refinancing of certain existing indebtedness of Vigor and the Target as set forth on Exhibit B attached hereto, and (iii) the ongoing working capital and costs related to other general corporate purposes of Vigor and the Target after consummation of the Acquisition and the Merger from the following sources (and that no financing other than the financing described herein will be required in connection with the Transaction): (a) a senior secured revolving credit facility to be fully underwritten and co-agented by General Electric Capital Corporation and KeyBank National Association (each a “Senior Lender” and, collectively, the “Senior Lenders”) in the aggregate principal amount of $25,000,000 (the “Revolver”) which will provide for a $15,000,000 standby letter of credit (“L/C”) subfacility which is anticipated to support $13,400,000 of issued and outstanding standby L/C’s, (b) senior secured first-lien term loan to be co-agented by the Senior Lenders in the aggregate principal amount of $120,000,000 (the “Senior Term Loan,” and collectively with the Revolver, the “Credit Facility”), (c) senior subordinated promissory notes to be purchased by Endeavour SEAM in the aggregate principal amount of $15,000,000 (the

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December 20, 2010

Page 2 of 18

“Subordinated Notes,” or the “Investment”), and (d) subordinated promissory notes to be purchased by Frank J. Foti in the aggregate principal amount of $2,000,000 (the “Owner Notes”). The Acquisition, the Merger, the Credit Facility, the refinance of existing Vigor and Target indebtedness (as set forth on Exhibit B hereto), the Investment, the Owner Notes and all related transactions contemplated thereby are hereinafter collectively referred to as the “Transaction”.

Based on and subject to the foregoing, Endeavour SEAM is pleased to advise Vigor by this letter (the “Commitment Letter”) of its commitment to purchase the full principal amount of the Subordinated Notes, subject to the terms and conditions set forth herein and the terms and conditions set forth in the Summary of Terms and Conditions attached hereto as Exhibit A (the “Term Sheet”).

Vigor agrees to promptly prepare and provide to Endeavour SEAM all information with respect to Vigor, Target, the Acquisition, the Merger and the transactions contemplated hereby, including all financial information and projections (the “Projections”), as reasonably requested by Endeavour SEAM in connection with the Investment; provided that, with respect to information regarding Target, Vigor shall only be obligated to use commercially reasonable efforts to prepare and provide such information. Vigor hereby represents and covenants (with respect to Information and Projections relating to Target and its subsidiaries, to Vigor’s knowledge after due inquiry) that (a) all information other than the Projections (the “Information”) that has been or will be made available to Endeavour SEAM by Vigor or any of its representatives, when taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be made available to Endeavour SEAM by Vigor or any of its representatives have been or will be prepared in good faith based upon assumptions that are reasonable at the time of execution of this Commitment Letter; provided, however, that no representation or warranty is made as to the impact of future general economic conditions as to whether Vigor’s, the Target’s and their subsidiaries’ projected consolidated results as set forth in the Projections will actually be realized, it being recognized by Endeavour SEAM that such projections as to future events are not to be viewed as facts and that actual results for the periods covered by the Projections may differ materially from the Projections. Vigor understands that in structuring the Investment, Endeavour SEAM may use and rely on the Information and Projections without independent verification thereof.

As consideration for Endeavour SEAM’s commitment hereunder, Vigor hereby agrees to pay to Endeavour SEAM the fees, when earned, and expenses, when incurred, described herein and in the Term Sheet. Within two business days of execution of this Commitment Letter by Vigor, Vigor shall pay to Endeavour SEAM the amount of $300,000 (the “Expense Deposit”) as a deposit to be used to pay a portion of the fees and expenses incurred by Endeavour SEAM as contemplated in the immediately preceding sentence. Vigor further agrees to pay to Endeavour SEAM additional expense deposits in increments of $25,000 at such times as the Expense Deposit is less than $25,000 after reasonably incurred and documented out-of-pocket expenses.

