Exhibit 10.3

Execution Version

COMMON UNIT AND CLASS B UNIT
PURCHASE AGREEMENT

BY AND AMONG

U.S. SHIPPING PARTNERS L.P.

AND

THE PURCHASERS

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Schedules and Exhibits

Schedule 2.01 -

List of Purchasers and Commitment Amounts

 

 

Schedule 2.01(d) –

List of Escrow Purchasers

 

 

Schedule 8.07 -

Notice and Contact Information

 

 

Exhibit A -

Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of
U.S. Shipping

 

 

Exhibit B -

Form of U.S. Shipping Officer’s Certificate

 

 

Exhibit C -

Form of Legal Opinion

 

 

Exhibit D -

Form of Registration Rights Agreement

 

 

Exhibit E -

Form of Purchaser’s Officer’s Certificate

 

 

Exhibit F -

Form of Purchaser’s Eligibility Representations

 

 

Exhibit G -

Form of Escrow Agreement

 

 

Exhibit H -

Form of Application for Admission

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COMMON UNIT AND
CLASS B UNIT PURCHASE AGREEMENT

          COMMON UNIT AND CLASS B UNIT PURCHASE AGREEMENT, dated as of August 4,
2006 (this “Agreement”), by and among U.S. Shipping Partners L.P., a Delaware
limited partnership (“U.S. Shipping”), and each of the Purchasers listed in
Schedule 2.01 attached hereto (each referred to herein as a “Purchaser” and
collectively, the “Purchasers”).

          WHEREAS, U.S. Shipping desires to raise an aggregate of at least $75
million through the sale of Common Units and Class B Units, and the Purchasers
desire to purchase an aggregate of at least $75 million of Common Units and
Class B Units from U.S. Shipping, each in accordance with the provisions of this
Agreement;

          WHEREAS, it is a condition to the obligations of the Purchasers
hereunder that, concurrently with the offer and sale of Common Units and Class B
Units, U.S. Shipping (i) offer and sell $100 million principal amount of its 13%
senior secured notes due 2014 in a concurrent private placement pursuant to Rule
144A and Regulation S under the Securities Act (the “Notes Offering”), (ii)
amend and restate its existing credit facility to provide it with $310 million
of term loans (including a $60 million delayed draw term loan) and a $40 million
revolving credit facility (the “Amended Credit Facility”); and (iii) form a
joint venture between U.S. Shipping and third party equity investors for the
construction of double-hulled product tankers, as further described in U.S.
Shipping’s Current Report on Form 8-K filed with the Commission on August 2,
2006 (the “Joint Venture Transaction”); and

          WHEREAS, U.S. Shipping has agreed to provide Purchasers with certain
registration rights with respect to the Purchased Units acquired pursuant to
this Agreement.

          NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, U.S. Shipping and each of the
Purchasers, severally and not jointly, hereby agree as follows:

ARTICLE I
DEFINITIONS

          Section 1.01     Definitions.  As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:

          “Action” against a Person means any lawsuit, action, proceeding or
complaint before any Governmental Authority, mediator or arbitrator.

          “Admission Application” shall have the meaning specified in Section
6.03(f).

          “Affiliate” means, with respect to a specified Person, any other
Person, whether now in existence or hereafter created, directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person.  For purposes of this definition, “control” (including, with
correlative meanings, “controlling,” “controlled by,” and “under common

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control with”) means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.

          “Agreement” shall have the meaning specified in the introductory
paragraph.

          “Allocated Purchase Price” means with respect to each Purchaser, the
dollar amount set for opposite such Purchaser’s name under the heading Allocated
Purchase Price on Schedule 2.01 hereto.

          “Amended Credit Facility” shall have the meaning specified in the
recitals of this Agreement.

           “Basic Documents” means, collectively, this Agreement, the
Registration Rights Agreement, the Class B Amendment and any and all other
agreements or instruments executed and delivered by the Parties on even date
herewith or at Closing, or any amendments, supplements, continuations or
modifications thereto.

          “Board of Directors” means the board of directors of the General
Partner.

          “Business Day” means any day other than a Saturday, Sunday, or a legal
holiday for commercial banks in New York, New York.

          “Class B Amendment” means an amendment to the Partnership Agreement,
in all material respects in the form of Exhibit A to this Agreement, which U.S.
Shipping will cause to be adopted immediately prior to the issuance and sale of
Class B Units contemplated by this Agreement.

          “Class B Unit Price” shall have the meaning specified in Section
2.01(b).

          “Class B Units” means the Class B Units of U.S. Shipping, as
established by the Class B Amendment.

          “Closing” shall have the meaning specified in Section 2.02.

          “Closing Date” shall have the meaning specified in Section 2.02.

          “Commission” means the United States Securities and Exchange
Commission.

          “Commitment Amount” means the number of Purchased Units set forth
opposite each Purchaser’s name on Schedule 2.01 to this Agreement.

          “Common Unit Price” shall have the meaning specified in Section
2.01(b).

          “Common Units” means the Common Units of U.S. Shipping representing
limited partner interests therein.

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          “Construction Contract” means the Amended and Restated Contract for
Construction of 49,000 DWT Product/Chemical Tankers, dated March 14, 2006, for
USS Product Carriers LLC by National Steel and Shipbuilding Company, as amended.

          “Delaware LLC Act” means the Delaware Limited Liability Company Act.

          “Delaware LP Act” means the Delaware Revised Uniform Limited
Partnership Act.

          “DGCL” means the General Corporation Law of the State of Delaware.

          “Escrow Agreement” means that certain Escrow Agreement dated as of
August 4, 2006, by and among U.S. Shipping Lehman Brothers, Inc. and the escrow
agent named therein in substantially the form attached hereto as Exhibit G.

          “Escrow Agent” shall have the meaning specified in the Escrow
Agreement.

          “Escrow Purchaser” shall have the meaning specified in Section
2.01(d).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the Commission promulgated
thereunder.

          “GAAP” means generally accepted accounting principles in the United
States of America in effect from time to time.

          “General Partner” means US Shipping General Partner LLC, a Delaware
limited liability company and the general partner of U.S. Shipping.

          “Governmental Authority” shall include the country, state, county,
city and political subdivisions in which any Person or such Person’s Property is
located or which exercises valid jurisdiction over any such Person or such
Person’s Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them and any monetary authorities that exercise
valid jurisdiction over any such Person or such Person’s Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, U.S.
Shipping, its Subsidiaries or any of their Property or any of the Purchasers.

          “Indemnified Party” shall have the meaning specified in Section 7.03.

          “Indemnifying Party” shall have the meaning specified in Section 7.03.

          “Joint Venture Transaction” shall have the meaning specified in the
recitals of this Agreement.

          “Law” means any federal, state, local or foreign order, writ,
injunction, judgment, settlement, award, decree, statute, law, rule or
regulation.

          “Lien” means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law,

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statute or contract, and whether such obligation or claim is fixed or
contingent, and including but not limited to the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes.  For the purpose of this Agreement, a Person shall be deemed to be the
owner of any Property that it has acquired or holds subject to a conditional
sale agreement, or leases under a financing lease or other arrangement pursuant
to which title to the Property has been retained by or vested in some other
Person in a transaction intended to create a financing.

          “Lock-Up Date” means 90 days from the Closing Date.

          “LTIP” shall have the meaning specified in Section 3.02(c).

          “Non-Escrow Purchaser” means each Purchaser other than those listed as
Escrow Purchasers on Schedule 2.01(d).

          “Notes Offering” shall have the meaning specified in the recitals of
this Agreement.

          “NYSE” shall mean The New York Stock Exchange.

          “Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of U.S. Shipping, dated as of November 3, 2004, as it may be
further amended from time to time, including by the Class B Amendment.

          “Party” or “Parties” means U.S. Shipping and the Purchasers party to
this Agreement, individually or collectively, as the case may be.

          “Person” means any individual, corporation, company, voluntary
association, partnership, joint venture, trust, limited liability company,
unincorporated organization or government or any agency, instrumentality or
political subdivision thereof, or any other form of entity.

          “Property” means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

          “Purchase Price” means the aggregate of each Purchaser’s Allocated
Purchase Price.

          “Purchased Class B Units” means the Class B Units to be issued and
sold to the Purchasers pursuant to this Agreement.

          “Purchased Common Units” means the Common Units to be issued and sold
to the Purchasers pursuant to this Agreement.

          “Purchased Units” means the Purchased Class B Units and the Purchased
Common Units.

          “Purchaser” shall have the meaning specified in the introductory
paragraph.

          “Purchaser Material Adverse Effect” means any material and adverse
effect on (i) the ability of a Purchaser to meet its obligations under the Basic
Documents on a timely basis or (ii) the ability of a Purchaser to consummate the
transactions under any Basic Document.

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          “Purchaser Related Parties” shall have the meaning specified in
Section 7.01.

          “Purchasers” shall have the meaning specified in the introductory
paragraph.

          “Registration Rights Agreement” means the Registration Rights
Agreement, substantially in the form attached to this Agreement as Exhibit D, to
be entered into at the Closing, among U.S. Shipping and the Purchasers.

          “Representatives” of any Person means the Affiliates, control persons,
officers, directors, employees, agents, counsel, investment bankers and other
representatives of such Person.

          “Second Quarter Distribution” shall have the meaning specified in
Section 5.02.

          “Securities Act” means the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the Commission promulgated
thereunder.

          “Subsidiary” means, as to any Person, any corporation or other entity
of which at least a majority of the outstanding equity interest having by the
terms thereof ordinary voting power to elect a majority of the board of
directors of such corporation or other entity is at the time directly or
indirectly owned or controlled by such Person or one or more of its
Subsidiaries; provided, USS Products Investor LLC, a Delaware limited liability
company, shall not be deemed to be a “Subsidiary” of U.S. Shipping or any of its
Subsidiaries for purposes of this Agreement.

          “Terminating Breach” shall have the meaning specified in Section
8.12(a)(ii).

           “Unitholders” means the Unitholders of U.S. Shipping (within the
meaning of the Partnership Agreement).

          “U.S. Shipping” shall have the meaning specified in the introductory
paragraph.

          “U.S. Shipping Material Adverse Effect” means any material and adverse
effect on (i) the assets, liabilities, financial condition, business,
operations, prospects or affairs of U.S. Shipping and its Subsidiaries, taken as
a whole, measured against those assets, liabilities, financial condition,
business, operations, prospects or affairs reflected in the U.S. Shipping SEC
Documents, (ii) the ability of U.S. Shipping and its Subsidiaries, taken as a
whole, to carry out their business as of the date of this Agreement or to meet
their obligations under the Basic Documents on a timely basis, or (iii) the
ability of U.S. Shipping to consummate the transactions under any Basic
Document.  Notwithstanding the foregoing, a “U.S. Shipping Material Adverse
Effect” shall not include any effect resulting or arising from: (a) any change
in general economic conditions in the industries or markets in which U.S.
Shipping or its Subsidiaries operate that do not have a disproportionate impact
on U.S. Shipping or its Subsidiaries; (b) national or international political,
diplomatic or military conditions, including any engagement in hostilities,
whether or not pursuant to a declaration of war, or the occurrence of any
military or terrorist attack; (c) changes in GAAP or other accounting principles
or (d) the consummation of the transactions contemplated hereby, by the Notes
Offering, by the Amended Credit Facility or by the Joint Venture Transaction.

          “U.S. Shipping Related Parties” shall have the meaning specified in
Section 7.02.

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          “U.S. Shipping SEC Documents” shall have the meaning specified in
Section 3.03.

          Section 1.02     Accounting Procedures and Interpretation.  Unless
otherwise specified in this Agreement, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters under this
Agreement shall be made, and all financial statements and certificates and
reports as to financial matters required to be furnished to the Purchasers under
this Agreement shall be prepared, in accordance with GAAP applied on a
consistent basis during the periods involved (except, in the case of unaudited
statements, as permitted by Form 10-Q promulgated by the Commission) and in
compliance as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto.

ARTICLE II
SALE AND PURCHASE

          Section 2.01     Sale and Purchase.

 

          (a)          Sale and Purchase.  Subject to the terms and conditions
of this Agreement, at the Closing, U.S. Shipping hereby agrees to issue and sell
to each Purchaser, and each Purchaser hereby agrees, severally and not jointly,
to purchase from U.S. Shipping, the number of Purchased Common Units and
Purchased Class B Units set forth on Schedule 2.01 hereto opposite the name of
such Purchaser, and each Purchaser agrees to pay U.S. Shipping the Common Unit
Price for each Purchased Common Unit and the Class B Unit Price for each
Purchased Class B Unit, in each case, as set forth in paragraph (b) below of
this Section 2.01.

 

 

 

          (b)          Consideration.  Subject to Section 5.02, (i) the amount
per Common Unit each Purchaser will pay to U.S. Shipping to purchase the
Purchased Common Units (the “Common Unit Price”) shall be $18.34 and (ii) the
amount per Class B Unit each Purchaser will pay to U.S. Shipping to purchase the
Purchased Class B Units (the “Class B Unit Price”) shall be $17.12.

 

 

 

          (c)          Maximum Number of Purchased Common Units. 
Notwithstanding any other provision of this Agreement, the maximum number of
Purchased Common Units to be issued and sold by U.S. Shipping to the Purchasers
pursuant to this Agreement shall not exceed 19.9% of the number of Common Units
outstanding immediately prior to Closing.

 

 

 

          (d)          Funding into Escrow by Certain Purchasers.  Each
Purchaser identified as an “Escrow Purchaser” on Schedule 2.01(d) hereto (each,
an “Escrow Purchaser”)  shall deposit its Allocated Purchase Price into an
escrow account as provided in the Escrow Agreement on the date hereof.  On the
Closing Date, upon receipt of satisfactory evidence that the conditions set
forth in Article VI have been satisfied, each such  Escrow Purchaser shall 
deliver notice to the Escrow Agent to promptly and timely release the  funds
escrowed under the Escrow Agreement to U.S Shipping.

