Exhibit 10.7


 


SECOND AMENDED AND RESTATED
CREDIT AGREEMENT,


 


dated as of November 3, 2004,


 


among


 


U.S. SHIPPING PARTNERS L.P.,

U.S. SHIPPING OPERATING LLC,

ITB BALTIMORE LLC,

ITB GROTON LLC,

ITB JACKSONVILLE LLC,

ITB MOBILE LLC,

ITB NEW YORK LLC,

ITB PHILADELPHIA LLC,

USS CHARTERING LLC,

USCS CHEMICAL CHARTERING LLC,

USCS CHEMICAL PIONEER LLC,

USCS CHARLESTON CHARTERING LLC,

USCS CHARLESTON LLC, and

USCS ATB LLC

as the Borrowers,


 


and


 


CERTAIN COMMERCIAL LENDING
INSTITUTIONS,

as the Lenders,


 


CANADIAN IMPERIAL BANK OF
COMMERCE

as Letter of Credit Issuer,


 


CANADIAN IMPERIAL BANK OF
COMMERCE,

as the Administrative Agent for the Lenders,


 


KEYBANK NATIONAL ASSOCIATION,

as the Collateral Agent,


 


and


 


CIBC WORLD MARKETS CORP.,

as Sole Lead Arranger and Sole Bookrunner


 





















 


Table of Contents


 


	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING
  TERMS

  	
   

  
	
   

  	
  SECTION 1.1.

  	
  Defined Terms

  	
   

  
	
   

  	
  SECTION 1.2.

  	
  Use of Defined Terms

  	
   

  
	
   

  	
  SECTION 1.3.

  	
  Cross-References

  	
   

  
	
   

  	
  SECTION 1.4.

  	
  Accounting and
  Financial Determinations

  	
   

  
	
  ARTICLE II

  	
  COMMITMENTS, BORROWING
  PROCEDURES AND NOTES

  	
   

  
	
   

  	
  SECTION 2.1.

  	
  Commitments

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.1.

  	
  Initial Draw Term
  Loan Commitment

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.2.

  	
  Revolving
  Commitment

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.3.

  	
  Delayed Draw Term
  Loan Commitment

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.4.

  	
  Letter of Credit
  Commitment

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.5.

  	
  Lenders Not
  Permitted or Required To Make Loans or Letter of Credit Extensions

  	
   

  
	
   

  	
   

  	
  SECTION 2.1.6.

  	
  Increase in Commitments

  	
   

  
	
   

  	
  SECTION 2.2.

  	
  Reduction of the
  Commitments

  	
   

  
	
   

  	
   

  	
  SECTION 2.2.1.

  	
  Optional Reduction
  of Revolving Commitment Amounts

  	
   

  
	
   

  	
   

  	
  SECTION 2.2.2.

  	
  Mandatory
  Reduction of the Revolving Commitments

  	
   

  
	
   

  	
  SECTION 2.3.

  	
  Borrowing Procedure

  	
   

  
	
   

  	
   

  	
  SECTION 2.3.1.

  	
  Procedure for
  Loans

  	
   

  
	
   

  	
   

  	
  SECTION 2.3.2.

  	
  Procedures for
  Making of Letter of Credit Extensions

  	
   

  
	
   

  	
  SECTION 2.4.

  	
  Continuation and
  Conversion Elections

  	
   

  
	
   

  	
  SECTION 2.5.

  	
  Funding

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.1.

  	
  Funding of Loans

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.2.

  	
  Drawings and Reimbursements;
  Funding of Participations

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.3.

  	
  Obligations
  Absolute

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.4.

  	
  Role of Letter of
  Credit Issuer

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.5.

  	
  Cash Collateral

  	
   

  
						



 


i





















 


	
   

  	
   

  	
  SECTION 2.5.6.

  	
  Applicability of
  ISP98 and UCP

  	
   

  
	
   

  	
   

  	
  SECTION 2.5.7.

  	
  Conflict with
  Letter of Credit Confirmation

  	
   

  
	
   

  	
  SECTION 2.6.

  	
  Notes

  	
   

  
	
  ARTICLE III

  	
  REPAYMENTS, PREPAYMENTS,
  INTEREST AND FEES

  	
   

  
	
   

  	
  SECTION 3.1.

  	
  Repayments and
  Prepayments

  	
   

  	
   

  
	
   

  	
  SECTION 3.2.

  	
  Interest Provisions

  	
   

  
	
   

  	
   

  	
  SECTION 3.2.1.

  	
  Rates

  	
   

  
	
   

  	
   

  	
  SECTION 3.2.2.

  	
  Default Rates of
  Interest

  	
   

  
	
   

  	
   

  	
  SECTION 3.2.3.

  	
  Payment Dates

  	
   

  
	
   

  	
  SECTION 3.3.

  	
  Fees

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.1.

  	
  Revolving
  Commitment Fee

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.2.

  	
  Letter of Credit
  Standby Fee Payable to Revolver Lenders

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.3.

  	
  Letter of Credit
  Fronting Fee Payable to the Letter of Credit Issuer

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.4.

  	
  Arranger’s and
  Administrative Agent’s Fee

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.5.

  	
  Collateral Agent’s
  Fee

  	
   

  
	
   

  	
   

  	
  SECTION 3.3.6.

  	
  Delayed Draw Term
  Loan Commitment Fee

  	
   

  
	
  ARTICLE IV

  	
  CERTAIN LIBO RATE AND
  OTHER PROVISIONS

  	
   

  
	
   

  	
  SECTION 4.1.

  	
  Fixed Rate Lending
  Unlawful

  	
   

  
	
   

  	
  SECTION 4.2.

  	
  Deposits Unavailable

  	
   

  
	
   

  	
  SECTION 4.3.

  	
  Increased LIBO Rate
  Loan Costs, etc

  	
   

  
	
   

  	
  SECTION 4.4.

  	
  Funding Losses

  	
   

  
	
   

  	
  SECTION 4.5.

  	
  Increased Capital
  Costs

  	
   

  
	
   

  	
  SECTION 4.6.

  	
  Taxes

  	
   

  
	
   

  	
  SECTION 4.7.

  	
  Payments,
  Computations, etc

  	
   

  
	
   

  	
  SECTION 4.8.

  	
  Sharing of Payments

  	
   

  
	
   

  	
  SECTION 4.9.

  	
  Setoff

  	
   

  
	
   

  	
  SECTION 4.10.

  	
  Use of Proceeds

  	
   

  
	
  ARTICLE V

  	
  CONDITIONS TO BORROWING

  	
   

  
								



 


ii





















 


	
   

  	
  SECTION 5.1.

  	
  Initial Borrowing

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.1.

  	
  Resolutions, etc

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.2.

  	
  Delivery of Notes

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.3.

  	
  Third Party
  Consents Related to Charters

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.4.

  	
  Support Agreement

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.5.

  	
  Pledge Agreement

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.6.

  	
  Cash Collateral
  Control Agreement; Security Agreements

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.7.

  	
  Mortgages

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.8.

  	
  Guaranties

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.9.

  	
  Opinions of
  Counsel

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.10.

  	
  Closing Fees,
  Expenses, etc

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.11.

  	
  Payment of
  Outstanding Indebtedness

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.12.

  	
  Financial
  Condition

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.13.

  	
  Solvency
  Certificate

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.14.

  	
  Ratings

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.15.

  	
  Equity Offering

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.16.

  	
  Financial
  Statements

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.17.

  	
  Officer’s
  Certificate

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.18.

  	
  Organic
  Documents

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.19.

  	
  Consummation of
  Transactions

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.20.

  	
  Agreement of
  General Partner

  	
   

  
	
   

  	
   

  	
  SECTION 5.1.21.

  	
  Additional
  Documentation

  	
   

  
	
   

  	
  SECTION 5.2.

  	
  All Credit Extensions

  	
   

  
	
   

  	
   

  	
  SECTION 5.2.1.

  	
  Compliance with
  Warranties, No Default, etc

  	
   

  
	
   

  	
   

  	
  SECTION 5.2.2.

  	
  Borrowing Request;
  Letter of Credit Confirmation and Documentation

  	
   

  
	
   

  	
   

  	
  SECTION 5.2.3.

  	
  Satisfactory Legal
  Form

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  SECTION 6.1.

  	
  Organization, etc

  	
   

  
						



 


iii





















 


	
   

  	
  SECTION 6.2.

  	
  Due Authorization, Non-Contravention, etc

  	
   

  
	
   

  	
  SECTION 6.3.

  	
  Government Approval,
  Regulation, etc

  	
   

  
	
   

  	
  SECTION 6.4.

  	
  Validity, etc

  	
   

  
	
   

  	
  SECTION 6.5.

  	
  Financial Information

  	
   

  
	
   

  	
  SECTION 6.6.

  	
  No Material Adverse Change, etc

  	
   

  
	
   

  	
  SECTION 6.7.

  	
  Litigation, Labor
  Controversies, etc

  	
   

  
	
   

  	
  SECTION 6.8.

  	
  Subsidiaries; Nature
  of Business

  	
   

  
	
   

  	
  SECTION 6.9.