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December 20, 2010

Page 3 of 18

In the event that (a) Vigor or any of its affiliates (Vigor together with its affiliates, individually, a “Related Party” and, collectively, the “Related Parties”) consummates any portion of the Transaction, or any similar transaction, within twelve months after the date of this Commitment Letter without Endeavour SEAM acting as Lead Arranger or a purchaser of any Subordinated Notes, or without any Subordinated Notes financing, to complete the Transaction, or any similar transaction, notwithstanding a willingness on the part of Lender to provide and arrange the Subordinated Notes in accordance with this Commitment Letter, or (b) any Related Party consummates any transaction similar to the Transaction within twelve months after the date hereof in which any Related Party acquires, directly or indirectly, a majority or more of the equity interests of the Target or all or substantially all of the assets of the Target (any such transaction an “Alternate Transaction”) without Lender acting as Lead Arranger or a purchaser of any Subordinated Notes utilized to complete such Alternate Transaction, or without any Subordinated Notes financing, notwithstanding a willingness on the part of Lender to provide and arrange such Subordinated Notes, Vigor agrees in each case to pay to Lender a fee equal to the full amount of the Alternative Transaction Fee (as defined below) in immediately payable funds, immediately upon the consummation of such transaction referred to in either clause (a) or (b) above. The “Alternative Transaction Fee” to Lender shall equal to 1.75% of the committed Subordinated Notes amount in consideration of such commitments and Lender’s activities in connection with arranging and syndicating the Subordinated Notes.

Vigor also further agrees that if any Related Party enters into a definitive agreement in connection with the Transaction, any Alternate Transaction or any portion of either the Transaction or Alternate Transaction that provides for the payment of a so-called “topping fee,” “break-up fee,” or any similar termination fee or the payment or any other form of consideration (including reimbursement of documented expenses) in the event that the Transaction or such Alternate Transaction is not consummated, Vigor agrees to pay (or cause the other Related Parties to pay) to Lender, in immediately available funds, upon receipt by any Related Parties and without requirement of notice from Endeavour SEAM, a fee equal to 3% of such “topping fees,” “break-up fees,” other termination fees or other forms of consideration (including reimbursement of expenses) received by the Related Parties (after reimbursement of the documented expenses of the Related Parties) and such topping fees/breakup fee percentage will be proportionally adjusted upward by Vigor in the event the Subordinated Notes made on the Funding Date are in excess of $15 million.

In addition to the foregoing, and regardless of whether definitive documentation shall be executed and delivered or whether the transactions contemplated by this Commitment Letter or in the Term Sheet are consummated or shall have occurred, upon Vigor’s execution of this Commitment Letter, Vigor hereby commits that it shall pay the reasonable and documented out-of-pocket fees and expenses incurred by Endeavour SEAM and the reasonable and documented fees, disbursements, and other charges of Endeavour SEAM’s counsel and consultants related to or in connection with the Transaction and the transactions contemplated by this Commitment Letter or in the Term Sheet.

Vigor agrees to indemnify and hold harmless Endeavour SEAM, its affiliates and the officers, directors, employees, advisors, attorneys and agents of the foregoing (each an “indemnified person”) from and against any and all losses, claims, damages and liabilities to which any such

Vigor Industrial, LLC

December 20, 2010

Page 4 of 18

indemnified person may become subject, arising out of or in connection with this Commitment Letter and the Investment, the use of the proceeds thereof, any other component of the Transaction or any related transaction, or any claim, litigation, investigation or proceeding relating to any of the foregoing (collectively, “Indemnifiable Claims”), regardless of whether any indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, non-appealable judgment of a court of competent jurisdiction to arise from the gross negligence or willful misconduct of such indemnified person. Vigor also agrees to reimburse each indemnified person on demand for all reasonable and documented out-of-pocket expenses (including due diligence expenses, consultant fees and expenses, travel expenses, and all reasonable and documented fees, charges and disbursements of counsel) incurred in connection with the Indemnifiable Claims, including, without limitation, enforcement by the indemnified persons of the Indemnifiable Claims. To the fullest extent permitted by applicable law, Vigor (on behalf of itself and its affiliates) agrees not to assert, and hereby irrevocably and unconditionally waive, to the maximum extent not prohibited by law, any claim against any indemnified person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Commitment Letter or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby or the use of the proceeds of the Investment. No indemnified person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Commitment Letter or the Investment or the transactions contemplated hereby or thereby.