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          (e)          Non-Escrow Purchasers. Each Non-Escrow Purchaser shall
deliver its Allocated Purchase Price to U.S. Shipping on the Closing Date as
provided in Section 6.03(b).

          Section 2.02     Closing.  The execution and delivery of the Basic
Documents (other than this Agreement), delivery of certificates representing the
Purchased Units, the release of the funds escrowed under the Escrow Agreement to
U.S. Shipping pursuant to the terms of the Escrow Agreement and execution and
delivery of all other instruments, agreements, and other documents required by
this Agreement (the “Closing”) shall take place on a date (the “Closing Date”)
concurrent with the closing of the Notes Offering, the Amended Credit Facility
and the Joint Venture Transaction.  The Closing shall take place on August 7,
2006 or such other date  with respect to which U.S. Shipping shall have given
each Purchaser two Business Days (or such shorter period as shall be agreeable
to the Parties).  The Closing shall take place at the offices of Fulbright &
Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103.

          Section 2.03     Independent Nature of Purchasers’ Obligations and
Rights.  The respective obligations of each Purchaser under any Basic Document
are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Basic Document.  The failure or waiver of
performance under any Basic Document by any Purchaser, or on its behalf, does
not excuse performance by any other Purchaser.  Nothing contained herein or in
any other Basic Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by any Basic Document.  Each
Purchaser shall be entitled to independently protect and enforce its rights,
including the rights arising out of this agreement or out of the other Basic
Documents, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

          Section 2.04     Termination. Notwithstanding anything to the
contrary, in the event that less than 100% of the Purchase Price is received by
U.S. Shipping on the Closing Date, this Agreement shall automatically terminate,
funds escrowed pursuant to Escrow Agreement shall be returned to the applicable
Purchasers pursuant to the terms thereof and any payments of a Purchaser’s
Allocated Purchase Price received directly by U.S. Shipping shall be returned to
the applicable Purchaser(s).

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF U.S. SHIPPING

          U.S. Shipping represents and warrants to the Purchasers, on and as of
the date of this Agreement and on and as of the Closing Date,  as follows:

          Section 3.01     Partnership Existence.  U.S. Shipping: (i) is a
limited partnership duly organized, validly existing and in good standing under
the Laws of the State of Delaware; (ii) has all requisite limited partnership
power, and has all material governmental licenses, authorizations, consents and
approvals, necessary to own its Properties and carry on its business as its
business is now being conducted as described in the U.S. Shipping SEC Documents,
except

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where the failure to obtain such licenses, authorizations, consents and
approvals would not reasonably be expected to have a U.S. Shipping Material
Adverse Effect; and (iii) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualifications
necessary, except where failure so to qualify would not reasonably be expected
to have a U.S. Shipping Material Adverse Effect.

          Section 3.02     Purchased Units, Capitalization and Valid Issuance.

 

          (a)          The Purchased Common Units shall have those rights,
preferences, privileges and restrictions governing the Common Units as set forth
in the Partnership Agreement. A true and correct copy of the Partnership
Agreement, as amended through the date hereof (but excluding the Class B
Amendment), has been filed by U.S. Shipping with the Commission as Exhibit 3.2
to U.S. Shipping’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2004. The Purchased Class B Units shall have those rights, preferences,
privileges and restrictions governing the Class B Units, which shall be
reflected in the Partnership Agreement, as amended by the Class B Amendment.

 

 

 

          (b)          As of the date of this Agreement, the issued and
outstanding limited partner interests of U.S. Shipping consist of 6,899,968
Common Units, 6,899,968 Subordinated Units, all of which are owned by United
States Shipping Master LLC, and the Incentive Distribution Rights (each as
defined in the Partnership Agreement) and the only issued and outstanding
general partner interest is the General Partner’s 2% general partner interest.
All of the outstanding Common Units, Subordinated Units and Incentive
Distribution Rights have been duly authorized and validly issued in accordance
with applicable Law and the Partnership Agreement and are fully paid (to the
extent required under applicable Law and the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the Delaware LP Act).

 

 

 

          (c)          Other than U.S. Shipping’s Long-Term Incentive Plan (the
“LTIP”), U.S. Shipping has no equity compensation plans that contemplate the
issuance of Common Units (or securities convertible into or exchangeable for
Common Units).  No indebtedness having the right to vote (or convertible into or
exchangeable for securities having the right to vote) on any matters on which
U.S. Shipping’s Unitholders may vote is issued or outstanding.  Except as set
forth in the first sentence of this Section 3.02(c), as contemplated by this
Agreement, or as are contained in the Partnership Agreement, there are no
outstanding or authorized (i) options, warrants, preemptive rights,
subscriptions, calls, convertible securities or other rights, agreements or
commitments of any character obligating U.S. Shipping or any of its Subsidiaries
to issue, transfer or sell any limited partner interests or other equity
interests in, U.S. Shipping or any of its Subsidiaries or securities convertible
into or exchangeable for such limited partner interests or other equity
interests, (ii) obligations of U.S. Shipping or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any limited partner interests or other
equity interests of U.S. Shipping or any of its Subsidiaries or any such
securities or agreements listed in clause (i) of this sentence or (iii) voting
trusts or similar agreements to which U.S. Shipping or any of its Subsidiaries
is a party with respect to the voting of the equity interests of U.S. Shipping
or

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any of its Subsidiaries, other than the pledge of units or shares of its
Subsidiaries to its lenders.

 

 

 

          (d)          (i) All of the issued and outstanding equity interests of
each of U.S. Shipping’s Subsidiaries are owned, directly or indirectly, by U.S.
Shipping free and clear of any Liens (except for such restrictions as may exist
under applicable Law and except for such Liens as may be imposed under U.S.
Shipping’s Second Amended and Restated Credit Agreement and the exhibits thereto
filed as exhibits to the U.S. Shipping SEC Documents and the Amended Credit
Facility), and all such ownership interests have been duly authorized, validly
issued and are fully paid (to the extent required by applicable Law and the
organizational documents of such Subsidiaries) and non-assessable (except as
nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act  and Sections 18-607 and 18-804 of the Delaware LLC Act, as
applicable, or the organizational documents of such Subsidiaries,) and free of
preemptive rights, with no personal liability attaching to the ownership
thereof, and (ii) except as disclosed in the U.S. Shipping SEC Documents,
neither U.S. Shipping nor any of its Subsidiaries owns any shares of capital
stock or other securities of, or interest in, any other Person, or is obligated
to make any capital contribution to or other investment in any other Person
other than USS Products Investor LLC.

 

 

 

          (e)          The offer and sale of the Purchased Units and the limited
partner interests represented thereby have been duly authorized by U.S. Shipping
pursuant to the Partnership Agreement and, when issued and delivered to the
Purchasers against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid (to the extent required by
applicable Law and the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act) and will be free of any and all Liens and restrictions on
transfer, other than restrictions on transfer under the Partnership Agreement
and under applicable state and federal securities Laws and other than such Liens
as are created by the Purchasers.

 

 

 

          (f)          The Common Units issuable upon conversion of the Class B
Units, and the limited partner interests represented thereby, upon issuance in
accordance with the terms of the Class B Units as reflected in the Class B
Amendment, and upon receipt of the required Unitholder approval, will be duly
authorized by U.S. Shipping pursuant to the Partnership Agreement, and will be
validly issued, fully paid (to the extent required by applicable Law and the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by Sections 17-303, 17-607 and 17-804  of the Delaware LP Act) and will
be free of any and all Liens and restrictions on transfer, other than
restrictions on transfer under the Partnership Agreement and under applicable
state and federal securities Laws and other than such Liens as are created by
the Purchasers.

 

 

 

          (g)          U.S. Shipping’s currently outstanding Common Units are
quoted on the NYSE and U.S. Shipping has not received any notice of delisting. 
The Purchased Common Units and Class B Units will be issued in compliance with
all applicable rules of the NYSE.  Prior to the Closing, U.S. Shipping will file
a supplemental listing application

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with the NYSE to list the Purchased Common Units and the Common Units underlying
the Class B Units.

          Section 3.03     U.S. Shipping SEC Documents.  U.S. Shipping has
timely filed with the Commission all  reports, schedules and statements required
to be filed by it under the Exchange Act  since its initial public offering (all
such documents filed on or prior to the date of this Agreement, collectively,
the “U.S. Shipping SEC Documents”).  The U.S. Shipping SEC Documents, including
any audited or unaudited financial statements and any notes thereto or schedules
included therein, at the time filed  (except to the extent corrected by a
subsequently filed U.S. Shipping SEC Document filed prior to the date of this
Agreement) (i) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, (ii) complied in all material respects with the applicable
requirements of the Exchange Act, (iii) complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto, (iv) were prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the Commission) and (v) fairly present
(subject in the case of unaudited statements to normal, recurring and year-end
audit adjustments) in all material respects the consolidated financial position
and the consolidated results of its operations and cash flows for the periods
then ended.  PricewaterhouseCoopers LLP is an independent registered public
accounting firm with respect to U.S. Shipping and has not resigned or been
dismissed as independent registered public accountants of U.S. Shipping as a
result of or in connection with any disagreement with U.S. Shipping on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedures.

          Section 3.04     No Material Adverse Change.  Except as set forth in
or contemplated by the U.S. Shipping SEC Documents, since December 31, 2005,
U.S. Shipping and its Subsidiaries have conducted their business in the ordinary
course, consistent with past practice, and there has been no (i) change that has
had or would reasonably be expected to have a U.S. Shipping Material Adverse
Effect, (ii) acquisition or disposition of any material asset by U.S. Shipping
or any of its Subsidiaries or any contract or arrangement therefor, otherwise
than for fair value in the ordinary course of business, (iii) material change in
U.S. Shipping’s accounting principles, practices or methods or (iv) incurrence
of material indebtedness (other than in connection with the Notes Offering, the
Amended Credit Facility and the Joint Venture Transaction).

          Section 3.05     Litigation.  Except as set forth in the U.S. Shipping
SEC Documents, there is no Action pending or, to the knowledge of U.S. Shipping,
contemplated or threatened against U.S. Shipping or any of its Subsidiaries or
any of their respective officers (in their capacity as such), directors (in
their capacity as such), Properties, which (individually or in the aggregate)
reasonably would be expected to have a U.S. Shipping Material Adverse Effect or
which challenges the validity of this Agreement or which would reasonably be
expected to adversely affect or restrict U.S. Shipping’s ability to consummate
the transactions contemplated by the Basic Documents.

          Section 3.06     No Conflicts.  The execution, delivery and
performance by U.S. Shipping of the Basic Documents to which it is a party and
all other agreements and instruments to be

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executed and delivered by U.S. Shipping pursuant hereto or thereto or in
connection herewith and therewith, and compliance by U.S. Shipping with the
terms and provisions hereof and thereof, do not and will not (a) violate any
provision of any Law, governmental permit, determination or award having
applicability to U.S. Shipping or any of its Subsidiaries or any of their
respective Properties, (b) conflict with or result in a violation of any
provision of the organizational documents of U.S. Shipping or any of its
Subsidiaries, including but not limited to, the threshold with respect to the
number of Units owned by Non-U.S. Citizens (as defined in the Partnership
Agreement) that may hold units in U.S. Shipping under the Partnership Agreement,
assuming the accuracy of the statements in each Purchaser’s Admission
Application, (c) require any consent, approval or notice under or result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under (i) any note, bond, mortgage, license, or loan or credit
agreement to which U.S. Shipping or any of its Subsidiaries is a party or by
which U.S. Shipping or any of its Subsidiaries or any of their respective
Properties may be bound or (ii) any other agreement, instrument or obligation,
or (d) result in or require the creation or imposition of any Lien upon or with
respect to any of the Properties now owned or hereafter acquired by U.S.
Shipping or any of its Subsidiaries, other than pursuant to the Amended Credit
Facility and the Notes Offering, except in the cases of clauses (a), (c) and (d)
where such violation, default, breach, termination, cancellation, failure to
receive consent or approval, or acceleration with respect to the foregoing
provisions of this Section 3.06 would not, individually or in the aggregate,
reasonably be expected to have a U.S. Shipping Material Adverse Effect.

          Section 3.07     Authority.  U.S. Shipping has all necessary limited
partnership power and authority to execute, deliver and perform its obligations
under the Basic Documents to which it is a party and to consummate the
transactions contemplated thereby; the execution, delivery and performance by
U.S. Shipping of the Basic Documents to which it is a party, and the
consummation of the transactions contemplated thereby, have been duly authorized
by all necessary action on its part; and the Basic Documents constitute the
legal, valid and binding obligations of U.S. Shipping (subject to Unitholder
approval of the conversion of the Class B Units into Common Units), enforceable
in accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer and similar Laws affecting
creditors’ rights generally or by general principles of equity, including
principles of commercial reasonableness, fair dealing and good faith. Except as
contemplated by this Agreement, no approval by U.S. Shipping’s Unitholders is
required as a result of U.S. Shipping’s issuance and sale of the Purchased
Units.