  	
  Ownership of
  Properties

  	
   

  
	
   

  	
  SECTION 6.10.

  	
  Taxes

  	
   

  
	
   

  	
  SECTION 6.11.

  	
  Pension and Welfare
  Plans

  	
   

  
	
   

  	
  SECTION 6.12.

  	
  Environmental
  Warranties

  	
   

  
	
   

  	
  SECTION 6.13.

  	
  Regulations T, U and
  X

  	
   

  
	
   

  	
  SECTION 6.14.

  	
  Accuracy of
  Information

  	
   

  
	
   

  	
  SECTION 6.15.

  	
  Solvency

  	
   

  
	
   

  	
  SECTION 6.16.

  	
  Common Enterprise

  	
   

  
	
   

  	
  SECTION 6.17.

  	
  No Default

  	
   

  
	
   

  	
  SECTION 6.18.

  	
  Labor Relations

  	
   

  
	
   

  	
  SECTION 6.19.

  	
  Insurance

  	
   

  
	
   

  	
  SECTION 6.20.

  	
  Use of Proceeds

  	
   

  
	
   

  	
  SECTION 6.21.

  	
  Compliance with Laws

  	
   

  
	
   

  	
  SECTION 6.22.

  	
  Representations in
  other Loan Documents

  	
   

  
	
  ARTICLE VII

  	
  COVENANTS

  	
   

  
	
   

  	
  SECTION 7.1.

  	
  Affirmative Covenants

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.1.

  	
  Financial Information, Reports, Notices, etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.2.

  	
  Compliance with
  Laws, etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.3.

  	
  Maintenance of
  Properties

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.4.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.5.

  	
  Books and Records

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.6.

  	
  Environmental
  Covenant

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.7.

  	
  Required Reserves

  	
   

  
						



 


iv





















 


	
   

  	
   

  	
  SECTION 7.1.8.

  	
  Security

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.9.

  	
  Hedge Agreements

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.10.

  	
  Maintenance of a
  Rating

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.11.

  	
  Undertakings in
  Respect of Additional Subsidiaries

  	
   

  
	
   

  	
   

  	
  SECTION 7.1.12.

  	
  Revolver Cleanup

  	
   

  
	
   

  	
  SECTION 7.2.

  	
  Negative Covenants

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.1.

  	
  Business
  Activities

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.2.

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.3.

  	
  Liens

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.4.

  	
  Financial
  Condition

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.5.

  	
  Investments

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.6.

  	
  Restricted
  Payments, etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.7.

  	
  Capital
  Expenditures, etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.8.

  	
  Rental Obligations

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.9.

  	
  Take or Pay
  Contracts

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.10.

  	
  Consolidation, Merger,
  etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.11.

  	
  Asset
  Dispositions, etc

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.12.

  	
  Certain
  Agreements

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.13.

  	
  Transactions
  with Affiliates

  	
   

  
	
   

  	
   

  	
  SECTION 7.2.14.

  	
  Negative
  Pledges, Restrictive Agreements, etc

  	
   

  
	
  ARTICLE VIII

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
  SECTION 8.1.

  	
  Listing of Events of
  Default

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.1.

  	
  Non-Payment of
  Obligations

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.2.

  	
  Breach of Warranty

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.3.

  	
  Non-Performance of
  Certain Covenants and Obligations

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.4.

  	
  Non-Performance of
  Other Covenants and Obligations

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.5.

  	
  Default on Other
  Indebtedness

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.6.

  	
  Judgments

  	
   

  
						



 


v





















 


	
   

  	
   

  	
  SECTION 8.1.7.

  	
  Pension Plans

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.8.

  	
  Change of Control

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.9.

  	
  Bankruptcy,
  Insolvency, etc

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.10.

  	
  Impairment of
  Security, etc

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.11.

  	
  Guarantor
  Defaults

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.12.

  	
  Material Adverse
  Change

  	
   

  
	
   

  	
   

  	
  SECTION 8.1.13.

  	
  MLP Agreement

  	
   

  
	
   

  	
  SECTION 8.2.

  	
  Action if Bankruptcy

  	
   

  
	
   

  	
  SECTION 8.3.

  	
  Action if Other Event
  of Default

  	
   

  
	
  ARTICLE IX

  	
  THE ADMINISTRATIVE AGENT,
  LETTER OF CREDIT ISSUER, ARRANGER AND COLLATERAL AGENT

  	
   

  
	
   

  	
  SECTION 9.1.

  	
  Actions

  	
   

  
	
   

  	
  SECTION 9.2.

  	
  Funding Reliance, etc

  	
   

  
	
   

  	
  SECTION 9.3.

  	
  Exculpation

  	
   

  
	
   

  	
  SECTION 9.4.

  	
  Successor

  	
   

  
	
   

  	
  SECTION 9.5.

  	
  Credit Extensions by
  CIBC and KeyBank National Association

  	
   

  
	
   

  	
  SECTION 9.6.

  	
  Credit Decisions

  	
   

  
	
   

  	
  SECTION 9.7.

  	
  Copies, etc

  	
   

  
	
   

  	
  SECTION 9.8.

  	
  Arranger; Bookrunner

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
  SECTION 10.1.

  	
  Waivers, Amendments,
  etc

  	
   

  
	
   

  	
  SECTION 10.2.

  	
  Notices

  	
   

  
	
   

  	
  SECTION 10.3.

  	
  Payment of Costs and
  Expenses

  	
   

  
	
   

  	
  SECTION 10.4.

  	
  Indemnification

  	
   

  
	
   

  	
  SECTION 10.5.

  	
  Survival

  	
   

  
	
   

  	
  SECTION 10.6.

  	
  Severability

  	
   

  
	
   

  	
  SECTION 10.7.

  	
  Headings

  	
   

  
	
   

  	
  SECTION 10.8.

  	
  Execution in
  Counterparts, Effectiveness, etc

  	
   

  
	
   

  	
  SECTION 10.9.

  	
  Governing Law;
  Entire Agreement

  	
   

  
						



 


vi





















 


	
   

  	
  SECTION 10.10.

  	
  Successors and
  Assigns

  	
   

  
	
   

  	
  SECTION 10.11.

  	
  Sale and Transfer
  of Loans and Notes; Participations in Loans and Notes

  	
   

  
	
   

  	
   

  	
  SECTION
  10.11.1.

  	
  Assignments

  	
   

  
	
   

  	
   

  	
  SECTION
  10.11.2.

  	
  Participations

  	
   

  
	
   

  	
  SECTION 10.12.

  	
  Confidentiality

  	
   

  
	
   

  	
  SECTION 10.13.

  	
  Other Transactions

  	
   

  
	
   

  	
  SECTION 10.14.

  	
  Forum Selection
  and Consent to Jurisdiction

  	
   

  
	
   

  	
  SECTION 10.15.

  	
  Waiver of Jury
  Trial

  	
   

  
	
   

  	
  SECTION 10.16.

  	
  Joint and Several
  Obligations

  	
   

  
	
   

  	
  SECTION 10.17.

  	
  Delivery of Lender
  Addenda

  	
   

  
	
   

  	
  SECTION 10.18.

  	
  Assumption,
  Renewal and Continuation of Existing Indebtedness

  	
   

  
	
   

  	
  SECTION 10.19.

  	
  Releases with
  Respect to Exiting Borrowers

  	
   

  
						



 


vii





















 


	
  SCHEDULE
  I

  	
  —

  	
  Disclosure
  Schedule

  
	
  SCHEDULE II

  	
  —

  	
  Description of Vessels

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
  —

  	
  Form
  of Revolving Note

  
	
  EXHIBIT
  B

  	
  —

  	
  Form
  of Term Note

  
	
  EXHIBIT
  C

  	
  —

  	
  Form
  of Borrowing Request

  
	
  EXHIBIT
  D

  	
  —

  	
  Form
  of Continuation/Conversion Notice

  
	
  EXHIBIT
  E

  	
  —

  	
  Form
  of Lender Assignment Agreement

  
	
  EXHIBIT F-1

  	
  —

  	
  Form of Opinion of Counsel to the Borrower

  
	
  EXHIBIT F-2

  	
  —

  	
  Form of Opinion of Special Counsel to the Borrower

  
	
  EXHIBIT
  G

  	
  —

  	
  Form
  of Amended and Restated Mortgage

  
	
  EXHIBIT
  H

  	
  —

  	
  Form
  of Pledge Agreement

  
	
  EXHIBIT I-1

  	
  —

  	
  Form of Security Agreement

  
	
  EXHIBIT I-2

  	
  —

  	
  Form of Amendment to Security Agreement

  
	
  EXHIBIT
  J

  	
  —

  	
  Form
  of Guaranty

  
	
  EXHIBIT K-1

  	
  —

  	
  Form of Omnibus Acknowledgment of Third
  Party Agreements

  
	
  EXHIBIT K-2

  	
  —

  	
  Form of Third Party Consent (Charters)

  
	
  EXHIBIT K-3

  	
  —

  	
  Form of Acknowledgment to Third Party
  Consent (Charters)

  
	
  EXHIBIT
  L

  	
  —

  	
  Form
  of Amended and Restated Cash Collateral Control Agreement

  
	