The obligations of Endeavour SEAM with respect to the Investment shall not become effective unless on or before 5:00 pm, Portland, Oregon time March 11, 2011 (the “Termination Date”) (i) each of the conditions set forth herein or in the Term Sheet are satisfied or waived by Endeavour SEAM, (ii) the Transaction shall have been consummated and (iii) the Senior Subordinated Notes (as described in Exhibit A hereto) have been issued to the Purchaser (as defined in Exhibit A hereto). In the event any of the conditions set forth clauses (i), (ii) or (iii) are not satisfied or waived by Endeavour SEAM on or before the Termination Date, Endeavour SEAM’s commitment with respect to the Investment shall terminate at such time.

This Commitment Letter shall not be assignable by you without the prior written consent of Endeavour SEAM (and any purported assignment without such consent shall be null and void) and is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. This Commitment Letter may not be amended or waived except by an instrument in writing signed by Vigor and Endeavour SEAM. This Commitment Letter may be executed in any number of counterparts, each of which shall upon execution and delivery be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by electronic transmission shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter (together with the Term Sheet) is the only agreement that has been entered into between or among Endeavour SEAM and Vigor with respect to the

Vigor Industrial, LLC

December 20, 2010

Page 5 of 18

Investment and sets forth the entire understanding of the parties with respect thereto, and supersedes all prior and contemporaneous agreements and understandings relating to the specific matters hereof, including, without limitation, that letter of interest, dated October 22, 2010, between Endeavour SEAM and Vigor.

Notwithstanding anything to the contrary contained herein, Vigor’s and Endeavour SEAM’s obligations and commitments under this Commitment Letter will be superseded in their entirety by the parties’ respective obligations as set forth in the Purchase Documents (as defined in Exhibit A hereto). This Commitment Letter and its enforcement shall be governed by, and construed in accordance with, the laws of the State of Oregon, without regard to conflicts-of-law principles.

Vigor acknowledges that Endeavour SEAM may be providing debt financing, equity capital or other services to other companies in respect of which Vigor may have conflicting interests regarding the transactions described herein and otherwise. Endeavour SEAM agrees to maintain the confidentiality of the confidential information obtained from Vigor by virtue of the transactions contemplated by this Commitment Letter or its other relationships with Vigor (such information, the “Confidential Information”), except that Confidential Information may be disclosed to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Confidential Information confidential), and Endeavour SEAM will not furnish any such information to other companies. Vigor also acknowledges that Endeavour SEAM has no obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to Vigor, any information obtained by it from other companies. For the purposes of this Commitment Letter, the term “Confidential Information” does not include information which (i) becomes generally available to the public other than as a result of a disclosure by Endeavour SEAM or its affiliates, (ii) was available to Endeavour SEAM on a non-confidential basis prior to its disclosure by Vigor or its affiliates, (iii) is developed by Endeavour SEAM or its affiliates independently and without access to the Confidential Information, or (iv) becomes available to Endeavour SEAM on a non-confidential basis from a source other than Vigor or its affiliates (other than in breach of confidentiality obligations).

This Commitment Letter is delivered to Vigor on the understanding that neither this Commitment Letter nor the Term Sheet nor any of their terms or substance shall be disclosed, directly or indirectly, to any other person except (a) to the Company’s or Endeavour SEAM’s officers, agents and advisors who are directly involved in the consideration of this matter, (b) as may be compelled in a judicial or administrative proceeding or as otherwise required by law (in which case Vigor agrees to inform us promptly thereof), (c) disclosure as may be necessary under the rules and regulations of the Securities Exchange Commission, (d) to the Senior Lenders and their officers, agents and advisors or (e) Target and its officers, agents and advisors.

The reimbursement (including, but not limited to, the reimbursement of the reasonable and documented out-of-pocket fees and expenses of Endeavour SEAM (including the reasonable and documented fees, disbursements, and other charges of Endeavour SEAM’s counsel and consultants set forth above)), indemnification and confidentiality provisions contained herein shall remain in full

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December 20, 2010

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force and effect notwithstanding the termination of this Commitment Letter or Endeavour SEAM’s commitment hereunder.

If the foregoing correctly sets forth the agreement between Vigor and Endeavour SEAM, please indicate Vigor’s acceptance of the terms hereof, including without limitation the fees set forth herein, and Vigor’s acceptance of the Term Sheet by returning to Endeavour SEAM executed counterparts hereof no later than 11:59 pm, Portland, Oregon time, on December 20, 2010. Endeavour SEAM’s commitment and agreements herein will expire at such time in the event Endeavour SEAM has not received such executed counterparts and such amounts in accordance with the immediately preceding sentence.

