J.F. Lehman & Company Completes Investment in Hawaii Superferry, Inc.

For Immediate Release

October 28, 2005

New York, NY (October 28, 2005) – J.F. Lehman & Company, a New York-based private equity investor, today announced the completion of a control investment in HSF Holding, Inc., the parent company of Hawaii Superferry, Inc. The transaction involved over $235 million of debt and equity financing to acquire two high-speed catamaran passenger/vehicle ferries built by Austal USA and commence interisland ferry service in Hawaii by early 2007. The financing included approximately $80 million of equity financing from affiliates of J.F. Lehman & Company, approximately $17 million in subordinated notes from Austal USA and $140 million in senior debt financing from ABN-Amro Bank guaranteed by the United States Maritime Administration pursuant to Title XI of the Merchant Marine Act of 1936. These funds are in addition to $40 million previously appropriated by the State of Hawaii to construct related port infrastructure improvements.

Based in Honolulu, Hawaii Superferry, Inc. will bring the first state-of-the-art, high-speed ferry service for passengers and vehicles to Hawaii. The Hawaiian Islands are currently the only major archipelago in the world without an interisland ferry service between principal islands. Hawaii Superferry will fill this significant gap in Hawaii’s transportation infrastructure and will commence service in early 2007 between Oahu and the islands of Maui and Kauai at very affordable prices. Service to the Big Island is expected to begin in 2009 with the arrival of the second vessel.

John Lehman, Chairman of J.F. Lehman & Company, said, “This successful closing marks the beginning of the transformation of interisland life and commerce in Hawaii. Hawaii Superferry will provide, for the first time, quick and cost-effective movement of passengers and commercial vehicles between islands. Hawaii Superferry represents a unique partnership of the private and public sectors in bringing this vitally important service to Hawaii.”

Louis Mintz, Partner at J.F. Lehman & Company, added, “The public awareness and support of this project has been tremendous, and we look forward to introducing service in early 2007. This proven vessel technology has been successfully used around the world for more than a decade. We are excited to sponsor its introduction to Hawaii.”

Tim Dick, President and one of the founders of Hawaii Superferry, commented, “Hawaii is a big step closer to ending a fifty-year period as the only archipelago in the world without ferry service between its major islands. It will help make interisland travel affordable and convenient again for our families. The service will be especially helpful for neighbor islanders who travel to Oahu for their business, personal and health care needs.”

Debevoise & Plimpton LLP provided legal counsel to J.F. Lehman & Company on this transaction, while Blank Rome LLP advised Hawaii Superferry, Inc.

About J.F. Lehman & Co.
J.F. Lehman & Company is a leading middle-market private equity firm focused exclusively on the defense, aerospace and marine sectors. The firm was founded by John F. Lehman, former Secretary of the United States Navy (1981-1987), and has completed 10 investments (13 companies) with an aggregate transaction value of approximately $1.3 billion. J.F. Lehman & Company has offices in New York, Washington and London. For more information about J.F. Lehman & Company, please visit www.jflehman.com.

J.F. Lehman & Company is a leading middle-market private equity firm focused exclusively on the defense, aerospace, and maritime sectors. The firm has offices in New York and Washington.

For more information about J.F. Lehman & Company, please visit www.jflpartners.com.

Contact

Lisa M. Steffens

J.F. Lehman & Company

(212) 634-1150

lms@jflpartners.com