          Section 3.08     Compliance with Laws. Neither U.S. Shipping nor any
of its Subsidiaries is in violation of any judgment, decree or order or any Law
applicable to U.S. Shipping or its Subsidiaries, except as would not,
individually or in the aggregate, have a U.S. Shipping Material Adverse Effect. 
U.S. Shipping and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate regulatory authorities necessary to conduct
their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a U.S. Shipping Material Adverse Effect, and neither U.S. Shipping
nor any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit,
except where such potential revocation or modification would not have,
individually in the aggregate, a U.S. Shipping Material Adverse Effect.  Neither
U.S. Shipping, nor any of its Subsidiaries, nor

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any director, officer, agent, employee or other person acting on behalf of U.S.
Shipping or any of its Subsidiaries has, in the course of its actions for, or on
behalf of, U.S. Shipping or any of its Subsidiaries (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

          Section 3.09     Preemptive Rights or Registration Rights.  Except as
set forth in the agreement of limited partnership, limited liability company
agreement or other organizational documents of U.S. Shipping and its 
Subsidiaries, there are no preemptive rights or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any capital
stock or partnership or membership interests of U.S. Shipping or any of its
Subsidiaries, in each case pursuant to or any other agreement or instrument to
which any of such entities is a party or by which any one of them may be bound.
Neither the execution of this Agreement nor the issuance of the Purchased Units
as contemplated by this Agreement or the conversion of the Class B Units into
Common Units gives rise to any rights for or relating to the registration of any
Partnership Securities, other than pursuant to the Registration Rights
Agreement.

          Section 3.10     Insurance.  U.S. Shipping and its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent for the businesses in which they
are engaged in the good faith determination of the board of directors of the
general partner of U.S. Shipping.  U.S. Shipping does not have any reason to
believe that it nor any Subsidiary will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business.

          Section 3.11     Internal Accounting Controls.  U.S. Shipping and its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  U.S. Shipping is not aware of any material failure
of such internal accounting controls

          Section 3.12     Approvals.  Except as required by the Commission in
connection with U.S. Shipping’s obligations under the Registration Rights
Agreement and the registration rights agreement entered into in connection with
the Notes Offering and Unitholder approval of the conversion of the Class B
Units into Common Units, no authorization, consent, approval, waiver, license,
qualification or written exemption from, nor any filing, declaration,
qualification or registration with, any Governmental Authority or any other
Person is required in connection with the execution, delivery or performance by
U.S. Shipping of any of the Basic Documents to which it is a party, except (i)
as may be required under the state securities or “Blue Sky” Laws, (or (ii) where
the failure to receive such authorization, consent, approval, waiver, license,
qualification

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or written exemption or to make such filing, declaration, qualification or
registration would not, individually or in the aggregate, reasonably be expected
to have a U.S. Shipping Material Adverse Effect.

          Section 3.13     MLP Status.  U.S. Shipping has, for each taxable year
beginning after December 31, 2003 during which U.S. Shipping was in existence,
met the gross income requirements of Section 7704(c)(2) of the Internal Revenue
Code of 1986, as amended.

          Section 3.14     Investment Company Status.  U.S. Shipping is not an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

          Section 3.15     Offering.  Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
the sale and issuance of the Purchased Units pursuant to this Agreement is
exempt from the registration requirements of the Securities Act, and neither
U.S. Shipping nor, to U.S. Shipping’s knowledge, any authorized Representative
acting on its behalf has taken or will take any action hereafter that would
cause the loss of such exemption.

          Section 3.16     Certain Fees.  Other than fees payable to Lehman
Brothers Inc. and CIBC Global Markets for their services as placement agents, no
fees or commissions will be payable by U.S. Shipping to brokers, finders, or
investment bankers with respect to the sale of any of the Purchased Units or the
consummation of the transactions contemplated by this Agreement.  The Purchasers
shall not be liable for any such fees or commissions.  U.S. Shipping agrees that
it will indemnify and hold harmless each of the Purchasers from and against any
and all claims, demands, or liabilities for broker’s, finder’s, placement, or
other similar fees or commissions incurred by U.S. Shipping or alleged to have
been incurred by U.S. Shipping in connection with the sale of Purchased Units or
the consummation of the transactions contemplated by this Agreement.

          Section 3.17     No Side Agreements.  Except for the confidentiality
agreements described in Section 8.06, there are no other agreements by, among or
between U.S. Shipping or its Affiliates, on the one hand, and any of the
Purchasers or their Affiliates, on the other hand, with respect to the
transactions contemplated hereby nor promises or inducements for future
transactions between or among any of such parties.

          Section 3.18     Form S-3 Eligibility.  U.S. Shipping is eligible to
register the Purchased Common Units and the Common Units issuable upon
conversion of the Purchased Class B Units for resale by the Purchasers on a
registration statement on Form S-3 under the Securities Act.

          Section 3.19     Terms of Class B Units;  Class B Unit Vote.  The NYSE
has approved the terms of the Class B Units.  The affirmative vote of a majority
of the total votes cast by the holders of Common Units is required by the NYSE
to approve the conversion of Class B Units into Common Units. In addition, the
affirmative vote of a majority of the Common Units outstanding (excluding Common
Units held by the General Partner and its Affiliates) and of a majority of the
Subordinated Units outstanding, each voting as a separate class, is required to
approve the conversion of Class B Units into Common Units for the Common Units
issued upon

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such conversion to not be counted against the “basket” provided in Section
5.7(a) of the Partnership Agreement. 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

          Each Purchaser, severally and not jointly, represents and warrants to
U.S. Shipping with respect to itself, on and as of the date of this Agreement
and on and as of the Closing Date, as follows:

          Section 4.01     Valid Existence.  Such Purchaser (i) is duly
organized, validly existing and in good standing under the Laws of its
respective jurisdiction of organization and (ii) has all requisite power, and
has all material governmental licenses, authorizations, consents and approvals
necessary to own its Properties and carry on its business as its business is now
being conducted, except where the failure to obtain such licenses,
authorizations, consents and approvals would not reasonably be expected to have
a Purchaser Material Adverse Effect.

          Section 4.02     No Conflicts.  The execution, delivery and
performance by such Purchaser of the Basic Documents to which it is a party and
all other agreements and instruments to be executed and delivered by such
Purchaser pursuant hereto or thereto or in connection herewith or therewith,
compliance by such Purchaser with the terms and provisions hereof and thereof,
and the purchase of the Purchased Units by such Purchaser do not and will not
(a) violate any provision of any Law, governmental permit, determination or
award having applicability to such Purchaser or any of its Properties,
(b) conflict with or result in a violation of any provision of the
organizational documents of such Purchaser, or (c) require any consent (other
than standard internal consents), approval or notice under or result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under (i) any note, bond, mortgage, license, or loan or credit
agreement to which such Purchaser is a party or by which such Purchaser or any
of its Properties may be bound or (ii) any other such agreement, instrument or
obligation, except in the case of clauses (a) and (c), where such violation,
default, breach, termination, cancellation, failure to receive consent or
approval, or acceleration with respect to the foregoing provisions of this
Section 4.02 would not, individually or in the aggregate, reasonably be expected
to have a Purchaser Material Adverse Effect.

          Section 4.03     Investment.  The Purchased Units are being acquired
for such Purchaser’s own account, or the accounts of clients for whom such
Purchaser exercises discretionary investment authority, not as a nominee or
agent, and with no present intention of distributing the Purchased Units or any
part thereof, and that such Purchaser has no present intention of selling or
granting any participation in or otherwise distributing the same in any
transaction in violation of the securities Laws of the United States of America
or any state, without prejudice, however, to such Purchaser’s right at all times
(subject to such Purchaser’s agreement contained in Section 5.06) to sell or
otherwise dispose of all or any part of the Purchased Units under a registration
statement under the Securities Act and applicable state securities Laws or under
an exemption from such registration available thereunder (including, without
limitation, if available, Rule 144 promulgated thereunder). If such Purchaser
should in the future decide to dispose of any of the Purchased Units, such
Purchaser understands and agrees (a) that it may do so only (i) in compliance
with the Securities Act and applicable state securities law, as then in effect,
or (ii) in

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the manner contemplated by any registration statement pursuant to which such
securities are being offered, and (b) that stop-transfer instructions to that
effect will be in effect with respect to such securities.  Notwithstanding the
foregoing, a Purchaser may enter into a total return swap with respect to such
Purchaser’s Purchased Units with a third party provided that such transaction is
exempt from registration under the Securities Act.

          Section 4.04     Nature of Purchaser.  Such Purchaser represents and
warrants to, and covenants and agrees with, U.S. Shipping that, (a) it is an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
by the Commission pursuant to the Securities Act and (b) by reason of its
business and financial experience it has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Purchased Units, is
able to bear the economic risk of such investment and, at the present time,
would be able to afford a complete loss of such investment.  Furthermore, each
Purchaser will complete a Questionnaire in the form attached as Exhibit F hereto
and deliver such completed eligibility questionnaire to U.S. Shipping at
Closing, and the answers thereto will be true and correct as of the Closing
Date.

          Section 4.05     Receipt of Information; Authorization.  Such
Purchaser acknowledges that it (a) has access to the U.S. Shipping’s SEC
Documents and (b) has been provided a reasonable opportunity to ask questions of
and receive answers from Representatives of U.S. Shipping regarding such
matters, including with respect to the Joint Venture Transaction. 

          Section 4.06     Restricted Securities.  Such Purchaser understands
that the Purchased Units it is purchasing are characterized as “restricted
securities” under the federal securities Laws inasmuch as they are being
acquired from U.S. Shipping in a transaction not involving a public offering and
that under such Laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. In this connection, Purchaser represents that it is knowledgeable
with respect to Rule 144 of the Commission promulgated under the Securities Act.

          Section 4.07     Certain Fees.  No fees or commissions will be payable
by such Purchaser to brokers, finders, or investment bankers with respect to the
sale of any of the Purchased Units or the consummation of the transactions
contemplated by this Agreement.  Such Purchaser agrees, severally and not
jointly with the other Purchasers, that it will indemnify and hold harmless U.S.
Shipping from and against any and all claims, demands, or liabilities for
broker’s, finder’s, placement, or other similar fees or commissions incurred by
such Purchaser or alleged to have been incurred by such Purchaser in connection
with the purchase of Purchased Units or the consummation of the transactions
contemplated by this Agreement.

          Section 4.08     Legend.  It is understood that the certificates
evidencing the Purchased Units will bear the following legend:

 

“These securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), or the securities laws of any state or other
jurisdiction.  These securities may not be sold, offered for sale, pledged or
hypothecated except pursuant to an effective registration statement under the
Securities Act or pursuant to an

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exemption from registration thereunder, in each case in accordance with all
applicable securities laws of the states or other jurisdictions, and in the case
of a transaction exempt from registration, such securities may only be
transferred if the transfer agent for such securities has received documentation
satisfactory to it that such transaction does not require registration under the
Securities Act.”

          Section 4.09     Related Parties.

 

                         (a)          Each Purchaser identified on Schedule 2.01
hereto as not being a “related party” of U.S. Shipping represents and warrants
to, and covenants and agrees with, U.S. Shipping that such Purchaser is not an
officer or director of U.S. Shipping and, on the date hereof and as of the date
of Closing (before giving effect to the purchase of Purchased Units pursuant to
this Agreement), such Purchaser and its Affiliates (a) hold less than five
percent of the Common Units of U.S. Shipping outstanding on the date hereof and
(b) hold less than five percent of the outstanding voting power of U.S.
Shipping.

 

 

 

                         (b)          Each Purchaser identified on Schedule 2.01
hereto as being a “related party” of U.S. Shipping represents and warrants to,
and covenants and agrees with, U.S. Shipping that such Purchaser is purchasing
less than one percent of the outstanding Common Units of U.S. Shipping on the
date hereof.

ARTICLE V
COVENANTS

          Section 5.01     Shareholder Vote With Respect to Conversion.

 

                         (a)          U.S. Shipping shall, in accordance with
applicable Law and the Partnership Agreement, take all action necessary to
convene a meeting of its Unitholders to consider and vote upon the conversion of
the Class B Units into Common Units as soon as practicable, but in any event not
later than 120 days from the Closing Date.  Subject to fiduciary duties under
applicable Law, the Board of Directors shall, in connection with such meeting,
recommend approval of the conversion of the Class B Units into Common Units and
shall take all other lawful action to solicit the approval of the conversion of
the Class B Units into Common Units by the Unitholders, except that U.S.
Shipping may, but shall not be required to, hire any proxy solicitation firm in
connection with such meeting.

 

 

 

                         (b)          If the conversion of the Class B Units
into Common Units is not approved by the Unitholders at the meeting contemplated
by clause (a) or at successive meeting(s) as contemplated by this clause (b),
upon written notice from the Purchasers holding a majority of the Class B Units,
U.S. Shipping shall be obligated to convene another meeting of its Unitholders
on the terms set forth in clause (a) (except that such meeting shall take place
not later than 180 days from the date of the immediately prior meeting if a
meeting within 120 days is not approved by the NYSE), and the Board of Directors
shall again be obligated to take the actions set forth in clause (a) with
respect to such meeting.

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          Section 5.02     Second Quarter Distribution.  If the Closing is after
the record date of the distribution to Unitholders with respect to the quarter
ended June 30, 2006 (the “Second Quarter Distribution”), then the Purchasers
shall receive: (i) a discount on the Class B Unit Price equal to of the Second
Quarter Distribution and (ii) a discount on the Common Unit Price equal to the
Second Quarter Distribution.

          Section 5.03     Subsequent Issuances of Units.  Without the written
consent of the holders of a majority of the Purchased Units, from the date of
this Agreement until the Lock-Up Date, U.S. Shipping and US Shipping General
Partner LLC shall not grant, issue or sell any limited partner interests or
other equity securities, any securities convertible into or exchangeable for any
limited partner interests or other equity securities, or take any other action
that may result in the issuance of any of the foregoing, other than (i) options
to purchase Common Units or awards of restricted Common Units granted pursuant
to the LTIP, (ii) Common Units issued upon the exercise of options granted under
the LTIP and (iii) the issuance or sale of Common Units or Class B Units at a
price no less than $24.00 (including, and not net of, any underwriting discounts
and commissions or placement fees).  Notwithstanding the foregoing, U.S.
Shipping and US Shipping General Partner LLC, shall not, and shall cause their
Subsidiaries not to, sell, offer for sale or solicit offers to buy any security
(as defined in the Securities Act) that would be integrated with the sale of the
Purchased Units in a manner that would require the registration under the
Securities Act of the sale of the Purchased Units to the Purchasers. 