[Signature Page Follows]

Vigor Industrial, LLC

December 20, 2010

Page 7 of 18

Endeavour Structured Equity and Mezzanine Fund I, LP, is pleased to have been given the opportunity to assist Vigor in connection with the Investment.

Very truly yours,
By:	Endeavour SEAM I GP, LLC
Its:	General Partner
By:	/s/ Iain G. Douglas
Name:	Iain G. Douglas
Title:	Member
By:	/s/ Steven R. Wilkins
Name:	Steven R. Wilkins
Title:	Member
By:	/s/ Brian M. Hayden
Name:	Brian M. Hayden
Title:	Vice President

Accepted and agreed by:

Vigor Industrial, LLC
By:	/s/ Frank J. Foti
Name:	Frank J. Foti
Title:	President

Date: December 20, 2010

EXHIBIT A

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the Commitment Letter to which this Term Sheet is attached.

Co-Issuers:	Vigor and certain direct or indirect domestic subsidiaries of Vigor as mutually agreed to by the Purchaser and Vigor (collectively, the “Initial Co-Issuers”). Upon consummation of the Acquisition and the Merger, Holdco, Vigor and certain of their existing direct and indirect domestic subsidiaries shall irrevocably and unconditionally become co-issuers of the Senior Subordinated Notes on a joint and several basis as mutually agreed to by the Purchaser and Vigor. All of the co-issuers upon consummation of the Acquisition and the Merger and thereafter shall be hereafter referred to collectively as the “Co-Issuers” and the Initial Co-Issuers and the Co-Issuers shall hereafter be referred to herein collectively as the “Issuers.” Holdco shall be a single purpose holding company whose sole purpose is to hold the stock of both Cascade General, Inc., a Delaware corporation, and Merger Sub (which, following the Merger, shall be Todd Shipyards Corporation, a Delaware corporation), and perform related functions that are acceptable to the Purchaser.
Guarantors:	Each direct or indirect domestic subsidiary of Holdco or Vigor which is not an Issuer and each subsequently acquired or organized direct or indirect domestic subsidiary of Vigor shall promptly become a joint and several co-issuer or a guarantor of the Notes, as mutually agreed to by the Purchaser and Vigor. All guarantees will be guarantees of payment and not of collection.
Purchaser:	Endeavour Structured Equity and Mezzanine Fund I, LP, or its affiliates or designees selected in its sole discretion (“Endeavour SEAM”). Endeavour SEAM will be entitled to assign all or part of its interests in the Notes described below, or sell participations therein, subject to certain conditions (including compliance with applicable securities laws); provided that (i) at all times and without consent of the Issuers, Endeavour SEAM will be entitled to pledge, assign or hypothecate any of its interests in the Notes to any lender to Endeavour SEAM, (ii) at all times and without the consent of the Issuers, Endeavour SEAM will be permitted to transfer any of its interests in the Notes to its affiliates and (iii) except as set forth in clauses (i) and (ii) of this section, in the absence of an Event of Default, consent of any of the Issuers (which consent will not be unreasonably withheld) shall be required for any assignment of all or any portion of the Notes by Purchaser.
Principal Amount:	$15,000,000 at Closing Date, plus payment in kind interest as accrued