  EXHIBIT
  M

  	
  —

  	
  Form
  of Solvency Certificate

  
	
  EXHIBIT
  N

  	
  —

  	
  Form
  of Additional Lender Certificate

  
	
  EXHIBIT
  O

  	
  —

  	
  Form
  of Lender Addendum Agreement

  
	
  EXHIBIT
  P

  	
  —

  	
  Form
  of Exemption Certificate

  
	
  EXHIBIT
  Q

  	
  —

  	
  Projections

  
	
  EXHIBIT
  R

  	
  —

  	
  Form
  of General Partner Letter

  



 


viii





















 


SECOND AMENDED AND RESTATED
CREDIT AGREEMENT


 


THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 3, 2004, among U.S. SHIPPING PARTNERS
L.P., a Delaware limited partnership (the “MLP”), U.S. SHIPPING OPERATING
LLC, a Delaware limited liability company (“Operating LLC”),
ITB BALTIMORE LLC,
a Delaware limited liability company, ITB GROTON LLC, a Delaware limited liability company, ITB JACKSONVILLE LLC,
a Delaware limited liability company, ITB MOBILE LLC, a Delaware limited liability company, ITB NEW YORK LLC,
a Delaware limited liability company, ITB PHILADELPHIA LLC, a Delaware limited liability company, USS CHARTERING LLC,
a Delaware limited liability company (“Charter LLC”), USCS CHEMICAL CHARTERING LLC, a
Delaware limited liability company (“Chemical Chartering”), USCS CHEMICAL PIONEER LLC,
a Delaware limited liability company (“Chemical Pioneer”), USCS CHARLESTON LLC,
a Delaware limited liability company (“Charleston”), USCS CHARLESTON CHARTERING LLC,
a Delaware limited liability company (“USCS Chartering”), USCS ATB LLC,
a Delaware limited liability company (“ATB LLC”) (each of the foregoing being
individually called a “Borrower”
and collectively, the “Borrowers”),
the various financial institutions as are or may become parties hereto
(collectively, the “Lenders”),
CANADIAN IMPERIAL
BANK OF COMMERCE, as Letter of Credit Issuer, CANADIAN IMPERIAL BANK OF COMMERCE
(“CIBC”),
as administrative agent (in such capacity together with its successors in such
capacity, the “Administrative
Agent”) for the Lenders, KEYBANK NATIONAL ASSOCIATION, as
collateral agent (in such capacity, together with its successors in such
capacity, the “Collateral
Agent”) for the Secured Parties (as hereinafter defined).


 


W I T N E S S E T H:


 


WHEREAS, United States Shipping Master LLC, a Delaware
limited liability company (“Shipping Master”), United States
Shipping LLC, United States Chemical Shipping LLC, ITB Baltimore LLC, ITB
Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB
Philadelphia LLC, Charter LLC, USS Vessel Management, Inc., USS Transport LLC,
Chemical Chartering, USCS Chemical Transport LLC, Chemical Pioneer, and
Charleston (collectively, the “Existing Borrowers”), the Lenders
parties thereto (the “Existing
Lenders”), Canadian Imperial Bank of Commerce, as Letter of
Credit Issuer, Canadian Imperial Bank of Commerce, as Administrative Agent and
National City Bank, as collateral agent are parties to that certain Amended and
Restated Credit Agreement, dated as of April 13, 2004, as amended by that First
Amendment to Amended and Restated Credit Agreement, dated as of August 5, 2004
(as further amended or modified, the “Existing Credit Facility”); and


 


WHEREAS, Shipping Master intends to reorganize and
restructure in part by creating MLP and offering ownership of MLP to the public
through the sale of common units representing limited partner interests in MLP
(the “Equity Offering”);


 


WHEREAS, Shipping Master intends to use a portion of the
proceeds raised through the Equity Offering to prepay (the “Offering Prepayment”)
a portion of the outstanding indebtedness under the Existing Credit Facility;


 





















 


WHEREAS, through the execution of this Agreement the Existing
Lenders intend to, and hereby do, waive those provisions in the Existing Credit
Facility that are necessary in order to enable the reorganization and
restructuring of Shipping Master and facilitate the Equity Offering as
described in the Final Prospectus, dated October 28, 2004, filed by MLP with
the United States Securities and Exchange Commission;


 


WHEREAS, MLP, Operating LLC, USCS Chartering and ATB LLC
intend to assume pursuant hereto all of the outstanding obligations of the
Existing Borrowers outstanding under the Existing Credit Facility;


 


WHEREAS, Chemical Pioneer, and its wholly-owned Subsidiaries,
intend to directly assume pursuant hereto $2,500,000, and only $2,500,000, of
the obligations of the Existing Borrowers outstanding under the Existing Credit
Facility (the “Chemical
Pioneer Debt”);


 


WHEREAS, the parties hereto intend to amend and restate the
Existing Credit Facility in order to, among other things, (a) restructure,
rearrange, renew, extend and continue all remaining indebtedness and Letters of
Credit outstanding under the Existing Credit Facility (the “Existing Indebtedness”)
after taking into effect the Offering Prepayment, (b) remove Shipping Master,
among others, as a Borrower, (c) add MLP and Operating LLC, among others, as
Borrowers, and add Chemical Pioneer and Chemical Chartering as Guarantors, (d)
reduce the Commitment Amount (as defined in the Existing Credit Agreement) to
the Commitment Amount (as hereinafter defined) and (e) modify the commitments
from the Lenders pursuant to which Loans will be made by the Lenders to the
Borrowers from time to time prior to the Commitment Termination Date and
Letters of Credit will be issued by the Letter of Credit Issuer under the
several responsibilities of the Lenders for the account of the Borrowers from
time to time prior to the Commitment Termination Date.


 


NOW, THEREFORE, the parties hereto agree that the Existing
Indebtedness shall become Indebtedness under this Agreement and further agree
that the Existing Credit Agreement is amended hereby and restated in its
entirety as follows:


 


ARTICLE I


 


DEFINITIONS AND ACCOUNTING TERMS


 


SECTION 1.1.  
Defined Terms. 
The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof)


 


“Additional Lender Certificate” means
an Additional Lender Certificate substantially in the form of Exhibit N
hereto.


 


“Administrative Agent” is defined in
the preamble
and includes each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 9.4.


 


2





















 


“Administrative Agent’s Fee Letter and Arranger’s Fee
Letter” is defined in Section 3.3.4.


 


“Affiliate” of any Person means any
other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person (excluding any trustee under, or any
committee with responsibility for administering, any Plan).  A Person shall be deemed to be “controlled by”
any other Person if such other Person possesses, directly or indirectly, power


 


(a)           to vote 10% or more of the securities
(on a fully diluted basis) having ordinary voting power for the election of
directors or managing general partners; or


 


(b)           to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.


 


“Affiliated Fund” means, with respect
to any Lender that is a fund that invests (in whole or in part) in bank loans,
any other fund that invests (in whole or in part) in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.


 


“Agreement” means, on any date, this
Second Amended and Restated Credit Agreement as originally in effect on the
Effective Date and as thereafter from time to time amended, supplemented,
amended and restated, or otherwise modified and in effect on such date.


 


“Alternate Base Rate” means, on any
date and with respect to all Base Rate Loans, a fluctuating rate of interest
per annum equal to the higher of


 


(a)           the rate of interest most recently
established by CIBC at
its Domestic Office as its reference rate for Dollar loans; and


 


(b)           the Federal Funds Rate most recently
determined by the Administrative Agent plus .5%.


 


The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by CIBC in
connection with extensions of credit. 
Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate.  The Administrative
Agent will give notice promptly to the Borrowers and the Lenders of changes in
the Alternate Base Rate.


 


“Amendment to Security Agreement” means each
Amendment to Security Agreement of even date herewith executed and delivered
pursuant to Section 5.1.6
by each of the Existing Borrowers that is a Borrower hereunder and USCS ATB LLC
in substantially the form of Exhibit I-2 hereto.


 


“Annual Capital Expenditure Amount” is
defined in Section
7.2.7(a).


 


“Applicable Margin” means (a) at
any time with respect to each Base Rate Loan, 1.0% per annum less than the then
Applicable Margin for LIBO Rate Loans, and (b) with respect to each LIBO
Rate Loan, which is (i) a Term Loan, 2.00% per annum or such other rate
per annum


 


3





















 


as is payable on the Greenshoe Increase as determined pursuant to Section 2.1.6;
or (ii) a Revolving Loan, until April 30, 2005, 2.00% per annum, and
thereafter, at such times as the MLP’s Total Debt Leverage Ratio for the
twelve-month period ending on the last day of the Fiscal Quarter preceding the
Fiscal Quarter for which such determination of the Applicable Margin is being
made is (A) equal to or greater than 1.75, 2.00% per annum, (B) less
than 1.75 but greater than or equal to 1.25, 1.75% per annum or (C) less
than 1.25, 1.50% per annum.  Changes in
the Applicable Margin resulting from changes in the MLP’s Total Debt Leverage
Ratio will occur on the first Business Day immediately following the date that
the Administrative Agent has received a compliance certificate delivered by the
Borrowers pursuant to Section
7.1.1(c) demonstrating that the Total Debt Leverage Ratio has
changed; provided
that if the Borrowers fail to deliver any such compliance certificate within
the time period required in Section 7.1.1(c), then the Total Debt
Leverage Ratio shall, as of the date such compliance certificate should have
been delivered to the Administrative Agent, be deemed to be greater than 1.75
until, but not including, the date on which the Borrowers deliver such
compliance certificate.