          Section 5.04     Vote For Conversion of Class B Units.  At any meeting
(including adjournments or postponements thereof) of U.S. Shipping’s Unitholders
held to consider approval of the conversion of the Class B Units into Common
Units (including the special meeting of Unitholders contemplated by Section
5.01) each of the Purchasers agrees to vote, and to use commercially reasonable
efforts to cause its Affiliates to vote, any Common Units or Subordinated Units
held by it or any such Affiliates, as applicable, on the record date for such
meeting in favor of the conversion of the Class B Units into Common Units.

          Section 5.05     Joint Venture Transaction.  U.S. Shipping shall use
its commercially reasonable efforts to take or cause to be taken all action and
to do or cause to be done all things necessary, proper or advisable under
applicable Law and regulations to consummate the Joint Venture Transaction.
Within  ten Business Days of the consummation of the Joint Venture Transaction,
U.S. Shipping shall host a public conference call  to discuss recent partnership
events.

          Section 5.06     Purchaser Lock-Up.  Each Purchaser agrees that from
and after the Closing it will not sell any of its Purchased Units prior to the
Lock-Up Date; provided, however, that any Purchaser may enter into a total
return swap or similar transaction with respect to the Purchased Units purchased
by such Purchaser.

          Section 5.07     Taking of Necessary Action.  Each of the Parties
hereto shall use its commercially reasonable efforts promptly to take or cause
to be taken all action and promptly to do or cause to be done all things
necessary, proper or advisable under applicable Law and regulations to
consummate and make effective the transactions contemplated by this Agreement. 
Without limiting the foregoing, U.S. Shipping and each Purchaser will, and U.S.
Shipping shall cause each of its Subsidiaries to, use its commercially
reasonable efforts to make all filings and

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obtain all consents of Governmental Authorities that may be necessary or, in the
reasonable opinion of the Purchasers or U.S. Shipping, as the case may be,
advisable for the consummation of the transactions contemplated by the Basic
Documents.

          Section 5.08     Disclosure; Public Filings.  U.S. Shipping  may,
without prior written consent or notice, disclose the name or identity of any of
the Purchasers (but no other information regarding such Purchaser) in any press
release or Current Report on Form 8-K under the Exchange Act filed as a result
of this Agreement, the other Basic Documents or the transactions contemplated
hereby, or other similarly required Exchange Act reports, or as required by
applicable Law or the rules or regulations of the NYSE or other exchange on
which securities of U.S. Shipping are listed or traded; provided that each of
Energy Income and Growth Fund and EGI-Fund (05-07) Investors, L.L.C. shall not
be named in any such press release without the written consent of such
Purchaser.

          Section 5.09     Other Actions.  U.S. Shipping shall (i) cause the
Class B Amendment to be adopted immediately prior to the issuance and sale of
the Class B Units contemplated by this Agreement and (ii) file prior to the
Closing a supplemental listing application with the NYSE to list the Purchased
Common Units and the Common Units underlying the Class B Units.

          Section 5.10     Use of Proceeds.  U.S. Shipping will use the
collective proceeds from the sale of the Purchased Units, the Notes Offering and
the Amended Credit Facility to fund the construction of at least three new ATBs,
to fund equity contributions to the Joint Venture, to refinance existing
indebtedness, to pay fees associated with such transaction and for general
partnership purposes.

ARTICLE VI
CLOSING CONDITIONS

          Section 6.01     Conditions to the Closing.

 

                         (a)          Mutual Conditions.  The respective
obligation of each Party to consummate the purchase and issuance and sale of the
Purchased Units shall be subject to the satisfaction on or prior to the Closing
Date of each of the following conditions (any or all of which may be waived by a
particular Party on behalf of itself in writing, in whole or in part, to the
extent permitted by applicable Law):

 

 

 

 

                              (i)          no Law shall have been enacted or
promulgated, and no action shall have been taken, by any Governmental Authority
of competent jurisdiction which temporarily, preliminarily or permanently
restrains, precludes, enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement or makes the transactions
contemplated by this Agreement  illegal;

 

 

 

 

 

                              (ii)          there shall not be pending any
Action by any Governmental Authority seeking to restrain, preclude, enjoin or
prohibit the transactions contemplated by this Agreement; and

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                              (iii)          U.S. Shipping shall have
concurrently closed the (A) Notes Offering; (B) Amended Credit Agreement; and
(C) Joint Venture Transaction, which closing shall include, in the case of the
Joint Venture Transaction, (w) execution and delivery of the Limited Liability
Company Agreement of USS Products Investor LLC  by the members thereof, (x) the
execution and delivery of the Management and Operating Agreement between USS
Product Manager LLC and USS Product Investors LLC  by such parties,  (y)
the delivery of the letter of credit contemplated under the Limited Liability
Company Agreement of USS Products Investor LLC  for the benefit of the Class B
Member (as defined therein) and (z) the execution and delivery by General
Dynamics Corporation of its performance guarantee pursuant to  the 
Construction  Contract.

 

 

 

 

                         (b)          Each Purchaser’s Conditions.  The
respective obligation of each Purchaser to consummate the purchase of its
Purchased Units shall be subject to the satisfaction on or prior to the Closing
Date of each of the following conditions (any or all of which may be waived by a
particular Purchaser on behalf of itself in writing, in whole or in part, to the
extent permitted by applicable Law):

 

 

 

 

                              (i)          U.S. Shipping shall have performed
and complied with the covenants and agreements contained in this Agreement that
are required to be performed and complied with by U.S. Shipping on or prior to
the Closing Date;

 

 

 

 

 

                              (ii)          the representations and warranties
of U.S. Shipping contained in this Agreement that are qualified by materiality
or U.S. Shipping Material Adverse Effect shall be true and correct when made and
as of the Closing Date and all other representations and warranties shall be
true and correct in all material respects when made and as of the Closing Date,
in each case as though made at and as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only);

 

 

 

 

 

                              (iii)          since the date of this Agreement,
no U.S. Shipping Material Adverse Effect shall have occurred and be continuing;

 

 

 

 

 

                              (iv)          no notice of delisting from the NYSE
shall have been received by U.S. Shipping with respect to the Common Units, and 
U.S. Shipping shall have filed a supplemental listing application with the NYSE
relating to the Purchased Common Units and the Common Units underlying the Class
B Units;

 

 

 

 

 

                              (v)          the Class B Amendment in all material
respects in the form attached as Exhibit A to this Agreement shall have been
duly adopted and be in full force; and

 

 

 

 

 

                              (vi)          U.S. Shipping shall have delivered,
or caused to be delivered, to the Purchasers at the Closing, U.S. Shipping’s
closing deliveries described in Section 6.02.

 

 

 

 

                         (c)          U.S. Shipping’s Conditions.  The
obligation of U.S. Shipping to consummate the sale of the Purchased Units to
each of the Purchasers shall be subject to

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the satisfaction on or prior to the Closing Date of each of the following
conditions with respect to each Purchaser individually and not the Purchasers
jointly (any or all of which may be waived by U.S. Shipping in writing, in whole
or in part, to the extent permitted by applicable Law):

 

 

 

 

                              (i)          each Purchaser shall have performed
and complied with the covenants and agreements contained in this Agreement that
are required to be performed and complied with by that Purchaser on or prior to
the Closing Date;

 

 

 

 

 

                              (ii)          the representations and warranties
of each Purchaser contained in this Agreement that are qualified by materiality
or Purchaser Material Adverse Effect shall be true and correct when made and as
of the Closing Date and all other representations and warranties shall be true
and correct in all material respects when made and as of the Closing Date, in
each case as though made at and as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only);

 

 

 

 

 

                              (iii)          since the date of this Agreement,
no Purchaser Material Adverse Effect shall have occurred and be continuing;

 

 

 

 

 

                              (iv)          the funds escrowed pursuant to the
Escrow Agreement shall have been released to U.S. Shipping;

 

 

 

 

 

                              (v)          each Escrow Purchaser shall have
delivered, or caused to be delivered, such Escrow Purchaser’s closing deliveries
described in Section 6.03(a);

 

 

 

 

 

                              (vi)          each Non-Escrow Purchaser shall have
delivered, or caused to be delivered, to U.S. Shipping at the Closing, such
Non-Escrow Purchaser’s closing deliveries described in Section 6.03(b);

 

 

 

 

 

                              (vii)          each Escrow Purchaser and each
Non-Escrow Purchaser shall have delivered, or caused to be delivered, to U.S.
Shipping at the Closing, such Purchaser’s closing deliveries described in
Section 6.03(c).

          Section 6.02     U.S. Shipping Deliveries.   At the Closing, subject
to the terms and   conditions of this Agreement, U.S. Shipping will deliver, or
cause to be delivered, to each Purchaser:

 

                         (a)          The Purchased Units by delivering
certificates (bearing the legend set forth in Section 4.08) evidencing such
Purchased Units at the Closing, all free and clear of any Liens, encumbrances or
interests of any other party other than restrictions on transfer imposed by
federal and state securities Laws and those imposed by Purchaser;

 

 

 

                         (b)          Copies of (i) the Certificate of Limited
Partnership of U.S. Shipping and (ii) the Certificate of Formation of the
General Partner, each certified by the Secretary of State of the State of
Delaware, dated as of a recent date;

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                         (c)          A certificate of the Secretary of State of
the State of Delaware, dated as of a recent date, that U.S. Shipping is in good
standing;

 

 

 

                         (d)          A cross-receipt, dated the Closing Date,
executed by U.S. Shipping and delivered to each Purchaser certifying that it has
received the Allocated Purchase Price with respect to the Purchased Units issued
and sold to such Purchaser;

 

 

 

                         (e)          An Officer’s Certificate substantially in
the form attached to this Agreement as Exhibit B;

 

 

 

                         (f)          An opinion addressed to the Purchasers
from legal counsel to U.S. Shipping, dated the Closing Date, substantially
similar in substance to the form of opinion attached to this Agreement as
Exhibit C; and

 

 

 

                         (g)          The Registration Rights Agreement in
substantially the form attached to this Agreement as Exhibit D, which shall have
been duly executed by U.S. Shipping.

          Section 6.03     Purchaser Deliveries. 

 

                        (a)          Deliveries by Escrow Purchasers. Subject to
the terms and conditions of this Agreement, each Escrow Purchaser will deliver,
or cause to be delivered:

 

 

 

 

                              (i)          At least one Business Day prior to
Closing, payment of such Escrow Purchaser’s Allocated Purchase Price by wire
transfer(s) of immediately available funds to an account designated in the
Escrow Agreement; and

 

 

 

 

 

                              (ii)          At the Closing,  each Escrow
Purchaser shall have delivered notice to the Escrow Agent instructing the
Escrow  Agent to release the funds escrowed pursuant to the Escrow Agreement to
U.S. Shipping.

 

 

 

 

                         (b)          Deliveries by Non-Escrow Purchasers. 
Subject to the terms and conditions of this Agreement, each non-Escrow Purchaser
will deliver, or cause to be delivered, at the Closing, payment to U.S. Shipping
of such non-Escrow Purchaser’s Allocated Purchase Price by wire transfer(s) of
immediately available funds to an account designated by U.S. Shipping in writing
at least one (1) Business Day prior to the Closing.

 

 

 

                         (c)          Deliveries by Escrow Purchasers and
Non-Escrow Purchasers.  Subject to the terms and conditions of this Agreement,
each Escrow Purchaser and Non-Escrow Purchaser will deliver, or cause to be
delivered, to U.S. Shipping at the Closing:

 

 

 

 

                              (i)          the Registration Rights Agreement in
substantially the form attached to this Agreement as Exhibit D, which shall have
been duly executed by each Purchaser; and

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                              (ii)          a cross-receipt, dated the Closing
Date, executed by each Purchaser and delivered to U.S. Shipping certifying that
such Purchaser has received certificates evidencing the number of Purchased
Units set forth opposite the name of such Purchaser on Schedule 2.01;

 

 

 

 

 

                              (iii)          an Officer’s Certificate
substantially in the form attached to this Agreement as Exhibit E;

 

 

 

 

 

                              (iv)          a complete an eligibility
questionnaire in the form attached as Exhibit F hereto; and

 

 

 

 

 

                              (v)          an Application for Admission 
requesting admission to U.S. Shipping as a substitute limited partner
substantially in the form attached to this Agreement as Exhibit H (an “Admission
Application”).

ARTICLE VII
INDEMNIFICATION, COSTS AND EXPENSES

          Section 7.01     Indemnification by U.S. Shipping.  U.S. Shipping
agrees to indemnify each Purchaser and its Representatives (collectively,
“Purchaser Related Parties”) from, and hold each of them harmless against any
and all actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly on demand, pay and reimburse each of them costs, losses, liabilities, 
damages, or expenses of any kind or nature whatsoever, including the reasonable
fees and disbursements of counsel and all other reasonable expenses incurred in
connection with investigating, defending or preparing to defend any such matter
that may be incurred by them or asserted against or involve any of them as a
result of, arising out of, or in any way related to the breach of any of the
representations, warranties or covenants of U.S. Shipping contained herein;
provided that such claim for indemnification relating to a breach of a
representation or warranty is made prior to the expiration of such
representation or warranty; and provided further, that no Purchaser Related
Party shall be entitled to recover special, consequential (including lost
profits or diminution in value) or punitive damages.