8

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

Price:	100% of the Principal Amount
Issue:	16.0% Subordinated Notes (the “Notes”)
Security/
Subordination:	The Notes will be unsecured and will be subordinated only to Senior Debt (as hereinafter defined) and other permitted indebtedness and liens permitted under the Credit Facility on terms and conditions satisfactory to the Purchaser in its sole discretion, including, without limitation, a maximum amount of Senior Debt and reduction of the amount of Senior Debt outstanding from time to time. The Owner Notes will be unsecured and will be subordinated to the Senior Debt and other permitted indebtedness and liens permitted under the Credit Facility on terms and conditions satisfactory to the Purchaser in its sole discretion.
Use of Proceeds:	The proceeds of the Notes, in conjunction with $120,000,000 of funded indebtedness made available by the Senior Lenders (the “Senior Debt”) and the Owner Notes shall be used solely (a) to acquire all of the equity interests of the Target for $130,000,000, (b) refinance certain existing indebtedness of Vigor and the Target and (c) to pay the costs, fees, and expenses in connection with the Transaction, all of which must be consistent with Exhibit B attached hereto.
Closing Date:	The earlier of (i) the date on which each of (a) each of the conditions set forth herein or in the Term Sheet are satisfied or waived by Endeavour SEAM, (b) the Transaction shall have been consummated and (c) the Senior Subordinated Notes (as described in Exhibit A hereto) have been issued to the Purchaser (as defined in Exhibit A hereto) and (ii) March 11, 2011 (the “Closing Date”).
Maturity:	The Notes shall mature and become due and payable 66 months from the Closing Date (the “Maturity”) if not prior thereto consistent with the terms of the Purchase Documents.
Interest Rate:	Interest on the Notes will accrue at a rate equal to 16.0% per annum calculated on the basis of actual days elapsed in a 365-day year. Cash interest of 13.0% per annum will be paid quarterly in arrears, and payment in kind interest of 3.0% per annum will be accrued quarterly and added to the principal amount of the Notes. The Issuers shall be permitted to pay in cash the payment in kind interest one time per annum subject to permitted payment restrictions to be agreed with the Senior Lenders.

9

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

Closing Fee:	2.50% of the Principal Amount which shall be fully earned and fully due and payable on the Closing Date and against which shall be credited any unused portion of the Expense Deposit.
Amortization:	The Notes shall be funded as a single borrowing on the Closing Date and shall not be subject to mandatory amortization except in the case of Mandatory Prepayment described below. Subject to Mandatory Prepayment or Optional Prepayment described below, all outstanding amounts, including all unpaid principal and accrued and unpaid interest, fees and expenses shall be due at maturity. Any amounts repaid under the Notes may not be re-borrowed.
Mandatory
Prepayment:	The Issuers shall prepay the full, outstanding principal amount of the Notes at the applicable Redemption Price described below, and pay all accrued interest, upon the earliest to occur of any of the following events (each, a “Trigger Event”): (i) Maturity, (ii) an initial public offering of common stock or other third party equity raise other than issuance of equity securities in connection with an Issuer’s equity incentive plan, (iii) issuance of additional indebtedness not otherwise permitted under the terms of the Senior Debt, (iv) a change of control, (v) a sale of substantially all of the Issuers’ assets, or (vi) following acceleration of the Notes by the Purchaser following an event of default.
	If a Trigger Event occurs in the first 12 months following the Closing Date, Vigor shall prepay the full, outstanding principal amount of the Notes, plus 3.0% of the full principal amount plus the present value of the interest that would have accrued on such principal amount from the date of prepayment until the date 12 months following the Closing Date, using a prepayment discounted interest rate equal to the sum of (i) the applicable Treasury rate for the time horizon being discounted and (ii) 50 basis points as the applicable discount rate.
Optional
Prepayment:	The Notes may not be optionally prepaid prior to the first anniversary of the closing. The Notes may be redeemed at the option of the Company, in whole or in part, upon not less than 30 days and not more than 60 days notice, at a redemption price (“Redemption Price”) as set forth on the Redemption Price schedule below, in each case plus accrued interest on the principal redeemed:

Quarters From Closing	Redemption Price Percentage
5-8	103%

10

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

Quarters From Closing	Redemption Price Percentage
9-12	102%
13-16	101%
Thereafter	100%

Board Observation
Rights:	None
Transfer and
Confidentiality:	The terms of and documentation for the Notes shall provide that the Purchaser shall have the right, without prior notice or consent of any of the Issuers, or any third party, to (i) freely transfer their interests in the Notes to their affiliates (in compliance with applicable securities laws); (ii) pledge their interests in the Notes to a financial institution providing financing, and (iii) to disclose Confidential Information to such transferee or financial institution in connection with the Purchaser’s obtaining financing related to a pledge of their interests in the Notes, subject to the persons to whom such disclosure is made being informed of the confidential nature of such Confidential Information and instructed to keep such Confidential Information confidential. For clarity’s sake, no Issuer shall be required to file a registration statement with respect to the Notes.
Conditions Precedent
To Closing:	The closing and funding of the Notes shall be subject to the satisfaction of the following conditions precedent:
	(a)     The negotiation, execution and delivery on or before March 11, 2011 of a definitive agreement and related documentation for the Notes (including without limitation issuance of appropriate guarantees, subordination agreements, contribution agreements and legal opinions that are customary in the context of the proposed Transaction), which are consistent with the Commitment Letter and reasonably satisfactory in form and substance to the Purchaser (collectively, “Purchase Documents”)
	(b)     The final terms and conditions of each aspect of the Transaction (including, without limitation, all tax aspects thereof and the terms and conditions of the Credit Facility) shall be as described in the Commitment Letter (including, without limitation, 100% indirect ownership of the Target by Vigor after consummation of the Transaction).