 


“Arranger” means CIBC World Markets
Corp.


 


“Assignee Lender” is defined in Section 10.11.1.


 


“ATB” means a new articulated tug-barge
vessel designed to transport chemicals to be constructed pursuant to the ATB
Construction Contract.


 


“ATB Contractor” means Southeastern New
England Shipbuilding Corporation d/b/a SENESCO Marine, a Delaware corporation,
and its successors.


 


“ATB Construction Contract” means that
Articulated Tug Barge Building Agreement, dated August 7, 2004, among the ATB
Contractor, USCS ATB LLC, and United States Chemical Shipping LLC, as amended by
that certain Letter Agreement dated as of August 7, 2004, as further amended by
that Letter Agreement dated as of September 29, 2004, as further amended or
otherwise modified from time to time.


 


“ATB LLC” is defined in the preamble.


 


“Authorized Officer” means, relative to
any Loan Party, its chairman, chief executive officer, president, chief
financial officer, vice president, secretary or treasurer whose signatures and
incumbency shall have been certified to the Administrative Agent and the
Lenders pursuant to Section
5.1.1.


 


“Base Rate Loan” means a Loan bearing
interest at a fluctuating rate determined by reference to the Alternate Base
Rate.


 


“Borrower” is defined in the preamble.


 


“Borrowing” means the Loans of the same
type and, in the case of LIBO Rate Loans, having the same Interest Period made
by all Lenders on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.


 


4





















 


“Borrowing Request” means a loan request
and certificate duly executed by an Authorized Officer of the General Partner
or one of the Borrowers, substantially in the form of Exhibit C
hereto.


 


“Business” means the acquisition,
ownership, chartering, maintenance and operation of the Vessels and related
assets.


 


“Business Day” means


 


(a)           any day which is neither a Saturday
or Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York; and


 


(b)           relative to the making, continuing,
prepaying or repaying of any LIBO Rate Loans, any day on which dealings in
Dollars are carried on in the London interbank market.


 


“Capital Expenditures” means, for any
period, the sum of


 


(a)           the aggregate amount of all
expenditures of the MLP and its Subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be classified as
capital expenditures; and


 


(b)           the aggregate amount of all
Capitalized Lease Liabilities incurred during such period.


 


“Capitalized Lease Liabilities” means
all monetary obligations of the MLP or any of its Subsidiaries under any
leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalized leases, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.


 


“Cash Collateral Control Agreement”
means that certain Amended and Restated Cash Collateral Control Agreement of
even date herewith entered into by and among the Borrowers, the Collateral
Agent, McDonald Investment, Inc., acting as Securities Intermediary, and the
Administrative Agent in substantially the form of Exhibit L hereto, as amended,
supplemented, restated and otherwise modified from time to time.


 


“Cash Equivalent Investment” means, at
any time:


 


(a)           any evidence of Indebtedness,
maturing not more than three months after such time, issued or fully guaranteed
by the United States Government or any agency thereof;


 


(b)           commercial paper, maturing not more
than three months from the date of issue, which is issued by a corporation
(other than an Affiliate of any of the Loan Parties)


 


5





















 


organized under the laws of any state of the United
States or of the District of Columbia and rated A-l by S&P Corporation or
P-l by Moody’s;


 


(c)           any certificate of deposit or bankers
acceptance and eurodollar time deposits, maturing not more than three months
after such time, which is issued by a commercial banking institution that is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000;


 


(d)           any repurchase agreement entered into
with any other commercial banking institution of the stature referred to in clause (c)
which


 


(i)            is secured by a fully perfected
security interest in any obligation of the type described in any of clauses (a)
through (c);
and


 


(ii)           has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such other commercial banking institution thereunder;


 


(e)           securities with maturities of three
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory,
the securities of which state, commonwealth, territory, political subdivision
or taxing authority are rated at least A by S&P or A by Moody’s; or


 


(f)            shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements of
clauses (a)
through (e)
of this definition.


 


“CERCLA” means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.


 


“CERCLIS” means the Comprehensive
Environmental Response Compensation Liability Information System List.


 


“Change in Control” means


 


(a)           the occurrence of any transaction,
the result of which is that Sterling and Management, and Related Parties of
each, beneficially own in the aggregate, directly or indirectly, less than 51%
of the total voting power entitled to vote for the election of directors of the
General Partner;


 


(b)           the occurrence of any transaction or
event, the result of which is that the General Partner is no longer the sole
general partner of MLP;


 


(c)           the liquidation or dissolution of MLP
or the General Partner;


 


(d)           the sale, lease, conveyance or other
disposition of all or substantially all of the MLP’s assets to any Person or
group (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934); or


 


6





















 


(e)           the failure of the MLP to own,
directly or indirectly, free and clear of all Liens or other encumbrances other
than Liens in favor of the Collateral Agent, 100% of the ownership interests of
the other Borrowers.


 


“Charleston” is defined in the preamble.


 


“Charter” means each “time charter” (as
defined in the Support Agreement and used herein with the same meaning) or
contract of affreightment covering a Vessel or the ATB.


 


“Chemical Chartering” is defined in the
preamble.


 


“Chemical Chartering Lease” means each
of (a) that certain bareboat charter agreement entered into by Chemical
Chartering with Chemical Pioneer whereby Chemical Chartering agrees to charter
the S.S. Chemical Pioneer and (b) each bareboat charter agreement entered into
by Chemical Chartering with any Loan Party that owns a Vessel, whereby Chemical
Chartering agrees to charter such Vessel.


 


“Chemical Pioneer” is defined in the preamble.


 


“CIBC” is defined in the preamble.


 


“Closing Date” the first date all the
conditions precedent in Article V are satisfied or waived in
accordance with such Article.


 


“Code” means the U.S. Internal Revenue
Code of 1986, as amended, reformed or otherwise modified from time to time.


 


“Collateral Agent” means KeyBank
National Association, acting in its capacity as collateral agent (as trustee in
respect of the Mortgages) for the Secured Parties under the Mortgages, the
Pledge Agreements, the Security Agreements and under the Cash Collateral
Control Agreement, together with its successors in such capacity.


 


“Collateral Agent’s Fee Letter” is
defined in Section 3.3.5.


 


“Commitment” means, as the context may
require, a Lender’s Revolving Commitment or Term Loan Commitment.


 


“Commitment Amount” means, as the
context may require, either the Revolving Commitment Amount or the Term Loan
Commitment Amount.


 


“Commitment Fee Rate” means (a) at any
time with respect to the Delayed Draw Term Loan Commitment Amount, 0.75% per
annum, and (b) at any time with respect to the Revolving Loan Commitment, 0.5%
per annum.


 


“Commitment Termination Date” means, as
the context may require, the Delayed Draw Term Loan Commitment Termination
Date, the Revolving Commitment Termination Date, or the Letter of Credit
Commitment Termination Date.


 


7





















 


“Commitment Termination Event” means


 


(a)           the occurrence of any Default
described in clause
(a) through (d) of Section 8.1.9 with respect to the
General Partner, any Loan Party or any of their Subsidiaries; or


 


(b)           the occurrence and continuance of any
other Event of Default and either


 


(i)            the declaration of the Loans to be
due and payable pursuant to Section 8.3, or


 


(ii)           in the absence of such declaration,
the giving of notice by the Administrative Agent, acting at the direction of
the Majority Lenders, to the Borrowers that the Commitments have been
terminated.