          Section 7.02     Indemnification by Purchasers. Each Purchaser agrees,
severally and not jointly, to indemnify U.S. Shipping and its Representatives
(collectively, “U.S. Shipping Related Parties”) from, and hold each of them
harmless against, any and all actions, suits, proceedings (including any
investigations, litigation, or inquiries), demands and causes of action and, in
connection therewith, and promptly upon demand, pay and reimburse each of them
costs, losses, liabilities,  damages, or expenses of any kind or nature
whatsoever, including, without limitation, the reasonable fees and disbursements
of counsel and all other reasonable expenses incurred in connection with
investigating, defending or preparing to defend any such matter that may be
incurred by them or asserted against or involve any of them as a result of,
arising out of, or in any way related to the breach of any of the
representations, warranties or covenants of such Purchaser contained herein;
provided that such claim for indemnification relating to a breach of a
representation or warranty is made prior to the expiration of such
representation or warranty; and provided further, that no U.S. Shipping Related
Party shall be entitled to recover special,, consequential (including lost
profits or diminution in value) or punitive damages.

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          Section 7.03     Indemnification Procedure.          Promptly after
any U.S. Shipping Related Party or Purchaser Related Party (hereinafter, the
“Indemnified Party”) has received notice of any indemnifiable claim hereunder,
or the commencement of any action or proceeding by a third party, which the
Indemnified Party believes in good faith is an indemnifiable claim under this
Agreement, the Indemnified Party shall give the indemnitor hereunder (the
“Indemnifying Party”) written notice of such claim or the commencement of such
action or proceeding, but failure to so notify the Indemnifying Party will not
relieve the Indemnifying Party from any liability it may have to such
Indemnified Party hereunder except to the extent that the Indemnifying Party is
materially prejudiced by such failure. Such notice shall state the nature and
the basis of such claim to the extent then known.  The Indemnifying Party shall
have the right to defend and settle, at its own expense and by its own counsel
who shall be reasonably acceptable to the Indemnified Party, any such matter as
long as the Indemnifying Party pursues the same diligently and in good faith. If
the Indemnifying Party undertakes to defend or settle, it shall promptly notify
the Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such
cooperation shall include furnishing the Indemnifying Party with any books,
records and other information reasonably requested by the Indemnifying Party and
in the Indemnified Party’s possession or control.  Such cooperation of the
Indemnified Party shall be at the cost of the Indemnifying Party.  After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability; provided, however, that the Indemnified Party shall be entitled (i)
at its expense, to participate in the defense of such asserted liability and the
negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party
has failed to assume the defense or employ counsel reasonably acceptable to the
Indemnified Party or (B) if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and counsel to the Indemnified
Party shall have concluded that there may be reasonable defenses available to
the Indemnified Party that are different from or in addition to those available
to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, then the Indemnified Party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.  Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not settle any indemnified claim without
the consent of the Indemnified Party, unless the settlement thereof imposes no
liability or obligation on, involves no admission of wrongdoing or malfeasance
by, and includes a complete release from liability of, the Indemnified Party.

ARTICLE VIII
MISCELLANEOUS

          Section 8.01     Interpretation.          Article, Section, Schedule,
and Exhibit references are to this Agreement, unless otherwise specified. All
references to instruments, documents, contracts, and agreements are references
to such instruments, documents, contracts, and agreements as the same may be
amended, supplemented, and otherwise modified from time to time, unless

23

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otherwise specified. The word “including” shall mean “including but not limited
to.”  Whenever U.S. Shipping has an obligation under the Basic Documents, the
expense of complying with such obligation shall be an expense of U.S. Shipping
unless otherwise specified therein.  Whenever any determination, consent or
approval is to be made or given by a Purchaser under the Basic Documents, such
action shall be in such Purchaser’s sole discretion unless otherwise specified
therein.  If any provision in the Basic Documents is held to be illegal,
invalid, not binding, or unenforceable, such provision shall be fully severable
and the Basic Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
the Basic Documents, and the remaining provisions shall remain in full force and
effect. The Basic Documents have been reviewed and negotiated by sophisticated
parties with access to legal counsel and shall not be construed against the
drafter.

          Section 8.02     Survival of Provisions.  The representations and
warranties set forth in Sections 3.01, 3.02, 3.04, 3.06(b), 3.07, 3.09, 3.12,
3.13, 3.16, 3.17, 4.01, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08 and 4.09 of this
Agreement shall survive the execution and delivery of this Agreement
indefinitely, and the other representations and warranties set forth in this
Agreement shall survive for a period of twelve (12) months following the Closing
Date regardless of any investigation made by or on behalf of U.S. Shipping or
any Purchaser.  The covenants made in this Agreement or any other Basic Document
shall survive the closing of the transactions described herein and remain
operative and in full force and effect regardless of acceptance of any of the
Purchased Units and payment therefor and repayment, conversion or repurchase
thereof. All indemnification obligations of U.S. Shipping and the Purchasers
pursuant to this Agreement shall remain operative and in full force and effect
unless such obligations are expressly terminated in a writing by the Parties,
regardless of any purported general termination of this Agreement.

          Section 8.03     No Waiver; Modifications in Writing.

 

                         (a)          Delay.  No failure or delay on the part of
any Party in exercising any right, power, or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power, or remedy preclude any other or further exercise thereof or the exercise
of any right, power, or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to a Party at Law or
in equity or otherwise.

 

 

 

                         (b)          Specific Waiver. Except as otherwise
provided herein, no amendment, waiver, consent, modification, or termination of
any provision of this Agreement or any other Basic Document shall be effective
unless signed by each of Parties or each of the original signatories thereto
affected by such amendment, waiver, consent, modification, or termination. Any
amendment, supplement or modification of or to any provision of this Agreement
or any other Basic Document, any waiver of any provision of this Agreement or
any other Basic Document, and any consent to any departure by U.S. Shipping from
the terms of any provision of this Agreement or any other Basic Document shall
be effective only in the specific instance and for the specific purpose for
which made or given.  Except where notice is specifically required by this
Agreement, no notice to or demand on U.S. Shipping in any case shall entitle
U.S. Shipping to any other or further notice or demand in similar or other
circumstances.

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          Section 8.04     Binding Effect; Assignment.

 

                         (a)          Binding Effect. This Agreement shall be
binding upon U.S. Shipping, each Purchaser, and their respective successors and
permitted assigns. Except as expressly provided in this Agreement, this
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the Parties to this Agreement and as provided in Article VII,
and their respective successors and permitted assigns.

 

 

 

                         (b)          Assignment of Purchased Units. All or any
portion of a Purchaser’s Purchased Units purchased pursuant to this Agreement
may be sold, assigned or pledged by such  Purchaser, subject to compliance with
applicable securities Laws, Section 5.06 and the Registration Rights Agreement.

 

 

 

                         (c)          Assignment of Rights. Each Purchaser under
this Agreement may assign all or any portion of its rights hereunder to (i) any
Affiliate of such Purchaser or (ii) in connection with a total return swap or
similar transaction with respect to the Purchased Units purchased by such
Purchaser; provided, in each case, the assignee shall be deemed to be a
Purchaser hereunder with respect to such assigned rights and shall agree to be
bound by the provisions of this Agreement.  Except as expressly permitted by
this Section 8.04(c), such rights may not otherwise be transferred except with
the prior written consent of U.S. Shipping (which consent shall not be
unreasonably withheld).

 

 

 

                         (d)          Limitation on Assignment for U.S.
Citizens.  Any Purchaser that has certified it is a U.S. Citizen (as defined in
the  Admission Application  attached as Exhibit H hereto) in such  Admission
Application may only make an assignment pursuant to this Sections 8.04(b) and
8.04(c) above if the assignee also qualifies as a U.S. Citizen (as defined in
the  Admission Application) or with the prior written consent of U.S. Shipping.

          Section 8.05     Aggregation of Purchased Units.  All Purchased Units
held or acquired by Persons who are Affiliates of one another shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

          Section 8.06     Confidentiality and Non-Disclosure.  Notwithstanding
anything herein to the contrary, each Purchaser that has executed a
confidentiality agreement in favor of U.S. Shipping shall continue to be bound
by such confidentiality agreement in accordance with the terms thereof. 

          Section 8.07     Communications.  All notices and demands provided for
hereunder shall be in writing and shall be given by registered or certified
mail, return receipt requested, telecopy, air courier guaranteeing overnight
delivery, electronic mail or personal delivery to the addresses listed in
Schedule 8.07 of this Agreement or to such other address as U.S. Shipping or
such Purchaser may designate in writing. All notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; at the time of transmittal, if sent via electronic mail; upon actual
receipt if sent by registered or certified mail, return receipt requested, or
regular mail, if mailed; when receipt acknowledged, if sent via telecopy; and
upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.

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          Section 8.08     Removal of Legend.  U.S. Shipping shall remove the
legend described in Section 4.08 from the certificates evidencing the Purchased
Units at the request of a Purchaser submitting to U.S. Shipping such
certificates, together with an opinion of counsel, if required by U.S.
Shipping’s transfer agent, to the effect that such legend is no longer required
under the Securities Act or applicable state securities Laws, as the case may
be, unless U.S. Shipping, with the advice of counsel, reasonably determines that
such removal is inappropriate; provided that no such opinion shall be required
in the event a Purchaser is effecting a sale of such Purchased Units pursuant to
Rule 144 under the Securities Act (unless required by the transfer agent with
respect to such securities) or an effective registration statement. U.S.
Shipping shall cooperate with such Purchaser to effect removal of such legend.

          Section 8.09     Entire Agreement.  This Agreement and the other Basic
Documents are intended by the Parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the Parties hereto and thereto in respect of the subject matter
contained herein and therein.  There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein and therein
with respect to the rights granted by U.S. Shipping or a Purchaser set forth
herein and therein.  This Agreement and the other Basic Documents supersede all
prior agreements and understandings between the Parties with respect to such
subject matter.

          Section 8.10     Governing Law. This Agreement will be construed in
accordance with and governed by the Laws of the State of New York without regard
to principles of conflicts of Laws.

          Section 8.11     Execution in Counterparts.  This Agreement may be
executed in any number of counterparts and by different Parties hereto in
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

          Section 8.12     Termination.

 

                         (a)          Notwithstanding anything herein to the
contrary, this Agreement may be terminated at any time at or prior to the
Closing:

 

 

 

 

                            (i)          by the mutual written consent of the
Purchasers entitled to purchase a majority of the Purchased Units and U.S.
Shipping;

 

 

 

 

 

                            (ii)          by the written consent of the
Purchasers entitled to purchase a majority of the Purchased Units or by U.S.
Shipping, (A) if any representation or warranty of the other party set forth in
this Agreement shall be untrue in any material respect when made, or (B) upon a
breach in any material respect of any covenant or agreement on the part of the
other party set forth in this Agreement (either clause (A) or (B) above being a
“Terminating Breach”); provided, that, each Terminating Breach would cause the
conditions to the non-terminating party’s obligations not to be satisfied and
such Terminating Breach is not cured within 20 days after written notice from
the non-breaching party; or

26

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                            (iii)          by a Purchaser, as to such
Purchaser’s rights and obligations hereunder, if the Closing shall not have
occurred on or prior to August 15, 2006.

 

 

 

 

                         (b)          Notwithstanding anything herein to the
contrary, this Agreement shall automatically terminate at any time at or prior
to the Closing:

 

 

 

 

                            (i)          if a statute, rule, order, decree or
regulation shall have been enacted or promulgated, or if any action shall have
been taken by any Governmental Authority of competent jurisdiction which
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated by this Agreement or makes the
transactions contemplated by this Agreement illegal;

 

 

 

 

 

                            (ii)          if the Closing shall not have occurred
on or before September 30, 2006; or

 

 

 

 

 

                            (iii)          pursuant to Section 2.04.

 

 

 

 

                         (c)          In the event of the termination of this
Agreement as provided in Sections 8.12(a) or 8.12(b), this Agreement shall
forthwith become null and void.  In the event of such termination, there shall
be no liability on the part of any party hereto, except as set forth in Article
VII of this Agreement and except with respect to the requirement to comply with
any confidentiality agreement in favor of U.S. Shipping; provided that nothing
herein shall relieve any party from any liability or obligation with respect to
any willful breach of this Agreement.

          Section 8.13     Expenses. U.S. Shipping hereby covenants and agrees
to reimburse Baker Botts L.L.P., for reasonable and documented legal fees not to
exceed $35,000.  If any action at law or equity is necessary to enforce or
interpret the terms of the Basic Documents, the prevailing party shall be
entitled to reasonable attorney’s fees, out-of-pocket costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.

          Section 8.14     Recapitalization, Exchanges, Etc. Affecting the
Purchased Units.  The provisions of this Agreement shall apply to the full
extent set forth herein with respect to any and all units of U.S. Shipping or
any successor or assign of U.S. Shipping (whether by merger, consolidation, sale
of assets or otherwise) which may be issued in respect of, in exchange for or in
substitution of, the Purchased Units, and shall be appropriately adjusted for
combinations, recapitalizations and the like occurring after the date of this
Agreement.

27

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          IN WITNESS WHEREOF, the Parties hereto execute this Agreement,
effective as of the date first above written.

 

U.S. SHIPPING PARTNERS L.P.

 

 

 

 

 

By:

US Shipping General Partner LLC

 

 

its General Partner

 

 

 

 

 

 

 

By:

/s/

 

 

--------------------------------------------------------------------------------

Signature Page to
Common Unit and Class B Purchase Agreement

--------------------------------------------------------------------------------

Schedule 2.01

Attached hereto

Schedule 2.01

--------------------------------------------------------------------------------

Schedule 2.01(d)

Escrow Purchasers

1.

Sterling Partners

 

 

2.

Aetna

 

 

3.

Paul Gridley

 

 

4.