11

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

(c)     The Merger and, if applicable, the Acquisition, shall be consummated in accordance with the terms of the definitive documentation thereof without any amendment to or waiver of any condition thereto that is adverse to the Purchaser (excluding any updates to the disclosure schedules to the Agreement and Plan of Merger (the “Merger Agreement”) provided by the Target following the date of the Commitment Letter, to the extent such update does not give rise to a right of the Company to terminate the Merger Agreement) unless approved in writing by the Purchaser (it being acknowledged and agreed that the definitive documentation therefor submitted to the Purchaser as of the date of the Commitment Letter is satisfactory in all respects).

(d)     Delivery of copies of loan and security documentation for the Credit Facility which is consistent with the commitment letter among the Senior Lenders and Vigor and reasonably satisfactory in form and substance to the Purchaser and its counsel, and a subordination agreement reasonably satisfactory in form and substance to the Purchaser and its counsel, all of which shall be in full force and effect on the Closing Date.

(e)     Delivery of copies of documentation for the Owner Notes which is consistent with this Commitment Letter and reasonably satisfactory in form and substance to the Purchaser and its counsel, all of which shall be in full force and effect on the Closing Date.

(f)      None of the agreements, instruments or documents evidencing the Credit Facility nor the Notes, the Owner Notes or any document, instrument or agreement executed in connection therewith relating to the Transaction shall be altered, amended or otherwise changed or supplemented, or any condition therein waived, in each case in any manner materially adverse to the Purchaser, without the prior written consent of the Purchaser. Unless Vigor shall obtain the prior written consent of Endeavour SEAM, the Acquisition and Merger shall be consummated prior to or simultaneously with the funding of the Investment in accordance with the terms of the Agreement and Plan of Merger and in accordance in compliance in all material respects with applicable law and regulatory approvals.

12

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

(g)     (i) The representations contained in the Commitment Letter with respect to the Information and Projections shall be correct in all material respects on the Closing Date, and (ii) there shall not have occurred since September 30, 2010 a “Material Adverse Effect” (as such term is defined in the Merger Agreement) with respect to the Target. Each of the changes, effects or events described in clause (ii) of this clause (g) shall be referred to herein as a “Material Adverse Effect”.

(h)     The Purchaser shall be satisfied in its discretion with the pro forma capital and ownership structure (including the intercompany debt) of Vigor and the Initial Co-Issuers. A minimum of availability under the Revolver equal to the sum of $10,000,000 plus the amount of the Revolver commitments in excess of $25,000,000 existing as of the Closing Date, after giving effect to the Transactions and all borrowings on such date.

(i)      All necessary material consents and approvals of the boards of directors and stockholders, if required, of Vigor and the Target (it being agreed that a recommendation by the board of directors of the Target which is neutral or not negative shall be satisfactory), governmental entities and other applicable third parties (including, without limitation, securities exchanges) in connection with the Transactions, shall have been obtained and all waiting periods shall have expired.

(j)      The Purchaser shall have received a certificate from the chief financial officer of the Company reasonably satisfactory to it that Vigor and its subsidiaries are solvent on a consolidated basis and are in compliance with all financial covenants on a pro forma basis after giving effect to the Transactions.

(k)     All accrued fees and reasonable and documented expenses of the Purchaser then due and payable pursuant to the Commitment Letter shall have been paid prior to the Closing Date or contemporaneously with the closing on the Closing Date.