 


“Consolidated Pro Forma EBITDA” means,
for any period, for the MLP and its Subsidiaries on a consolidated basis, an
amount equal to (x) the sum of (a) consolidated Net Income,
(b) consolidated Interest Charges, (c) the amount of taxes, based on or
measured by income, to the extent used or included in the determination of such
consolidated Net Income, (d) the amount of depreciation and amortization
expense deducted in determining such consolidated Net Income, (e) any amounts
due to USS Chartering LLC pursuant to the Support Agreement during such period
(net of permitted set offs under the Support Agreement) to the extent not
included in calculating consolidated Net Income for such period, (f) with
respect to periods ending prior to the Effective Date, the Management Fee
accruing during such period to the extent deducted in calculating consolidated
Net Income for such period, (g)  management bonuses paid in connection
with the completion of the Equity Offering, costs incurred during the 2004
Fiscal Year in connection with coming into compliance with the Sarbanes-Oxley
Act of 2002, and the cost of preparing and mailing Schedule K-1s for the 2004
Fiscal Year, to the extent deducted in calculating consolidated Net Income for
such period, in an amount not to exceed $2,000,0000 in the aggregate, and
(h) any other pro forma adjustments which shall be made in the judgment of
the Administrative Agent; minus (y) without duplication of
amounts deducted in respect of set offs pursuant to clause (e) above, any
amounts payable by USS Chartering LLC pursuant to the Support Agreement
accruing during such period to the extent not deducted in calculating
consolidated Net Income for such period; provided, however, that each of the foregoing
clauses (a), (b), (c), and (d) shall be calculated after giving pro forma
effect, subject to the discretion of the Administrative Agent, to any Vessel
Acquisition completed during such period as if such Vessel Acquisition occurred
on the first day of such period; except that for any calculation period ending
on or before March 31, 2005, Consolidated Pro Forma EBITDA shall be
(i) calculated with respect to Chemical Pioneer and Charleston pursuant to
the following formula:


 


Consolidated Pro Forma EBITDA = {[1.00 - (A/365)]
times X} + Y


 


where, as of any date of determination, (1) A equals
the number of calendar days elapsed since May 1, 2004 for calculations made
with respect to Chemical Pioneer and Charleston; (2) X equals $5,100,000 for
calculations made with respect to Chemical Pioneer and $10,200,000 for
calculations made with respect to Charleston; and (3) Y equals the actual
financial operating


 


8





















 


results for the respective period for Chemical Pioneer and Charleston
from the period beginning on May 1, 2004, and ending on the date of such
determination and (ii) deemed increased by $664,000 as a result of vessel
modification charges in respect of the Charleston.


 


“Contingent Liability” means any
agreement, undertaking or arrangement by which any Person guarantees, endorses
or otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the indebtedness, obligation or any other liability of
any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the equity interests of any other Person. 
The amount of any Person’s obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.


 


“Continuation/Conversion Notice” means
a notice of continuation or conversion and certificate duly executed by an
Authorized Officer of each of the Borrowers, substantially in the form of Exhibit D
hereto.


 


“Contribution Agreement” means that
certain Contribution, Conveyance and Assumption Agreement, dated as of the
Closing Date, by and among Shipping Master, the MLP, the Operating LLC and the
other Borrowers party thereto as in effect on the Closing Date.


 


“Controlled Group” means all members of
a controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) under common control which,
together with the Borrowers, are treated as a single employer under Section
414(b) or 414(c) of the Code or Section 4001 of ERISA.


 


“Credit Exposure” means, relative to
any Lender, at any time, the sum of (a) its Revolving Commitment including the
Letter of Credit Sublimit (or if the Revolving Commitments have expired or been
terminated, the aggregate unpaid principal amount of its Revolving Loans), and
(b) the unpaid principal amount of its Term Loans.


 


“Credit Extension” means each of the
following: (a) a Loan, and (b) the issuance, renewal or extension of a Letter
of Credit or an increase in the amount of a Letter of Credit.


 


“Credit Facility Pro Rata Share” means,
with respect to any prepayment (whether voluntary or involuntary and for
purposes hereof, including any requirement to cash collateralize) of any Credit
Extension to be made on any date pursuant to Section 3.1(d), (e) or (f), a
fraction (expressed as a percentage) (x) the numerator of which is the
difference between (i) the Total Prepayment Amount with respect to such
prepayment to be made on such date minus (ii) the Relevant Secured Hedge
Obligations with respect to such prepayment to be made on such date, and
(y) the denominator of which is the Total Prepayment Amount with respect
to such prepayment to be made on such date.


 


9





















 


“Debt” means the outstanding principal
amount of all Indebtedness of the MLP and its Subsidiaries of the nature
referred to in clauses
(a), (b),
(c)
and (f)
of the definition of “Indebtedness”.


 


“Default” means any Event of Default or
any condition, occurrence or event which, after notice or lapse of time or
both, would constitute an Event of Default.


 


“Delayed Draw Term Lender” means each
Lender which from time to time has a commitment hereunder to make, or which has
made, a Delayed Draw Term Loan and their successors and permitted assignees.


 


“Delayed Draw Term Loan” is defined in Section 2.1.3.


 


“Delayed Draw Term Loan Commitment Amount”
means on the Closing Date, but prior to the Delayed Draw Term Loan Commitment
Termination Date, $30,000,000, and zero thereafter, unless otherwise increased
pursuant to Section
2.1.6.


 


“Delayed Draw Term Loan Commitment Termination Date”
means November 2, 2005.


 


“Disclosure Schedule” means the
Disclosure Schedule attached hereto as Schedule I, as it may be amended,
supplemented or otherwise modified from time to time by the Loan Parties with
the written consent of the Administrative Agent and the Majority Lenders.


 


“Disposition” or “Dispose”
means the sale, transfer, license or other disposition (including any sale and
leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.


 


“Distribution” for any Person means,
with respect to any shares of capital stock, any units, any partnership
interests, any membership interests, or equity securities or ownership
interests issued by such Person, (a) the retirement, redemption, purchase,
or other acquisition for value of any such securities or interests,
(b) the declaration or payment of any dividend or distribution on or with
respect to any such securities, and (c) any other payment by such Person
with respect to such securities or interests.


 


“Dollar” and the sign “$” mean
lawful money of the United States.


 


“Domestic Office” means, relative to
any Lender, the office of such Lender designated as such in the Lender Addendum
Agreement or designated in the Lender Assignment Agreement executed by such
Lender or such other office of a Lender (or any successor or assign of such
Lender) within the United States as may be designated from time to time by
notice from such Lender, as the case may be, to each other Person party
hereto.  A Lender may have separate
Domestic Offices for purposes of making, maintaining or continuing, as the case
may be, Base Rate Loans.


 


“Draw Date” is defined in Section 2.5.2.


 


10





















 


“Effective Date” means the date this
Agreement becomes effective pursuant to Section 10.8.


 


“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a
Lender, (c) a Person that is an Affiliated Fund of any Lender immediately prior
to an assignment, or (d) any other Person (other than a natural Person)
approved by the Administrative Agent (whose approval shall not be unreasonably
withheld or delayed) and (in the case of an assignment of any portion of the
Revolving Commitment) the Letter of Credit Issuer (whose approval shall not be
unreasonably withheld or delayed) and as long as no Default or Event of Default
shall have occurred and be continuing, the Borrowers (whose approval shall not
be unreasonably withheld or delayed);  provided that if the consent of the
Borrowers is required pursuant to the immediately preceding clause (d)
then the Borrowers shall be deemed to have given their consent five Business
Days after the date notice thereof has been delivered by the assigning Lender
(through the Administrative Agent) unless such consent is expressly refused by
the Borrowers prior to such fifth Business Day.


 


“Environmental Laws” means all
applicable federal, state or local statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative
orders) relating to public health and safety and protection of the environment.


 


“Equity Offering” is defined in the second recital.


 


“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as in effect
from time to time.  References to
sections of ERISA also refer to any successor sections.


 


“Event of Default” is defined in Section 8.1.


 


“Excluded Charter” means (i) each
Existing Charter described in clauses (i) through (iv) in the definition of
Existing Charters, and (ii) each Charter covering a Vessel initially owned by
an Original Owner (a) entered into by a Borrower with a charterer (other than a
Borrower) having a senior unsecured long-term credit rating by Moody’s of Baa2
with stable outlook or better and a senior unsecured debt credit rating by
S&P of BBB with stable outlook or better, in each case, at the time such
Charter is entered into, (b) pursuant to which the relevant charterer is
required to make payments at a Negotiated Rate which equals or exceeds the
applicable rate set forth in Schedule A of the Support Agreement for such
Vessel, and (c) as to which Hess is released from any obligation to make Hess
Payments (as defined in the Support Agreement) pursuant to Section 8 of the
Support Agreement.


 


“Existing Borrowers” is defined in the first recital.


 


“Existing Charters” means each of the
following: (i) a time charter dated as of December 17, 1999 by and between
Tug New York Company, as predecessor in interest to USS Chartering LLC, and BP
West Coast Products LLC, as successor in interest to Arco Products Company, as
amended by Addendum Number 1 dated April 11, 2000, Addendum Number 2 dated June
7, 2001, Addendum Number 3 dated September 18, 2001, and Addendum Number 4


 


11





















 


dated January 1, 2002, (ii) a time charter dated as of August 24, 2000
by and between Tug New York Company, as predecessor in interest to USS
Chartering LLC and BP West Coast Products LLC, successor in interest to Arco
Products Company, as amended by Addendum Number 1 dated November 17, 2000, and
Addendum Number 2 dated January 1, 2002, (iii) a time charter dated as of
September 1, 2002, by and between USS Chartering LLC and Hess, (iv) a contract
of affreightment dated as of December 17, 2002, by and between USS Chartering LLC
and Shell Trading (US) Company, as amended by Addendum Number One dated July
15, 2003, (v) a contract of affreightment dated as of May 6, 2003, by and
between USCS Chemical Chartering LLC and The Dow Chemical Company as amended by
Addendum Number 1 and Addendum Number 2, both dated May 6, 2003, Addendum
Number 3, dated as of April 12, 2004, and Addendum Number 4, dated as of July
26, 2004, (vi) a contract of affreightment dated as of February 20, 2004 by and
between USCS Chemical Chartering LLC and Koch Shipping, Inc., (vii) a contract
of affreightment dated as of March 12, 2004, by and between USCS Chemical
Chartering LLC and Shell Trading (US) Company, (viii) a contract of
affreightment dated as of February 9, 2004 by and between USCS Chemical Chartering
LLC and SeaRiver Maritime, Inc., (ix) a contract of affreightment dated
April 8, 2004 by and between USCS Chemical Chartering LLC and PPG Industries,
Inc., and (x) a contract of affreightment dated December 23, 2003 by and
between USCS Chemical Chartering LLC, Lyondell Chemical Company and Equistar
Chemicals, L.P.