Joseph Gehegan

 

 

5.

Albert Bergeron

 

 

6.

Alan Colletti

 

 

7.

Jeffrey Miller

 

 

8.

Ray Marquardt

 

 

9.

William Young

 

 

10.

F Dematteis 2001 Trst 7/12/01

 

 

11.

Dematteis FLP Assets LLC

 

 

12.

The Ronald L Gallatin Rev Tr Dtd 05/26/2004

 

 

13.

Goldman Associates

 

 

14.

Peter Halstead Trust

 

 

15.

Cathy Halstead Trust

 

 

16.

Eliza Finkelstein Trust

 

 

17.

Jennifer Finkelstein Trust

 

 

18.

Stanley Sirote

 

 

19.

Langer Investment Partnership

 

 

20.

Eileen Goldman

 

 

21.

Michael Goldman

 

 

22.

John D Case

 

 

23.

JT Serko LP

Schedule 2.01(d)

--------------------------------------------------------------------------------

Schedule 8.07

Notice and Contact Information

If to U.S. Shipping Partners L.P.

 

with a copy to:

 

 

 

399 Thornall St., 8th Floor

 

Roy L. Goldman

Edison, NJ  08837

 

Fulbright & Jaworski L.L.P.,

Attention:

 

666 Fifth Avenue, New York,

Facsimile:

 

New York 10103

 

 

 

If to Alerian Capital Partners LP, Alerian Opportunity Partners II LP or Alerian
Focus Partners LP

 

with a copy to:

 

 

 

c/o Alerian Capital Management LLC

 

Baker Botts L.L.P.

45 Rockefeller Plaza, Suite 2000

 

1500 San Jacinto Center

New York, NY  10111-0100

 

98 San Jacinto Blvd.

Attention:  Robert Kad

 

Austin, Texas 78701

Phone: (212) 332-7810

 

Phone: (512) 322.2556

Facsimile:  (212) 332-7806

 

Facsilie (512) 322.8377

 

 

Attention: Laura L. Tyson

 

 

laura.tyson@bakerbotts.com

 

 

 

If to Credit Suisse Management LLC:

 

with a copy to:

 

 

 

Credit Suisse Management LLC

 

 

One Madison Ave

 

 

New York, NY 10010

 

 

Attention:     Jerrold Gordon, 2nd floor

 

 

 

 

 

If to EGI-Fund (05-07) Investors, L.L.C.:

 

with a copy to:

 

 

 

c/o Equity Group Investments, L.L.C.

 

 

Two N. Riverside Plaza, Suite 600

 

 

Chicago, IL 60606

 

 

Facsimile (312) 454-0335

 

 

Attention:  Nils Larsen and Joseph M. Paolucci

 

 

jpaolucci@egii.com and nlarsen@egii.com

 

 

 

 

 

Schedule 8.07-1

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If to Fiduciary/Claymore MLP Opportunity Fund or Energy Income and Growth Fund:

 

with a copy to:

 

 

 

c/o Fiduciary Asset Management

 

Vinson & Elkins LLP

8112 Maryland Avenue, Suite 400

 

First City Tower

St. Louis MO 63105

 

1001 Fannin Street, Suite 2300

Attention:  Jim Cunnane

 

Houston, Texas 77002-6760

Facsimile:  (314) 863-4360

 

Phone: (713) 758.4618

 

 

Facsimile:  (713) 615.5038

 

 

Attention:  Thomas P.  Mason

 

 

tmason@velaw.com

 

 

 

 

 

 

If to GPS Income Fund LP, GPS High Yield Equity Fund LP, GPS Income Fund
(Cayman) Ltd or HFR RVA GPS Master Trust:

 

 

 

 

 

GPS Partners LLC

 

 

100 Wilshire Blvd

 

 

Suite 900

 

 

Santa Monica, Ca 90401

 

 

Attention: Brett Messing

 

 

Phone: (310) 496-5360

 

 

Facsimile: (310) 496-5399

 

 

Investments@Gpsfund.Com

 

 

 

 

 

If to RBC Capital Markets Corporation:

 

 

 

 

 

Joe Muskatel

 

 

Director and Senior Counsel

 

 

RBC Capital Markets

 

 

One Liberty Plaza

 

 

165 Broadway, 2d floor

 

with a copy to:

NY NY 10006

 

 

Phone: (212) 858-7492

 

 

Facsimile: (212) 428-3062

 

 

joe.muskatel@rbccm.com

 

 

 

 

 

If to Structured Finance Americas, LLC:

 

with a copy to:

 

 

 

 

Alfiya Hainutdzinava

 

 

 

60 Wall Street

 

 

 

MailStop: NYC60-1408

 

 

 

New York, NY 10005

 

 

 

Phone: (212) 250-5862

 

 

 

Alfiya.Hainutdzinava@db.com

 

 

Schedule 8.07-2

--------------------------------------------------------------------------------

 

Elia Kourtesiadou

 

 

 

60 Wall Street

 

 

 

MailStop: NYC60-1408

 

 

 

New York, NY 10005

 

 

 

Phone: (212) 250-8317

 

 

 

Elia.Kourtesiadou@db.com

 

 

 

 

 

 

 

Jill Rathjen

 

 

 

60 Wall Street

 

 

 

New York, NY 10005

 

 

 

Mail Stop: NYC60-0443

 

 

 

Phone: (212) 250-4990

 

 

 

jill.rathjen@db.com

 

 

 

 

 

If to UBS Securities LLC

 

with a copy to:

 

 

 

UBS Securities LLC

 

 

677 Washington Boulevard

 

 

Samford, CT 06901

 

 

Attention:  Christopher Coward, Director

 

 

chris.coward@ubs.com

 

 

 

 

 

If to ZLP Fund LP:

 

 

 

 

 

John Lee

 

 

10 Harborside Financial Center, Suite 301

 

 

Jersey City, NJ 07311

 

 

Phone: (201) 716-1401

 

 

lee@zimmerlucas.com

 

 

 

 

 

If to

F Dematteis 2001 Trst 7/12/01;

 

 

 

Dematteis FLP Assets LLC;

 

 

 

The Ronald L Gallatin Rev Tr Dtd 05/26/2004;

 

 

 

Goldman Associates;

 

 

 

Peter Halstead Trust;

 

 

 

Cathy Halstead Trust;

 

 

 

Eliza Finkelstein Trust;

 

 

 

Jennifer Finkelstein Trust;

 

 

 

Stanley Sirote;

 

 

 

Langer Investment Partnership;

 

 

 

Eileen Goldman;

 

 

 

Michael Goldman;

 

 

 

John D Case; or

 

 

 

JT Serko LP:

 

 

Schedule 8.07-3

--------------------------------------------------------------------------------

Ken Witover

 

 

399 Park Avenue 06 Floor

 

 

NY, NY 10022

 

 

Phone: (212) 528-1131

 

 

kwitover@lehman.com 

 

 

Schedule 8.07-4

--------------------------------------------------------------------------------

Exhibit A

Form of Class B Amendment

[to come]

Exhibit A

--------------------------------------------------------------------------------

Exhibit B

U.S. SHIPPING PARTNERS L.P.

Officer’s Certificate

                    Pursuant to Section 6.02(e) of the Common Unit and Class B
Unit Purchase Agreement, dated as of August 4, 2006 (the “Purchase Agreement”),
by and among U.S. Shipping Partners L.P., a Delaware limited partnership (“U.S.
Shipping”), and the Purchasers listed in Schedule 2.01 of the Purchase Agreement
(each a “Purchaser” and collectively, the “Purchasers”) relating to the issuance
and sale by U.S. Shipping to the Purchasers of an aggregate of aggregate of
1,310,375 Common Units representing limited partner interests in U.S. Shipping
and an aggregate of 3,123,205 Class B Units representing limited partner
interests in U.S. Shipping, the undersigned hereby certifies on behalf of U.S.
Shipping, as follows:

          (A)          U.S. Shipping has performed and complied with the
covenants and agreements contained in the Purchase Agreement that are required
to be performed and complied with by U.S. Shipping on or prior to the date
hereof;

          (B)          The representations and warranties of U.S. Shipping
contained in the Purchase Agreement that are qualified by materiality or U.S.
Shipping Material Adverse Effect (as defined in the Purchase Agreement) are true
and correct as of the date of the Purchase Agreement and as of the date hereof
and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the date
hereof, except that representations made as of a specific date are true and
correct as of such date only;

          (C)          Since the date of the Purchase Agreement, no U.S.
Shipping Material Adverse Effect (as defined in the Purchase Agreement) has
occurred and is continuing; and

          (D)          The Class B Amendment (as defined in the Purchase
Agreement) has been adopted in all material respects in the form attached as
Exhibit A to the Purchase Agreement.

Dated:  August 7, 2006

 

U.S. SHIPPING PARTNERS L.P.

 

 

 

 

 

By:

US Shipping General Partner LLC

 

 

its General Partner

 

 

 

 

 

 

 

By:

/s/

 

 

--------------------------------------------------------------------------------

Exhibit B

--------------------------------------------------------------------------------

Exhibit C

          Capitalized terms used but not defined herein have the meaning
assigned to such terms in the Common Unit and Class B Unit Purchase Agreement,
dated as of August 4, 2006  (the “Purchase Agreement”).  U.S. Shipping shall
furnish to the Purchasers at the Closing an opinion of Fulbright & Jaworski
L.L.P., counsel for U.S. Shipping, addressed to the Purchasers and dated the
Closing Date in form satisfactory to Baker Botts L.L.P., counsel for the
Purchasers, stating that:

          (a)          U.S. Shipping: (i) is a limited partnership duly
organized, validly existing and in good standing under the Laws of the State of
Delaware; (ii) is duly qualified to conduct business in the State of New Jersey
and (iii) has all requisite limited partnership power and authority necessary to
own its Properties and carry on its business as its business is now being
conducted as described in the U.S. Shipping SEC Documents.

          (b)          As of the date hereof, and prior to the sale and issuance
of the Purchased Units as contemplated by the Purchase Agreement, the issued and
outstanding limited partner interests of U.S. Shipping consist of 6,899,968
Common Units, 6,899,968 Subordinated Units and the Incentive Distribution
Rights.  All of the outstanding Common Units, Subordinated Units and Incentive
Distribution Rights have been duly authorized and validly issued and are fully
paid (to the extent required by applicable Law and the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the Delaware LP Act).

          (c)          To our knowledge, except as described in the U.S.
Shipping SEC Documents filed prior to the date hereof, for options granted
pursuant to U.S. Shipping’s LTIP, or as contemplated by the Purchase Agreement,
there are no outstanding or authorized (i) options, warrants, preemptive rights,
subscriptions, calls, convertible securities or other rights, agreements or
commitments of any character obligating U.S. Shipping or any of its Subsidiaries
to issue, transfer or sell any limited partner interests or other equity
interest in U.S. Shipping or any of its Subsidiaries or securities convertible
into or exchangeable for such limited partner interests or other equity
interests, (ii) obligations of U.S. Shipping or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any limited partner interests or other
equity interests in U.S. Shipping or any of its Subsidiaries or any such
securities or agreements listed in clause (i) of this sentence or (iii) voting
trusts or similar agreements to which U.S. Shipping or any of its Subsidiaries
is a party with respect to the voting of the equity interests of U.S. Shipping
or any of its Subsidiaries, other than pursuant to the pledge of units or shares
of its Subsidiaries to its lenders. 

          (d)          All of the issued and outstanding equity interests of
each of U.S. Shipping’s Subsidiaries are owned, directly or indirectly, by U.S.
Shipping free and clear of any Liens (A) in respect of which a financing
statement under the Uniform Commercial Code naming U.S. Shipping as debtor is on
file in the office of the Secretary of State of the State of Delaware or (B)
otherwise known to us without independent investigation, other than those
created under applicable Law and except for such Liens as may be imposed under
U.S. Shipping’s Second Amended and Restated Credit Agreement and such Liens as
may be imposed under the Amended Credit Facility, and all such ownership
interests have been duly authorized and validly issued

Exhibit C-1

--------------------------------------------------------------------------------

and are fully paid (to the extent required by applicable Law and in the
organizational documents of such Subsidiaries) and non-assessable (except as
nonassessability may be affected by matters described in Sections 17-303, 17-607
and 17-804 of the Delaware LP Act or Sections 18-607 and 18-804 of the Delaware
LLC Act, as applicable, or the organizational documents of such  Subsidiaries)
and free of preemptive rights.

          (e)          The Purchased Units and the limited partner interests
represented thereby, have been duly authorized by U.S. Shipping and, when issued
and delivered to the Purchasers against payment therefor in accordance with the
terms of the Purchase Agreement, will be validly issued, fully paid (to the
extent required by applicable Law and the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the Delaware LP Act). 

          (f)          The Common Units issuable upon conversion of the Class B
Units, and the limited partner interests represented thereby, upon issuance in
accordance with the terms of the Class B Units as reflected in the Partnership
Agreement, as amended by the Class B Amendment, have been duly authorized by
U.S. Shipping pursuant to the Partnership Agreement and will be fully paid (to
the extent required by applicable Law and the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections
17-303, 17-607 and 17-804 of the Delaware LP Act) and, subject to receipt of the
required Unitholder approval, will be validly issued.