(l)      Endeavour SEAM shall have received, as of the date of the Commitment Letter, a compliance certificate demonstrating that (a) minimum Adjusted EBITDA (determined in accordance with and for the period set forth in the next

13

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

sentence) of Vigor and its subsidiaries and the Target and its subsidiaries (calculated on a pro forma basis after giving effect to the Transaction) was not less than $42.5 million, and (b) as of the Funding Date the ratio of total debt (including issued letters of credit) of Vigor and its subsidiaries on a consolidated basis to Adjusted EBITDA (determined in accordance with and for the period set forth in the next sentence) does not exceed 3.60 to 1.00 (calculated on a pro forma basis after giving effect to the Transaction). In addition, Vigor shall have provided to Purchaser a detailed calculation of “Adjusted EBITDA” for Vigor and its subsidiaries and the Target and its subsidiaries, which will (i) be calculated using the trailing twelve month consolidated EBITDA of Vigor and its subsidiaries and the Target and its subsidiaries, in each case, as of the last day of the immediately prior month ending more than 30 days prior to the Funding Date, and (ii) set forth the aggregate amount and all add-backs/deductions included therein, each case in accordance with the calculations made in connection with the Credit Facility.

(m)    If the “Applicable Interest Rates” (as such term is used in Exhibit A to the October 20, 2010 Engagement Letter from GE Capital Markets, Inc., General Electric Capital Corporation and KeyBank National Association to Vigor (the “Engagement Letter”)) exceed (i) in the case of a LIBOR based interest rate, LIBOR plus 5.50%, (ii) in the case of a Base Rate based interest rate, Base Rate plus 4.50% or (iii) in the case of the Applicable Interest Rate after the occurrence of an Event of Default, 2% per annum over the rate otherwise applicable (in each case, the percentage rate amount in excess of the stated rates above shall be referred to as the “Additional Interest Rate”), then (x) the interest rate on the Notes paid in kind shall increase by the Additional Interest Rate and (y) the default rate under the Notes shall increase by the Additional Interest Rate. As used in this clause (m), each of “LIBOR”, “Base Rate” and “Event of Default” shall have the meanings set forth in the Engagement Letter.

(n)     On the Closing Date and after giving effect to the Transaction, all of the indebtedness outstanding under (i) the Business Loan Agreement (Asset Based), dated as of May 7, 2007 (as amended), by and between Vigor and KeyBank National Association (“KeyBank”); (ii) the Loan Agreement,

14

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

	dated as of April 4, 2008 (as amended), by and between SCC and KeyBank; (iii) the Loan Agreement, dated as of April 1, 2010 (as amended), by and between US Barge LLC and KeyBank; and (iv) the Amended and restated Credit Agreement, dated as of April 10, 2006 (as amended), by and between Target and U.S. Bank, National Association, shall have been paid in full and all liens or guarantees relating thereto shall be extinguished.
	(o)    The Purchaser shall have received the following financial information: (A) unaudited consolidated financials of (i) the Company through the most recently completed month ended no more than 30 days prior to the Closing Date and (ii) the Target for each month ended after March 28, 2010, through the most recently completed month ended no more than 30 days prior to the Closing Date, (B) an opening pro forma balance sheet as of the month end referred to in clause (o)(A) above with respect to the Company and its subsidiaries on a consolidated basis (after giving effect to the Transaction), and (C) a fair salable value balance sheet as of the month end referred to in clause (o)(A) above with respect to the Company and its subsidiaries on a consolidated basis (after giving effect to the Transaction).
	(p)    The Purchaser’s receipt of satisfactory corporate approval of the financing, any necessary material consents or approvals, as well as opinions of counsel reasonably satisfactory to the Purchaser as to, among other matters, valid corporate existence, corporation power and authority, legality, validity and binding effect of all Transaction documents and the absence of any violation of law or regulation.
Representations,
Warranties and
Covenants:	Those consistent with the representations, warranties, and covenants contained in the definitive documentation for the Credit Facility, subject in each case to customary exceptions and materiality qualifications. Covenants (i) restricting asset sales at all operating companies, (ii) restricting payments or distributions to equity holders, (iii) requiring newly-formed or hereafter subsidiaries of Vigor to become Co-Issuers of the Notes, (iv) requiring the proceeds of the Notes to be used as set forth herein shall also be included, (v) restrictions on distribution or assets to non-Issuer and non-Guarantor subsidiaries and affiliates and (vi) restricting anti-layering,