 


“Existing Credit Facility” is defined
in the first recital.


 


“Existing Indebtedness” is defined in
the seventh recital.


 


“Exiting Borrowers” means Shipping
Master, United States Shipping LLC, United States Chemical Shipping LLC, USS
Transport LLC and USCS Chemical Transport LLC, each a Delaware limited
liability company, and USS Vessel Management Inc., a Delaware corporation.


 


“Federal Funds Rate” means, for any
period, a fluctuating interest rate per annum equal for each day during such
period to


 


(a)           the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or


 


(b)           if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by CIBC from three federal funds brokers of
recognized standing selected by it.


 


“Final Prospectus” is defined in Section 6.5.


 


“Fiscal Quarter” means any quarter of a
Fiscal Year.


 


“Fiscal Year” means any period of
twelve consecutive calendar months ending on December 31; references to a
Fiscal Year with a number corresponding to any calendar year


 


12





















 


(e.g.,
the “1988 Fiscal Year”) refer to the Fiscal Year ending on the December 31
occurring during such calendar year.


 


“F.R.S. Board” means the Board of
Governors of the Federal Reserve System or any successor thereto.


 


“GAAP” is defined in Section 1.4.


 


“General Partner” means US Shipping
General Partner LLC, a Delaware limited liability company and sole general partner
of MLP.


 


“Governmental Authority” means any
nation or government, any state, federal or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.


 


“Guarantor” means any Person delivering
a Guaranty pursuant to the Loan Documents.


 


“Guaranty” means any guaranty from any
Person delivered pursuant to the Loan Documents, substantially in the form of Exhibit J
or in such other form as acceptable to the Administrative Agent.


 


“Hazardous Material” means


 


(a)           any “hazardous substance”, as defined
by CERCLA;


 


(b)           any “hazardous waste”, as defined by
the Resource Conservation and Recovery Act, as amended;


 


(c)           any petroleum product; or


 


(d)           any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material or substance within the
meaning of any other applicable federal, state or local law, regulation,
ordinance or requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material, all as amended or
hereafter amended.


 


“Hedge Agreements” means all interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect any
Borrower against fluctuations in interest rates including all confirmations and
schedules related thereto and all credit support documents and related margin
accounts delivered in connection therewith.


 


“Hedge Counterparties” means any party
to a Hedge Agreement other than a Borrower.


 


“Hedging Obligations” means, with
respect to any Person, all liabilities of such Person under interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect such Person
against


 


13





















 


fluctuations in interest rates or currency exchange rates and all
commodity hedge, commodity swap, exchange, forward, future, floor, collar or
cap agreements, fixed price arrangements and all other agreements or
arrangements designed to protect any Borrower against fluctuations in currency
exchange rates or commodity prices.


 


“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.


 


“Hess” means Amerada Hess Corporation,
a Delaware corporation.


 


“Impermissible Qualification” means,
relative to the opinion or certification of any independent public accountant
as to any financial statement of any Loan Party, any qualification or exception
to such opinion or certification


 


(a)           which is of a “going concern” or
similar nature;


 


(b)           which relates to the limited scope of
examination of matters relevant to such financial statement; or


 


(c)           which relates to the treatment or
classification of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such item the effect
of which would be to cause the Borrowers to be in default of any of their
obligations under Section
7.2.4.


 


“including” means including without
limiting the generality of any description preceding such term, and, for
purposes of this Agreement and each other Loan Document, the parties hereto
agree that the rule of eusdem
generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.


 


“Indebtedness” of any Person means,
without duplication:


 


(a)           all obligations of such Person for
borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;


 


(b)           all obligations, contingent or
otherwise, relative to the face amount of all letters of credit, whether or not
drawn, and banker’s acceptances issued for the account of such Person;


 


(c)           all obligations of such Person as
lessee under leases which have been or should be, in accordance with GAAP,
recorded as Capitalized Lease Liabilities;


 


(d)           all other items which, in accordance
with GAAP, would be included as liabilities on the liability side of the
balance sheet of such Person as of the date at which Indebtedness is to be
determined other than accounts payable, deferred revenue and


 


14





















 


accrued operating expenses incurred in the ordinary
course of business in each case to the extent not otherwise constituting
Indebtedness under the other terms of this definition;


 


(e)           net liabilities of such Person under
all Hedging Obligations;


 


(f)            whether or not so included as
liabilities in accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services (excluding any obligations of
any Borrower, or any wholly-owned Subsidiary of any Borrower, incurred pursuant
to the ATB Construction Contract), and indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; and


 


(g)           all Contingent Liabilities of such
Person in respect of any of the foregoing.


 


For all purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer.


 


“Indemnified Liabilities” is defined in
Section 10.4.


 


“Indemnified Parties” is defined in Section 10.4.


 


“Initial Draw Term Loan” is defined in Section 2.1.1.


 


“Initial Draw Term Loan Commitment Amount”
means on the Closing Date, $100,000,000, and zero thereafter, unless otherwise
increased pursuant to Section
2.1.6.


 


“Insurance Related Capital Expenditures”
means Capital Expenditures to the extent funded with proceeds received by the
Borrowers under any casualty insurance policy.


 


“Interest Charges” means, for any
period, for the MLP and its Subsidiaries on a consolidated basis, the sum of
(a) all interest, premium payments, fees (including fees payable with respect
to Letters of Credit but not including amortization of deferred financing
fees), charges and related expenses of the MLP and its Subsidiaries in
connection with borrowed money (including capitalized interest and
securitization expense) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of the Borrowers and their Subsidiaries
with respect to such period under capital leases that is treated as interest in
accordance with GAAP; provided that for purposes of calculation of twelve-month
Interest Charges for any period ending on or before September 30, 2005, such
Interest Charges shall be calculated pursuant to the following formula:


 


15





















 


 




	
  Interest Charges = 

  	
  X

  	
   x 365

  
	
  A

  






 


where as of any date of determination, (1) A equals the actual number
of calendar days elapsed since the Effective Date and (2) X equals Interest
Charges actually accrued by the MLP and its from the Effective Date through the
date of such calculation.


 


“Interest Period” means, relative to
any LIBO Rate Loans, the period beginning on (and including) the date on which
such LIBO Rate Loan is made or continued as, or converted into, a LIBO Rate
Loan pursuant to Section
2.3 or 2.4 and shall end on (but exclude) the
day which numerically corresponds to such date one, two, three or six months
thereafter (or, if such month has no numerically corresponding day, on the last
Business Day of such month), in each case as the Borrowers may select in their
relevant notice pursuant to Section 2.3 or 2.4; provided,
however,
that


 


(a)           the Borrowers shall not be permitted
to select Interest Periods to be in effect at any one time which have
expiration dates occurring on more than eight different dates;


 


(b)           Interest Periods commencing on the
same date for Loans comprising part of the same Borrowing shall be of the same
duration;


 


(c)           if such Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless such next following Business Day
is the first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and


 


(d)           no Interest Period may end later than
the date set forth in clause
(a) of the definition of “Revolving Commitment Termination Date”,
in the case of Interest Periods for Revolving Loans, or the date set forth in clause (b)
of the definition of “Stated
Maturity Date”, in the case of Interest Periods for Term
Loans; and


 


(e)           the Borrowers shall select Interest
Periods so as not to require a payment or prepayment of any LIBO Rate Loan
during an Interest Period for such Loan.


 


“Investment” means, relative to any
Person,


 


(a)           any loan or advance made by such
Person to any other Person (excluding commission, travel and similar advances
to officers and employees and extensions of trade credit, in each case made in
the ordinary course of business);


 


(b)           any Contingent Liability of such
Person; and


 


(c)           any ownership or similar interest
held by such Person in any other Person.


 


16





















 


The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the fair market value of such property.


 


“Investment Grade Charter” means each
Charter covering a Vessel initially owned by an Original Owner (i) entered into
by a Borrower with a charterer (other than a Borrower) acceptable to the
Administrative Agent rated not less than investment grade at the time such
Charter is entered into, and (ii) pursuant to which the relevant charterer
is required to make payments at a Negotiated Rate which equals or exceeds the
applicable rate set forth in Schedule A of the Support Agreement for such
Vessel.


 


“Lender Addendum Agreement” means a
Lender Addendum Agreement substantially in the form of Exhibit O
hereto.


 


“Lender Assignment Agreement” means a
Lender Assignment Agreement substantially in the form of Exhibit E
hereto.


 


“Lenders” is defined in the preamble
and shall include the Revolver Lenders and the Term Lenders.


 


“Letter of Credit” means any standby
letter of credit issued hereunder and includes any letters of credit issued
under the Existing Credit Facility.