          (g)          None of the offering, issuance and sale by U.S. Shipping
of the Purchased Units or the execution, delivery and performance of the Basic
Documents by U.S. Shipping (A) constitutes or will constitute a violation of
U.S. Shipping’s Certificate of Formation or Partnership Agreement or any
organizational documents of any of U.S. Shipping’s Subsidiaries, (B) without
duplication of clause (A), constitutes or will constitute a breach or violation
of, or a default under (or an event which, with notice or lapse of time or both,
would constitute such an event), any agreement filed as an exhibit to the U.S.
Shipping SEC Documents, or (C) results or will result in any violation of the
Delaware LP Act, the Delaware LLC Act, the DGCL, the Laws of the State of New
York or U.S. federal Law (except maritime Law, as to which such counsel need not
express any opinion), which in the case of clause (B) or (C) of this paragraph
(g) would be reasonably expected to have a U.S. Shipping Material Adverse
Effect; provided, however, that no opinion is expressed pursuant to this
paragraph (g) with respect to federal or state securities or anti-fraud
statutes, rules or regulations.

          (h)          Each of the Purchase Agreement, the Registration Rights
Agreement and the Class B Amendment  has been duly authorized and validly
executed and delivered on behalf of U.S. Shipping, and is enforceable against
U.S. Shipping in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and
similar Laws affecting creditors’ rights generally or by general principles of
equity, including principles of commercial reasonableness, fair dealing and good
faith.

          (i)          Except for the approvals required by the Commission in
connection with U.S. Shipping’s obligations under the Registration Rights
Agreement and under the registration rights agreement entered into in connection
with the Notes Offering, no authorization, consent, approval, waiver, license,
qualification or written exemption from, nor any filing, declaration,

Exhibit C-2

--------------------------------------------------------------------------------

qualification or registration with, any Governmental Authority or any other
Person is required in connection with the execution, delivery or performance by
U.S. Shipping of any of the Basic Documents to which it is a party, except (i)
those that have been obtained or may be required under the state securities or
“Blue Sky” Laws or under maritime Laws, in each case, as to which such counsel
need not express any opinion, or (ii) for such consents which, if not obtained,
would not, individually or in the aggregate, have a U.S. Shipping Material
Adverse Effect.

          (j)          U.S. Shipping is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

          (k)          Assuming the accuracy of the representations and
warranties of each Purchaser contained in the Purchase Agreement, the issuance
and sale of the Purchased Units pursuant to the Purchase Agreement is exempt
from registration requirements of the Securities Act of 1933, as amended.

Exhibit C-3

--------------------------------------------------------------------------------

Exhibit D

Form of Registration Rights Agreement

[to come]

Exhibit D

--------------------------------------------------------------------------------

Exhibit E

PURCHASER’S OFFICER’S CERTIFICATE

Officer’s Certificate

                          Pursuant to Section 6.03(d) of the Common Unit and
Class B Unit Purchase Agreement, dated as of August 4, 2006 (the “Purchase
Agreement”) by and among U.S. Shipping Partners L.P., a Delaware limited
partnership (“U.S. Shipping”), and the Purchasers listed in Schedule 2.01 to the
Purchase Agreement (each a “Purchaser” and collectively, the “Purchasers”) and
relating to the issuance and sale by U.S. Shipping to the Purchasers of an
aggregate of 1,310,375 Common Units representing limited partner interests in
U.S. Shipping and an aggregate of 3,123,205 Class B Units representing limited
partner interests in U.S.  Shipping, each of the undersigned hereby certifies
solely on behalf of itself, as follows:

          (A)          Such Purchaser has performed and complied with the
covenants and agreements contained in the Purchase Agreement that are required
to be performed and complied with by such Purchaser on or prior to the date
hereof.

          (B)          The representations and warranties of such Purchaser
contained in the Purchase Agreement that are qualified by materiality or
Purchaser Material Adverse Effect (as defined in the Purchase Agreement) are
true and correct as of the date of the Purchase Agreement and as of the date
hereof and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the date
hereof, except that representations made as of a specific date are true and
correct as of such date only.

          (C)          Since the date of the Purchase Agreement, no Purchaser
Material Adverse Effect (as defined in the Purchase Agreement) has occurred and
is continuing.

Dated:  August 7, 2006

 

[PURCHASER]

 

 

 

 

 

By:

/s/

 

 

--------------------------------------------------------------------------------

 

 

[Name]

 

 

[Title]

Exhibit E

--------------------------------------------------------------------------------

Exhibit F

PURCHASER’S ELIGIBILITY REPRESENTATIONS

                    Please indicate the applicable category of “accredited
investor” within the meaning of Rule 501 under the Securities Act, under which
the undersigned Purchaser is qualified to purchase Purchased Units, under either
Section A or B below and complete the information requested in Section C below. 
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Common Unit and Class B Unit Purchase Agreement, dated as
of August 4, 2006,  by and among U.S. Shipping Partners L.P., a Delaware limited
partnership, and the Purchasers included in Schedule 2.01 thereto.

          A.         ACCREDITED INVESTOR STATUS FOR ENTITIES

 

1.

o

We are either: a bank as defined in Section 3(a)(2) of the Securities Act acting
in its individual or fiduciary capacity; a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act acting in its
individual or fiduciary capacity; a broker-dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934; an insurance company as defined in
Section 2(13) of the Securities Act; an investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of the Investment Company Act of 1940; a small business
investment company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; an employee
benefit plan within the meaning of Title I of the employee Retirement Income
Security Act of 1974 (“ERISA”) and (i) the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings
and loan association, insurance company or registered investment adviser, or
(ii) the employee benefit plan has total assets over $5,000,000, or (iii) the
employee benefit plan is self directed and its investment decisions are made
solely by persons that are accredited investors; or a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, and such plan has total assets in excess of $5,000,000.

 

 

 

 

 

2.

o

We are a private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940.

 

 

 

 

 

3.

o

We are an organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or similar business trust, or a
partnership, not formed for the specific purpose of acquiring Purchased Units,
with total assets in excess of $5,000,000.

 

 

 

 

 

4.

o

We are a trust with total assets in excess of $5,000,000 that was not formed for
the specific purpose of purchasing Purchased Units and whose purchase is
directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
investing in U.S. Shipping.

 

 

 

 

 

5.

o

We are an entity in which all of the equity owners are accredited investors.

Exhibit F-1

--------------------------------------------------------------------------------

          B.         ACCREDITED INVESTOR STATUS FOR INDIVIDUALS

 

1.

o

I am a director or executive officer of U.S. Shipping.

 

 

 

 

 

2.

o

I am a natural person and have a net worth, either alone or with my spouse, of
more than $1,000,000.

 

 

 

 

 

3.

o

I am a natural person and had income in excess of $200,000 during each of the
previous two years and reasonably expect to have income in excess of $200,000
during the current year, or joint income with my spouse in excess of $300,000
during each of the previous two years and reasonably expect to have joint income
in excess of $300,000 during the current year.

          C.         INFORMATION REQUESTED

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Name of Purchaser

 

Name of Joint Purchaser, if applicable

(Please print. Please indicate name and capacity of person signing above if the
Purchaser is other than a natural person.)

 

(Please indicate name and capacity of person signing above if the Purchaser is
other than a natural person.)

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

Name in which Purchased Units are to be registered (if different)

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

Email Address

 

 

 

If the Purchaser is a natural person, the investor’s State/Province of residence
is:

 

 

--------------------------------------------------------------------------------

If there are joint Purchasers, please check one:

o

Joint Tenants with Rights of Survivorship

o

Tenants-in-Common

o

Community Property

 

If the Purchaser is other than a natural person, it:

•

is the following type of organization: _____________.

•

is organized under the laws of: ______________.

•

has its principal place of business in ______________.

Exhibit F-2

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Purchaser’s Social Security Number or EIN

 

Joint Purchaser’s Social Security Number or EIN

 

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Mailing Address-Street

 

Mailing Address-Street (if different)

 

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

City, State, Zip

 

City, State, Zip

 

 

 

 

 

 

Attn.: _______________________________________

 

Attn.: _______________________________________

 

 

 

 

 

 

Telephone No.: _______________________________

 

Telephone No.: _______________________________

 

 

 

 

 

 

Facsimile No.: ________________________________

 

Facsimile No.: ________________________________

Exhibit F-3

--------------------------------------------------------------------------------

Exhibit G

Escrow Agreement

Attached

Exhibit G

--------------------------------------------------------------------------------

Exhibit H

APPLICATION FOR ADMISSION

          The undersigned (“Purchaser”) (a) requests admission as an Additional
Limited Partner and agrees to comply with and be bound by, and hereby executes,
the Amended and Restated Agreement of Limited Partnership of U.S. Shipping
Partners L.P. (the “Partnership”), as amended, supplemented or restated to the
date hereof (the “Partnership Agreement”), (b) represents and warrants that the
Purchaser has all right, power and authority and, if an individual, the capacity
necessary to enter into the Partnership Agreement, (c) appoints the General
Partner of the Partnership and, if a Liquidator shall be appointed, the
Liquidator of the Partnership as the Purchaser’s attorney-in-fact to execute,
swear to, acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited
Partnership of the Partnership and any amendment thereto, necessary or
appropriate for the Purchaser’s admission as an Additional Limited Partner and
as a party to the Partnership Agreement, (d) gives the powers of attorney
provided for in the Partnership Agreement, and (e) makes the waivers and gives
the consents and approvals contained in the Partnership Agreement. Capitalized
terms not defined herein have the meanings assigned to such terms in the
Partnership Agreement.  

Date: _______________________

 

 

 

 

 

 

 

/s/            

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Social Security or other identifying number

 

Signature of Purchaser

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Purchase Price including commissions, if any

 

Name and Address of Purchaser

 

Type of Entity (check one):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

o

Individual

 

o

Partnership

 

o

Corporation

 

 

 

 

 

 

 

 

 

 

o

Trust

 

o

Other (specify)

 

 

 

 

 

 

 

 

 

 

 

 

Nationality (for taxationpurposes) (check one):

 

 

 

 

 

 

 

 

 

 

 

 

o

U.S. Citizen, Resident or Domestic Entity

 

 

 

 

 

 

 

 

 

 

 

 

o

Foreign Corporation

 

o

Non-resident Alien

 

 

 

If the U.S. Citizen, Resident or Domestic Entity box is checked, Certification
B-1 must be completed.

          Under Section 1445(e) of the Internal Revenue Code of 1986, as amended
(the “Code”), the Partnership must withhold tax with respect to certain
transfers of property if a holder of an interest in the Partnership is a foreign
person.  To inform the Partnership that no withholding is required with respect
to the undersigned interestholder’s interest in it, the undersigned hereby
certifies as set forth in B-1 (or, if applicable, certifies the following on
behalf of the interestholder).

Citizenship (for Maritime purposes—see Maritime Citizenship definitions below)
(check one):

 

o

Citizen of the United States

Exhibit H-1

--------------------------------------------------------------------------------

 

o

Citizen of the United States

If a Citizen of the United States box is checked, Certification B-2 must be
completed.

Under Part 67 of Title 46 of the Code of Federal Regulations (CFR), the
undersigned is deemed and defined a “Citizen of the United States” (for maritime
purposes) if at all tiers of ownership and in both form and substance at each
tier of ownership:

 

(a)

If the undersigned is an individual:

 

   

 

 

          (i)          who is a citizen of the United States, by birth,
naturalization, as a derivative citizen or as otherwise authorized by law, and

 

   

 

 

          (ii)         who is (x) free and clear of any trust or fiduciary
obligation in favor of, or control, directly or indirectly, by, non-Citizens of
the United States and (y) not employed by or financially dependent on a
non-Citizen of the United States which is affiliated or associated in any manner
with the Partnership or any partner thereof; or

 

   

 

 

(b)

If the undersigned is a corporation:

 

   

 

 

          (i)          that is organized or incorporated under the laws of the
United States, or of a state of the United States or a political subdivision
thereof, Guam, Puerto Rico, the Virgin Islands, American Samoa, the District of
Columbia, the Northern Mariana Islands, or any other territory or possession of
the United States (each a “State”),

 

   

 

 

          (ii)          of which title to not less than 75% of its stock
interest is beneficially owned by and vested in Persons who are Citizens of the
United States, as defined under the relevant clause (a)–(g) of this definition
of “Citizen of the United States,” free and clear of any trust or fiduciary
obligation of any non-Citizens of the United States,

 

   

 

 

          (iii)          of which not less than 75% of the voting power of the
stock of such corporation entitled to vote is beneficially owned by and vested
in Citizens of the United States, as defined under the relevant clause (a)–(g)
of this definition of “Citizen of the United States,” free from any contract or
understanding through which it is arranged that such voting power may be
exercised directly or indirectly on behalf of non-Citizens of the United States,

 

   

 

 

          (iv)          of which there are no other means by which direct or
indirect control is conferred upon or permitted to be exercised by non-Citizens
of the United States,

 

   

 

 

          (v)          whose chief executive officer (by whatever title),
chairman of the board of directors and all officers authorized to act in the
absence or disability of such Persons or otherwise dispose of or control any
vessel are Citizens of the United States, and

 

   

 

 

          (vi)          of which not more than a minority of the number of
directors (or equivalent Persons) necessary to constitute a quorum are
non-Citizens of the United States; or

 

   

 

 

(c)

If the undersigned is a partnership:

 

   

 

 

 

(i)

that is organized under the laws of the United States or of a State,

 

   

 

 

 

(ii)

all general partners of which are Citizens of the United States, as defined
under the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

 

   

 

 

 

(iii)

of which not less than a 75% equity interest and voting power is beneficially
owned by and vested in, Persons who are Citizens of the United States, as
defined under the relevant clause (a)–(g) of this definition of “Citizen of the
United States,” free and clear

Exhibit H-2

--------------------------------------------------------------------------------

   

 

of any trust or fiduciary obligation in favor of any non-Citizens of the United
States and free from any contract or understanding through which it is arranged
that such voting power may be exercised directly or indirectly on behalf of
non-Citizens of the United States, and

   

 

 

   

(iv)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States; or

   

 

 

 

(d)

If the undersigned is an association:

   

 

 

   

(i)

that is organized under the laws of the United States or of a State,

   