15

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

	in each case including exceptions and baskets no more restrictive than analogous covenants contained in the Credit Facility.
Financial
Reporting:	Lender will conform its Financial Reporting requirements to those of the Credit Facility, which shall include, without limitation, (i) monthly unaudited financial statements and operational summaries, (ii) annual audited financial statements, (iii) annual financial and operational budgets/projections, and (iv) other financial reporting as required by Purchaser in its discretion.
Financial
Covenants:	Vigor will provide financial covenants relating to total leverage, maximum capital expenditures and fixed charge coverage ratio, each of which shall to the satisfaction of the Lender, provided that (i) Lender will conform operational definitions of the financial covenants to be consistent to those in the Credit Facility, and (ii) final covenant levels will be determined by Purchaser following receipt and review of projections by management and will be “set back” from Credit Facility financial covenant levels in an amount to be determined and acceptable to Purchaser and the lenders under the Credit Facility. Such financial covenants shall be accompanied by a quarterly compliance certificate signed by the Chief Financial Officer of Vigor outlining in reasonable detail the calculation of the financial covenants.
Events of Default:	Those customarily found in definitive agreements for similar financings and any additional events of default deemed appropriate by the Purchaser in its discretion in the context of the proposed transaction, in each case consistent with the term of the Senior Debt, including, without limitation, the failure of (i) the parties to execute definitive documents with respect to the Transaction, (ii) the Senior Lenders (or either of them) to fund the initial loans as contemplated under the Credit Facility, or (iii) consummate the Transaction (or any portion thereof) within 48 hours of the purchase of the Notes by Endeavour SEAM, in each case subject to customary cure rights and materiality thresholds that are no more restrictive to the Issuers than the events of default contained in the Credit Facility.
Expenses and
Indemnification:	The Issuers shall pay, or cause to be paid: (a) all reasonable and documented out-of-pocket fees and expenses incurred by the Purchaser in connection with their due diligence review including, without limitation, the reasonable and documented fees, charges, and

16

Vigor Industrial, LLC

SENIOR SUBORDINATED PROMISSORY NOTES

SUMMARY OF TERMS AND CONDITIONS

	disbursements of outside consultants, accountants, and attorneys of the Purchaser; (b) all reasonable and documented out-of-pocket fees and expenses of the Purchaser (including the reasonable and documented fees and disbursements of counsel) in connection with the preparation, execution, delivery, and administration of the Purchase Documents and any amendment or waiver with respect thereto, and (c) all reasonable and documented out-of-pocket fees and expenses of the Purchaser (including the reasonable and documented fees and disbursements of counsel and consultants) in connection with the enforcement of any of the Purchase Documents.
	The Issuers shall indemnify the Purchaser and hold it harmless against all claims, losses, liabilities, and reasonable and documented expenses (including reasonable and documented fees and disbursements of counsel) arising out of or relating to the proposed financing contemplated hereby and the other transactions connected therewith, except to the extent of the Purchaser’s gross negligence or willful misconduct that directly relates to the proposed financing.
Purchaser’s Counsel:	Kaye Scholer LLP
Governing Law and
Forum:	State of Oregon, without regard to conflict of law principles.

This Term Sheet is intended as a summary only and does not reference all of the terms, conditions, representations, warranties, covenants, and other provisions which shall be contained in the definitive documentation for the Notes and the transactions contemplated thereby. The information herein is considered confidential and shall not be distributed or discussed with any outside party other than approved financial and legal counsel of the Vigor, except as otherwise provided in the Commitment Letter.

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EXHIBIT B

Vigor Industrial, LLC

SOURCES AND USES

($ in thousands)
Sources
New Revolver (1)		—
New First Lien Term Loan		120,000.0
New Mezzanine Note		15,000.0
New Owner Note		2,000.0
Excess Cash		35,150.0
Total Sources	$	172,150.0
Uses
Purchase Hancock Shares @ $22.26/share	$	130,000.0
Retire Existing Vigor Debt		29,650.0
Estimated Fees & Expenses		12,500.0
Total Uses	$	172,150.0

(1) $10.0m excess availability required at closing, plus the amount of the Revolver commitments in excess of $25.0m existing as of the Closing Date, after giving effect to the Transaction and all borrowing on such date

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