 


“Letter of Credit Borrowing” means an
extension of credit resulting from a drawing under any Letter of Credit which
has not been reimbursed on the date when made or refinanced as a Borrowing.


 


“Letter of Credit Commitment Termination Date”
means the day that is seven days prior to the Stated Maturity Date for
Revolving Loans (or, if such day is not a Business Day, the next preceding Business
Day).


 


“Letter of Credit Confirmation” means
an application, confirmation and agreement for the issuance or amendment of a
letter of credit in the form from time to time in use by the Letter of Credit
Issuer.


 


“Letter of Credit Fee Rate” means a rate
per annum equal to the then Applicable Margin for LIBO Rate Loans that are
Revolving Loans.


 


“Letter of Credit Issuer” means CIBC in
its capacity as issuer of Letters of Credit hereunder, or any successor issuer
of Letters of Credit hereunder.


 


“Letter of Credit Loan” means, with
respect to each Lender, such Lender’s participation in any Letter of Credit
Borrowing.


 


17





















 


“Letter of Credit Obligations” means,
as at any date of determination, the aggregate undrawn face amount of all
outstanding Letters of Credit plus the aggregate of all Unreimbursed
Amounts, including all Letter of Credit Borrowings.


 


“Letter of Credit Sublimit” means an
amount equal to the lesser of the Revolving Commitments and Ten Million Dollars
($10,000,000).  The Letter of Credit
Sublimit is part of, and not in addition to, the Revolving Commitments.


 


“LIBO Rate” is defined in Section 3.2.1.


 


“LIBO Rate Loan” means a Loan bearing
interest, at all times during an Interest Period applicable to such Loan, at a
fixed rate of interest determined by reference to the LIBO Rate (Reserve
Adjusted).


 


“LIBO Rate (Reserve Adjusted)” is
defined in Section
3.2.1.


 


“LIBOR Office” means, relative to any
Lender, the office of such Lender designated as such in the Lender Addendum
Agreement or designated in the Lender Assignment Agreement executed by such
Lender or such other office of a Lender as designated from time to time by
notice from such Lender to the Borrowers and the Administrative Agent, whether
or not outside the United States, which shall be making or maintaining LIBO
Rate Loans of such Lender hereunder.


 


“LIBOR Reserve Percentage” is defined
in Section 3.2.1.


 


“Lien” means any security interest,
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or otherwise), charge against or interest in property to secure
payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever.


 


“Loan” means, as the context may
require, either a Revolving Loan or a Term Loan of any type.


 


“Loan Document” means (a) this
Agreement, the Notes, the Letter of Credit Confirmations, the Letters of
Credit, the Cash Collateral Control Agreement, each Guaranty, the Pledge Agreements,
the Mortgages, the Security Agreements, the Administrative Agent’s Fee Letter
and Arranger’s Fee Letter, the Collateral Agent’s Fee Letter and the Hedge
Agreements with the Secured Hedge Counterparties, and (b) each other agreement,
document or instrument delivered by General Partner, any Borrower or any other
Person (other than a Lender) in connection with this Agreement, as such may be
amended from time to time.


 


“Loan Party” means, collectively, each
Borrower, each Guarantor, and, after the date of this Agreement, any other
Affiliate or Subsidiary of MLP, other than General Partner, which executes a
Loan Document.


 


“Loss” means any loss (including any
condition covered by any of the insurance required to be maintained pursuant to
the Mortgages or this Agreement), theft, destruction, damage


 


18





















 


casualty, condemnation, taking, seizure, confiscation or requisition of
or with respect to any Vessel or any part thereof.


 


“Loss Event” is defined in the Cash
Collateral Control Agreement.


 


“Majority Lenders” means, at any time,
(i) with respect to any matter relating to the Term Loans or the Term
Commitments, Term Lenders holding more than 50% of the aggregate outstanding
principal amount of the Term Loans (or if no Term Loans are then outstanding,
more than 50% of the aggregate amount of the Term Commitments), (ii) with
respect to any matter relating to the Revolving Loans, the Letters of Credit or
the Revolving Commitments (including the Letter of Credit Sublimit), Revolver
Lenders holding more than 50% of the aggregate outstanding principal amount of
the Revolving Loans (or if no Revolving Loans are then outstanding, more than
50% of the aggregate amount of the Revolving Commitments), and (iii) with respect
to any other matter, Lenders holding more than 50% of the sum of the then
aggregate outstanding principal amount of the Loans and Letter of Credit
Obligations then held by the Lenders, plus the aggregate amount of the
unused Commitments as of such date.


 


“Management” means the chairman and
chief executive officer, president and chief operating officer, executive vice
president, vice president of operations, vice president of chartering and vice
president and chief financial officer, in each case of the General Partner as
of the date hereof.


 


“Management Agreement” means
collectively (i) that certain Professional Services Agreement by and among
Sterling Advisors, USS Vessel Management Inc. and United States Shipping LLC
dated September 13, 2002 and (ii) that certain Professional Services Agreement
by and between Sterling Advisors and United States Chemical Shipping LLC dated
May 16, 2003.


 


“Management Fee” means that certain
management fee payable pursuant to the Management Agreement but shall not
include (i) reimbursement of out-of-pocket expenses or (ii) any fee paid in
connection with termination of the Management Agreement to the extent such fee
is not paid by any Borrower.


 


“Material Adverse Effect” means a
material adverse effect on (a) the Business or otherwise on the business,
operations, properties, assets, liabilities, or condition (financial or
otherwise) of the Borrowers and their Subsidiaries taken as a whole, or (b) the
validity or enforceability of this Agreement or of any Transaction Document or
the validity, enforceability, perfection or priority of any Lien securing the
Obligations or any obligations to the Secured Hedge Counterparties under the
Hedge Agreements permitted pursuant to Section 7.2.2, or (c) the ability of
any Material Obligor to perform its obligations under this Agreement or any of
the other Transaction Documents to which it is a party.


 


“Material Charter” means, as of any
date, each Existing Charter, each Excluded Charter, each Investment Grade
Charter, and each other Charter approved in writing by the Administrative Agent
as a Material Charter, including all amendments, supplements and other
modifications thereto and replacement charters executed by any Borrower
pursuant to Section
7.2.12(b)(ii).


 


19





















 


“Material Event” is defined in Section 7.2.12(b)(ii).


 


“Material Obligor” means (i) each Loan
Party, (ii) Hess, during any Support Period, and (iii) any charterer under
a Material Charter.


 


“MLP” is defined in the preamble.


 


“MLP Agreement” means that certain Amended and
Restated Agreement of Limited Partnership of U.S. Shipping Partners L.P., dated
as of the Closing Date, by and between General Partner and the other parties
thereto, as amended, supplemented or otherwise modified from time to time.


 


“Monthly Payment Date” means the last
day of each calendar month or, if any such day is not a Business Day, the next
succeeding Business Day.


 


“Moody’s” means Moody’s Investors
Service, Inc., or any successor thereto.


 


“Mortgage” means (i) each of the
Amended and Restated First Preferred Fleet Mortgages and Amended and Restated
First Preferred Ship Mortgages executed and delivered pursuant to Section 5.1.7,
substantially in the form of Exhibit G hereto, and
(ii) any other mortgage delivered pursuant to Section 7.1.8 or Section 7.1.11.,
in each case, as amended, supplemented, restated or otherwise modified from
time to time.


 


“Negotiated Rate” means, with respect
to any Vessel, the contracted rate under any Charter, provided
that (i) if the contracted rate for a charter requires the Vessel owner to pay
voyage costs (including fuel costs, port charges, loading and/or unloading
charges, costs for assist boats, tolls in canals and similar costs), such rate
shall be converted to the estimated time charter equivalent for purposes of
this Agreement by taking the total freight revenue (including demurrage as and
to the extent accrued by the relevant Borrower under GAAP) for such charter,
subtracting any such voyage charges and dividing such number by the number of
days expected for the voyage, subject to subsequent adjustment to the actual
time charter equivalent after all actual freight revenue and voyage costs are
finally agreed between the relevant Borrower and the charterer, and (ii) the
contracted rate, for purposes of this definition, shall be reduced by an amount
equal to the Reimbursed Capital Expenditure Amounts.


 


“Net Income” means, for any period, for
the MLP and its Subsidiaries on a consolidated basis, the net income of the MLP
and its Subsidiaries from continuing operations after extraordinary items
(excluding extraordinary gains or losses from sales or other dispositions of
assets) for that period.