 

 

   

(ii)

of which 100% of the members are Citizens of the United States, as defined under
the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

   

 

 

   

(iii)

whose chief executive officer (by whatever title), chairman of the board of
directors (or equivalent committee or body) and all Persons authorized to act in
the absence or disability of such Persons or otherwise dispose of or control any
vessel are citizens of the United States,

   

 

 

   

(iv)

of which not less than 75% of the interest and voting power of such association
is owned by and vested in Citizens of the United States, free and clear of any
trust or fiduciary obligation in favor of any non-Citizens of the United States,
and free from any contract or understanding through which it is arranged that
such voting power may be exercised directly or indirectly on behalf of
non-Citizens of the United States,

   

 

 

   

(v) 

of which not more than a minority of the number of directors (or equivalent
Persons) necessary to constitute a quorum are non-Citizens of the United States,
and

   

 

 

   

(vi)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States; or

   

 

 

 

(e)

If the undersigned is a limited liability company:

   

 

 

   

            (i)          that is organized under the laws of the United States
or of a State,

   

 

 

   

            (ii)          of which 75% of the members are Citizens of the United
States,

   

 

 

   

            (iii)          of which not less than 75% of the membership interest
is beneficially owned by, and vested in Persons who are Citizens of the United
States, as defined under the relevant clause (a)-(g) of this definition of
“Citizen of the United States,”

   

 

 

   

            (iv)          whose chief executive officer (by whatever title),
chairman of the board of directors (or equivalent committee or body) and all
Persons authorized to act in the absence or disability of such Persons or
otherwise dispose of or control any vessel are citizens of the United States,

   

 

 

   

            (v)          of which not less than 75% of the voting power of such
company entitled to vote is vested in Citizens of the United States, free and
clear of any trust or fiduciary obligation, in favor of or on behalf of any
non-Citizens of the United States, and free from any contract or understanding
through which it is arranged that such voting power may be exercised directly or
indirectly on behalf of non-Citizens of the United States,

   

 

 

   

            (vi)          of which the managing member or manager (or equivalent
Person), if such company’s management is delegated to a single manager or
managing member pursuant to its

Exhibit H-3

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organizational agreement, is a citizen of the United States, or, if such
company’s management is conferred by its organizational agreement on several
managers, a management committee or board of directors (or equivalent governing
body), each manager having general management authority is a citizen of the
United States and not more than a minority of the number of management committee
members or directors (or equivalent Persons) necessary to constitute a quorum of
such governing body are non-Citizens of the United States,

 

 

 

            (vii)          of which there are no other means by which direct or
indirect control is conferred upon or permitted to be exercised by non-Citizens
of the United States, and

 

 

 

            (viii)          of which non-Citizens of the United States do not
have authority within a management group, whether through veto power, combined
voting, or otherwise, to exercise control over the limited liability company; or

 

 

 

(f)          If the undersigned is a joint venture (if not an association or a
partnership):

 

 

 

            (i)          that is organized under the laws of the United States
or of a State,

 

 

 

            (ii)          of which 100% of the members are, or 100% of the
equity is beneficially owned by and vested in, Citizens of the United States, as
defined under the relevant clause (a)-(g) of this definition of “Citizen of the
United States,” free and clear of any trust or fiduciary obligation in favor of
any non-Citizens of the United States, and

 

 

 

            (iii)         of which there are no other means by which direct or
indirect control is conferred upon or permitted to be exercised by non-Citizens
of the United States; or

 

 

 

(g)          If the undersigned is a trust:

 

 

 

            (i)          that is domiciled in and existing under the laws of the
United States or a State,

 

 

 

            (ii)          all of the trustees of which are Citizens of the
United States, as defined under the relevant clause (a)-(g) of this definition
of “Citizen of the United States,”

 

 

 

            (iii)          of which not less than 75% of the equity interest is
owned by Citizens of the United States, as defined under the relevant clause
(a)-(g) of this definition of “Citizen of the United States,”

 

 

 

            (iv)          of which each beneficiary with an enforceable interest
in the trust is a Citizen of the United States, as defined under the relevant
clause (a)-(g) of this definition of “Citizen of the United States,” and

 

 

 

            (v)          of which there are no other means by which direct or
indirect control is conferred upon or permitted to be exercised by non-Citizens
of the United States.

Exhibit H-4

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Certification B-1

Complete Either A or B:

A.

Individual Interestholder

 

 

 

1.

I am not a non-resident alien for purposes of U.S. income taxation.

 

 

 

 

2.

My U.S. taxpayer identification number (Social Security Number) is ____________.

 

 

 

 

3.

My home address is________________________________________.

 

 

 

B.

Partnership, Corporation or Other Interestholder

 

 

 

1.

________________is not a foreign corporation, foreign partnership, foreign trust
(Name of Interestholder) or foreign estate (as those terms are defined in the
Code and Treasury Regulations).

 

 

 

 

2.

The interestholder’s U.S. employer identification number is ______________.

 

 

 

 

3.

The interestholder’s office address and place of incorporation (if applicable)
is _____________.

 

 

 

          The interestholder agrees to notify the Partnership within sixty (60)
days of the date the interestholder becomes a foreign person.

 

          The interestholder understands that this certificate may be disclosed
to the Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.

 

          Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if applicable, I further declare that I have authority to sign
this document on behalf of:

 

 

 

 

--------------------------------------------------------------------------------

 

Name of Purchaser

 

 

 

/s/            

 

--------------------------------------------------------------------------------

 

Signature and Date

 

 

 

 

 

--------------------------------------------------------------------------------

 

Title (if applicable)

          Note:  If the Purchaser is a broker, dealer, bank, trust company,
clearing corporation, other nominee holder or an agent of any of the foregoing,
and is holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function.  If the Purchaser is a broker, dealer, bank, trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Purchaser will hold the Units shall
be made to the best of the Purchaser’s knowledge.

Exhibit H-5

--------------------------------------------------------------------------------

Certification B-2

Complete Either A or B or C:

(a)

Individual Interestholder:

 

 

 

I certify that I qualify as a Citizen of the United States (as defined in the
Application for Admission to which this Certification is attached) because I am
an individual:

 

 

 

(i)

who is a citizen of the United States, by birth, naturalization, as a derivative
citizen or as otherwise authorized by law, and

 

 

 

 

(ii)

who is (x) free and clear of any trust or fiduciary obligation in favor of, or
control, directly or indirectly, by, non-Citizens of the United States and (y)
not employed by or financially dependent on a non-Citizen of the United States
which is affiliated or associated in any manner with the Partnership or any
partner thereof.

 

 

 

(b)

Corporation:

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is a corporation:

 

 

 

 

(i)

that is organized or incorporated under the laws of the United States, or of a
state of the United States or a political subdivision thereof, Guam, Puerto
Rico, the Virgin Islands, American Samoa, the District of Columbia, the Northern
Mariana Islands, or any other territory or possession of the United States (each
a “State”),

 

 

 

 

(ii)

of which title to not less than 75% of its stock interest is beneficially owned
by and vested in Persons who are Citizens of the United States, as defined under
the relevant clause (a)–(g) of this definition of “Citizen of the United
States,” free and clear of any trust or fiduciary obligation of any non-Citizens
of the United States,

 

 

 

 

(iii)

of which not less than 75% of the voting power of the stock of such corporation
entitled to vote is beneficially owned by and vested in Citizens of the United
States, as defined under the relevant clause (a)–(g) of this definition of
“Citizen of the United States,” free from any contract or understanding through
which it is arranged that such voting power may be exercised directly or
indirectly on behalf of non-Citizens of the United States,

 

 

 

 

(iv)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States,

 

 

 

 

(v)

whose chief executive officer (by whatever title), chairman of the board of
directors and all officers authorized to act in the absence or disability of
such Persons or otherwise dispose of or control any vessel are Citizens of the
United States, and

 

 

 

 

(vi)

of which not more than a minority of the number of directors (or equivalent
Persons) necessary to constitute a quorum are non-Citizens of the United States.

 

 

 

(c)

Partnership:

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is a partnership:

 

 

 

 

(i)

that is organized under the laws of the United States or of a State,

Exhibit H-6

--------------------------------------------------------------------------------

 

(ii)

all general partners of which are Citizens of the United States, as defined
under the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

 

 

 

 

(iii)

of which not less than a 75% equity interest and voting power is beneficially
owned by and vested in, Persons who are Citizens of the United States, as
defined under the relevant clause (a)–(g) of this definition of “Citizen of the
United States,” free and clear of any trust or fiduciary obligation in favor of
any non-Citizens of the United States and free from any contract or
understanding through which it is arranged that such voting power may be
exercised directly or indirectly on behalf of non-Citizens of the United States,
and

 

 

 

 

(iv)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States.

 

 

 

(d)

Association:

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is an association:

 

 

 

 

(i)

that is organized under the laws of the United States or of a State,

 

 

 

 

(ii)

of which 100% of the members are Citizens of the United States, as defined under
the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

 

 

 

 

(iii)

whose chief executive officer (by whatever title), chairman of the board of
directors (or equivalent committee or body) and all Persons authorized to act in
the absence or disability of such Persons or otherwise dispose of or control any
vessel are citizens of the United States,

 

 

 

 

(iv)

of which not less than 75% of the interest and voting power of such association
is owned by and vested in Citizens of the United States, free and clear of any
trust or fiduciary obligation in favor of any non-Citizens of the United States,
and free from any contract or understanding through which it is arranged that
such voting power may be exercised directly or indirectly on behalf of
non-Citizens of the United States,

 

 

 

 

(v)

of which not more than a minority of the number of directors (or equivalent
Persons) necessary to constitute a quorum are non-Citizens of the United States,
and

 

 

 

 

(vi)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States.

 

 

 

(e)

Limited Liability Company:

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is a limited liability company:

 

 

 

 

(i)

that is organized under the laws of the United States or of a State,

 

 

 

 

(ii)

of which 75% of the members are Citizens of the United States,

 

 

 

 

(iii)

of which not less than 75% of the membership interest is beneficially owned by,
and vested in Persons who are Citizens of the United States, as defined under
the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

 

 

 

 

(iv)

whose chief executive officer (by whatever title), chairman of the board of
directors (or equivalent committee or body) and all Persons authorized to act in
the absence or disability of such Persons or otherwise dispose of or control any
vessel are citizens of the United States,

Exhibit H-7

--------------------------------------------------------------------------------

 

(v)

of which not less than 75% of the voting power of such company entitled to vote
is vested in Citizens of the United States, free and clear of any trust or
fiduciary obligation, in favor of or on behalf of any non-Citizens of the United
States, and free from any contract or understanding through which it is arranged
that such voting power may be exercised directly or indirectly on behalf of
non-Citizens of the United States,

 

 

 

 

(vi)

of which the managing member or manager (or equivalent Person), if such
company’s management is delegated to a single manager or managing member
pursuant to its organizational agreement, is a citizen of the United States, or,
if such company’s management is conferred by its organizational agreement on
several managers, a management committee or board of directors (or equivalent
governing body), each manager having general management authority is a citizen
of the United States and not more than a minority of the number of management
committee members or directors (or equivalent Persons) necessary to constitute a
quorum of such governing body are non-Citizens of the United States,

 

 

 

 

(vii)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States, and

 

 

 

 

(viii)

of which non-Citizens of the United States do not have authority within a
management group, whether through veto power, combined voting, or otherwise, to
exercise control over the limited liability company.

 

 

 

(f)

Joint Venture (if not an association or a partnership):

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is a joint venture:

 

 

 

 

(i)

that is organized under the laws of the United States or of a State,

 

 

 

 

(ii)

of which 100% of the members are, or 100% of the equity is beneficially owned by
and vested in, Citizens of the United States, as defined under the relevant
clause (a)-(g) of this definition of “Citizen of the United States,” free and
clear of any trust or fiduciary obligation in favor of any non-Citizens of the
United States, and

 

 

 

 

(iii)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States.

 

 

 

(g)

Trust:

 

 

 

________________ is a Citizen of the United States (as defined in the
Application for  Admission to which this Certification is attached) because it
is a trust:

 

 

 

 

(i)

that is domiciled in and existing under the laws of the United States or a
State,

 

 

 

 

(ii)

all of the trustees of which are Citizens of the United States, as defined under
the relevant clause (a)-(g) of this definition of “Citizen of the United
States,”

 

 

 

 

(iii)

of which not less than 75% of the equity interest is owned by Citizens of the
United States, as defined under the relevant clause (a)-(g) of this definition
of “Citizen of the United States,”

 

 

 

 

(iv)

of which each beneficiary with an enforceable interest in the trust is a Citizen
of the United States, as defined under the relevant clause (a)-(g) of this
definition of “Citizen of the United States,” and

 

 

 

 

(v)

of which there are no other means by which direct or indirect control is
conferred upon or permitted to be exercised by non-Citizens of the United
States.

Exhibit H-8

--------------------------------------------------------------------------------

          Under penalties of perjury, I declare that I have examined this
certification and, to the best of my knowledge and belief, it is true, correct
and complete and, if applicable, I further declare that I have authority to sign
this document on behalf of:

 

 

 

--------------------------------------------------------------------------------

 

Name of Purchaser

 

 

 

/s/

 

--------------------------------------------------------------------------------

 

Signature and Date

 

 

 

 

 

--------------------------------------------------------------------------------

 

Title (if applicable)

Note:    If the Purchaser is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Purchaser is a broker, dealer, bank, trust company, clearing
corporation, other nominee owner or agent of any of the foregoing, the above
certification shall be made both as to (a) such broker, dealer, bank, trust
company, clearing corporation, other nominee owner or agent and (b) any person
for whom the Purchaser will hold the Units based on a similar certification from
such beneficial owner.

Exhibit H-9

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