Exhibit 10.1

SECOND AMENDMENT TO THE PLAN SUPPORT AGREEMENT

          This SECOND AMENDMENT TO THE PLAN SUPPORT AGREEMENT (this “Second
Amendment”), dated as of September 18, 2009, amends that certain Plan Support
Agreement, dated as of April 23, 2009 (the “Original Agreement”), as amended by
that certain First Amendment to the Plan Support Agreement, dated as of July 10,
2009 (the “First Amendment,” together with the Original Agreement, the
“Agreement”). The Agreement was entered into by and among (i) U.S. Shipping
Partners L.P. (“USSP”), U.S. Shipping Finance Corp., U.S. Shipping Operating
LLC, USS Chartering LLC, USS ATB 1 LLC, USS ATB 2 LLC, USS ATB 3 LLC, USS ATB 4
LLC, USS M/V Houston LLC, ITB Mobile LLC, USCS Chemical Pioneer Inc., ITB Groton
LLC, ITB New York LLC, ITB Jacksonville LLC, ITB Baltimore LLC, USCS ATB LLC,
USCS Sea Venture LLC, ITB Philadelphia LLC, USCS Chemical Chartering LLC, USCS
Charleston Chartering LLC, USCS Charleston LLC, USS JV Manager Inc., USS Product
Manager LLC, USS PC Holding Corp., US Shipping General Partner LLC (“USSGP”),
and USS Product Carriers LLC (collectively, the “U.S. Shipping Entities”), (ii)
certain lenders party to the First Lien Credit Agreement (as defined in the
Agreement) (each, a “Senior Secured Lender” and collectively, the “Senior
Secured Lenders”), and (iii) certain holders of Second Lien Notes (as defined in
the Agreement) (each, a “Second Lien Noteholder” and collectively, the “Second
Lien Noteholders”; the Second Lien Noteholders, together with the Senior Secured
Lenders, each a “Secured Party” and collectively, the “Secured Parties”).

RECITALS

          WHEREAS, the U.S. Shipping Entities and the Secured Parties entered
into the Original Agreement to reorganize and recapitalize the U.S. Shipping
Entities (the “Transactions”) in accordance with a proposed prearranged chapter
11 plan of reorganization (the “Plan”), whose material terms and conditions were
set forth in the term sheet attached to the Original Agreement as Exhibit “A”;

          WHEREAS, certain parties to the Original Agreement, including USSP,
the Steering Committee (as defined in the Agreement), and a majority in amount
of the Senior Secured Lenders and the Second Lien Noteholders entered into the
First Amendment (including an Amended and Restated Term Sheet, dated July 9,
2009 (the “Amended Term Sheet”)) amending the Original Agreement (including the
term sheet attached to the Original Agreement as Exhibit “A”) in order to
preserve the benefits sought by the Transactions;

          WHEREAS, paragraph 18(b) of the Agreement permits USSP and the
Steering Committee in consultation with the Secured Parties to amend the
Agreement as set forth herein without the need for a writing signed by a
majority in amount of either the Senior Secured Lenders or the Second Lien
Noteholders on account of the fact that the amendments to the Agreement set
forth herein are not materially adverse to the economic interests of either the
Senior Secured Lenders or the Second Lien Noteholders; and

          WHEREAS, USSP and the Steering Committee, in order to preserve the
benefits sought by the Transactions, specifically seek to amend that certain
Amended Term Sheet attached to the First Amendment;

          NOW THEREFORE, the Agreement is amended as follows:

          1.          All references to Class A New Common Stock and Class B New
Common Stock in the Amended Term Sheet are amended to refer to New Common Stock
having no stated dividend and all references to or descriptions of New Common
Stock being issued or divided in two separate classes are deleted.

          2.          All references to Class A Warrants and Class B Warrants in
the Amended Term Sheet are amended to refer to Warrants, meaning warrants to
purchase New Common Stock.

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          3.          All references to the Priority Distribution Amount in the
Amended Term Sheet are amended to refer to a contingent payment right
(“Contingent Payment Right”), which will be distributed pro rata to the Senior
Secured Lenders (in addition to their pro rata shares of New Common Stock, and
the New Term Loan). The Contingent Payment Right shall have the same priority
and economic terms as the Priority Distribution Amount (i.e., approximately
$55.5 million principal and 4% uncompounded accruing thereon on the unpaid
balance). The Contingent Payment Rights will be exempt from the registration
requirements of the Securities Act pursuant to section 1145 of the Bankruptcy
Code and shall be subject to appropriate restrictions as to transfer in order to
preserve the tax attributes and securities law status of Reorganized USSP.

          4.          The description of the “Equity Ownership in Reorganized
Debtors” in the Amended Term Sheet is amended so that the first paragraph in
sub-paragraph (a) refers to “50% of the New Common Stock (after giving effect to
the exercise of all Warrants but before giving effect to the Management Equity
Plan)” and not “100% of Class A New Common Stock.”

          5.          Reference to “23% of the total number of shares of Class A
New Common Stock” in sub-paragraph (a) (ii) (A) is the description of the
“Equity Ownership in Reorganized Debtors” in the Amended Term Sheet is amended
to refer to “11.5% of the total number of shares of New Common Stock.”

          6.          The description of the “Equity Ownership in Reorganized
Debtors” in the Amended Term Sheet is amended so that the first paragraph in
sub-paragraph (b) refers to “50% of the New Common Stock” (instead of “100% of
Class B New Common Stock”).

          7.          Reference to “23% of the total number of shares of Class B
New Common Stock” in sub-paragraph (a)(ii)(B) is the description of the “Equity
Ownership in Reorganized Debtors” in the Amended Term Sheet is amended to refer
to “11.5% of the total number of shares of New Common Stock.”

          8.          The description of the “Equity Issuance” in the Amended
Term Sheet is amended to delete “Reorganized USSP may not issue and sell any
additional shares of Class A New Common Stock other than upon exercise of the
Class A Warrants.”

          9.          The description of the “Governance” in the Amended Term
Sheet is amended to provide that the New Board is required to include only one
member of management.

          10.          The description of the “Governance” in the Amended Term
Sheet is further amended to provide that, for the avoidance of doubt, actions by
the Requisite Senior Lenders shall be deemed effective if taken by a majority in
interest of the Requisite Senior Lenders.

          11.          The description of the “Warrants” in the Amended Term
Sheet is amended to delete “In addition, the Class A Warrants will provide that
in the event Reorganized USSP makes a distribution in respect of the Priority
Distribution Amount, each holder of such Class A Warrant will receive a cash
payment equal to the amount it would have received had it exercised its Class A
Warrant immediately prior to such distribution being made and had owned Class A
New Common Stock as the time such distribution was being made.”

          12.          The description of “Excess Cash Sweep” in the Amended
Term Sheet is amended to add the following clause (vii): “amounts reasonably
anticipated for working capital for grain voyages expected during the next
succeeding three quarters”

          13.          The portion of the Amended Term Sheet setting forth the
fees payable by the Reorganized Debtors is amended to provide that the maximum
amount of prepetition and postpetition fees and expenses of Pillsbury Winthrop
Shaw Pittman LLP, counsel to the chairman of the Steering Committee, payable by
the Reorganized Debtors is increased by $150,000.

          14.          The portion of the Amended Term Sheet setting forth the
fees payable by the Reorganized Debtors is further amended to provide that
counsel to the Senior Secured Lenders and administrative agent in connection
with the documentation of the New Term Loan is authorized to retain maritime
counsel and the fees and expenses of such maritime counsel will be paid by the
Debtors without the need for application to, or approval of, the Bankruptcy
Court.

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          15.          USSP shall file a copy of the Second Amendment with the
Bankruptcy Court in its Chapter 11 Case (as such terms are defined in the
Agreement) within two (2) business days of the execution of the Second
Amendment.

          IN WITNESS WHEREOF, each of the parties below has caused this Second
Amendment to be executed and delivered by its duly authorized officer.

 

 

 

 

 

U.S. SHIPPING PARTNERS L.P.

 

By: US Shipping General Partner LLC, its general partner

 

 

 

 

By: 

/s/

 

 

 

 

 

Name: Ronald L. O’Kelley

 

Title: Chief Executive Officer

 

 

 

 

STEERING COMMITTEE

 

By: Zimmer Lucas Partners, Steering Committee Chair

 

 

 

 

By: 

/s/

 

 

 

 

 

Name: Devin L. Geoghegan

 

Title: Partner, Director of Research

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