 


“Net Proceeds” means, with respect to
any Disposition of any asset by the Borrowers or any of their respective Subsidiaries
to any Person other than a Borrower, the aggregate amount of cash received by
or paid to or for the account of such Borrower or such Subsidiary from time to
time (whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication)
(a) reasonable out-of-pocket transaction fees and other costs relating to
such Disposition, (b) the amount of taxes payable by such Borrower or such


 


20





















 


Subsidiary in connection with or as a result of such Disposition,
(c) any amounts required to be placed in escrow by the parties to such
Disposition in connection therewith, and (d) any amounts MLP reasonably
determines are required to meet post-closing purchase price adjustments in
connection with such Disposition all as certified by an Authorized Officer to
the Administrative Agent at the time of such transaction, provided in the case
of clauses (a)
and (b)
to the extent, but only to the extent, that the amounts so deducted are
properly attributable to such transaction or to the asset that is the subject
thereof, and provided in the case of clauses (c) and (d) that
any amounts placed in escrow or initially excluded from Net Proceeds to meet
such post-closing purchase price adjustments that are released to the Borrowers
or determined by MLP not to be payable by the Borrowers shall become Net
Proceeds once such amounts are so released or determined not to be payable and
shall thereupon be applied in accordance with Section 3.1(d).


 


“New Borrowers” means each of the
Borrowers that was not one of the Existing Borrowers.


 


“Non-U.S. Lender” has the meaning set
forth in Section
4.6(c).


 


“Note” means, as the context may
require, either a Revolving Note or a Term Note.


 


“Obligations” means all obligations
(monetary or otherwise) of each of the Borrowers and each other Loan Party
arising under or in connection with this Agreement, the Notes or any other Loan
Document.


 


“Operating LLC” is defined in the preamble.


 


“Original Owners” means each of ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New
York LLC and ITB Philadelphia LLC.


 


“Organic Document” means, relative to
any Person, its respective certificate or articles of incorporation,
organization or formation, by-laws, partnership agreement, limited liability
company agreements, and all shareholder, partner, member or unitholder
agreements, voting trusts and similar arrangements applicable to any of its
respective authorized shares of capital stock, partnership interest, membership
interest or other equity interests.


 


“Participant” is defined in Section 10.11.


 


“PBGC” means the Pension Benefit
Guaranty Corporation and any entity succeeding to any or all of its functions
under ERISA.


 


“Pension Plan” means a “pension plan”,
as such term is defined in section 3(2) of ERISA, which is subject to Title IV
of ERISA (other than a multiemployer plan as defined in section 4001(a)(3) of
ERISA), and to which each of the Borrowers or any corporation, trade or
business that is, along with each Borrowers, a member of a Controlled Group,
may have liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.


 


21





















 


“Percentage” means, relative to any
Lender, at any time, the fraction (expressed as a percentage), the numerator of
which is the Credit Exposure of such Lender at such time and the denominator of
which is the aggregate Credit Exposures of all the Lenders at such time.


 


“Person” means any natural person,
corporation, limited liability company, partnership, firm, association, trust,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.


 


“Plan” means any Pension Plan or
Welfare Plan.


 


“Pledge Agreements” means each of
(i) the Pledge Agreements executed and delivered by MLP, Operating LLC,
Charter LLC, USCS Chartering and Chemical Pioneer pursuant to Section 5.1.5,
substantially in the form of Exhibit H hereto, and
(ii) any other Pledge Agreement delivered pursuant to Section 7.1.11,
in each case, as amended, supplemented, restated or otherwise modified from
time to time.


 


“Pro Forma Balance Sheet” is defined in
Section 6.5(b).


 


“Projections” means the projections of
the revenues, expenses and operating costs in respect of the Vessels prepared
by General Partner, delivered to the Administrative Agent by the Borrowers and
a copy of which is attached hereto as Exhibit Q.


 


“Quarterly Payment Date” means the last
day of each March, June, September, and December or, if any such day is not a
Business Day, the next succeeding Business Day.


 


“Register” is defined in Section 2.6.


 


“Reimbursed Capital Expenditure Amounts”
is defined in Section
7.2.7(b).


 


“Related Parties” shall mean (a) in the
case of an individual, the immediate family of such Person, a trust solely for
the benefit of such Person or his immediately family, the estate or legal
representatives of such Person, and any partnership, corporation or other
entity wholly-owned by such Person or his immediately family, (b) in the case
of a partnership, any of its partners (limited or general), the estates of such
partners, any liquidating trust for the benefit of the partners of such
partnership and any partnership, corporation or other entity wholly-owned by
such partnership (and, if any partner is itself a partnership, its partners
(limited or general), and if any such partner is itself a corporation or
limited liability company, its stockholders or members, respectively), (c) in
the case of a holder of Class A Units or Class B Units (other than any
Executive) (each such term as defined in the Shipping Master’s limited
liability company agreement as in effect on the Closing Date and used herein
with the same meaning), any other Person who holds Class A Units or Class B
Units, (d) in the case of a limited liability company, any of its members or
economic owners, or any entity wholly-owned by, wholly-owning or wholly-owned
by the same entity which wholly-owns such member or economic owner, and (e) in
the case of a corporation, any entity wholly-owned by, wholly-owning, or
wholly-owned by the same entity which wholly-owns the corporation.


 


“Release” means a “release”, as such
term is defined in CERCLA.


 


22





















 


“Relevant Secured Hedge Obligations”
means, with respect to any prepayment (whether voluntary or involuntary) of any
Credit Extension to be made on any date, the amount, if any, required to be
paid under any Hedge Agreement with a Secured Hedge Counterparty to terminate
on such date that portion of the Hedging Obligations which cover a notional
amount in excess of 100% of the Term Loans scheduled to be outstanding at any
time after the relevant prepayment is made.


 


“Requirements of Law” means, as to any
Person, the Organic Documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other governmental
authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.


 


“Resource Conservation and Recovery Act”
means the Resource Conservation and Recovery Act, 42 U.S.C. Section 690, et  seq., as
in effect from time to time.


 


“Restricted Loss Proceeds Account” is
defined in the Cash Collateral Control Agreement.


 


“Revolver Lenders” means each Lender
having a Revolving Commitment.


 


“Revolver Percentage” means, relative
to any Revolver Lender at any time, a fraction (expressed as a percentage), the
numerator of which is such Revolver Lender’s Revolving Commitment at such time,
and the denominator of which is the aggregate amount of all Revolving
Commitments of all the Revolver Lenders at such time.


 


“Revolving Commitment” means, relative
to any Revolver Lender, such Lender’s obligation to make Revolving Loans
pursuant to Section
2.1.2 and to issue or participate in Letters of Credit
pursuant to Section
2.1.4 in the amount designated as its Revolving Commitment in
the relevant Lender Addendum Agreement, Lender Assignment Agreement or
Additional Lender Certificate executed by such Lender, as such amount may be
adjusted from time to time pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11.1.


 


“Revolving Commitment Amount” means, on
any date, Fifty Million Dollars ($50,000,000) as such amount may be reduced
from time to time pursuant to Section 2.2 or Section 3.1(d)
and as such amount may be increased pursuant to Section 2.1.6.


 


“Revolving Commitment Termination Date”
means the earliest of


 


(a)           November 2, 2009;


 


(b)           the date on which the Revolving
Commitment Amount is terminated in full or reduced to zero pursuant to Section 2.2;


 


(c)           the date on which any Commitment
Termination Event occurs; and


 


(d)           the date on which all Term Loans are
indefeasibly paid in full.


 


23





















 


Upon the occurrence of any event described in clause (b),
(c)
or (d),
the Revolving Commitments shall terminate automatically and without any further
action.


 


“Revolving Loan” is defined in Section 2.1.2.


 


“Revolving Note” means a promissory
note of the Borrowers payable to any Revolver Lender, in the form of Exhibit A
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of the Borrowers to
such Revolver Lender resulting from outstanding Revolving Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.


 


“Secured Hedge Counterparties” means
each Lender, Affiliate of a Lender or Assignee of a Lender who, in each case,
is a counterparty to a Hedge Agreement otherwise permitted under Section 7.2.2.


 


“Secured Parties” means each of the
Administrative Agent, the Collateral Agent, the Secured Hedge Counterparties,
the Letter of Credit Issuer and each Lender, in each case, to the extent of any
obligations owing to such Person by any Borrower pursuant to any Transaction
Document.


 


“Security Agreements” means each of
(i) the Security Agreements executed and delivered by the New Borrowers
other than ATB LLC pursuant to Section 5.1.6, substantially in the
form of Exhibit I-1
hereto, as amended, supplemented, restated or otherwise modified from time to
time, (ii) each of the Security Agreements dated as of September 13,
2002, executed and delivered by each of the Original Owners and Charter LLC, as
amended by First Amendment to Security Agreement dated as of April 13,
2004, as amended by Amendment to Security Agreement, as amended, supplemented,
restated, or otherwise modified from time to time; (iii) each of the
Security Agreements, dated as of April 13, 2004, executed and delivered by
each of Chemical Pioneer, Charleston, and Chemical Chartering, as amended by
Amendment to Security Agreement, as amended, supplemented, restated or
otherwise modified from time to time; (iv) the Security Agreement, dated
as of September 17, 2004, executed and delivered by ATB LLC, as amended by
Amendment to Security Agreement, as amended, supplemented, restated or
otherwise modified from time to time; and (v) any other security agreement
delivered pursuant to Section
7.1.8 or 7.1.11.


 


“S&P” means Standard & Poor’s
Rating Services, a division of The McGraw-Hill Companies, Inc., or any
successor thereto.


 


“Stated Maturity Date” means


 


(a)           in the case of any Revolving Loan,
November 2, 2009; and


 


(b)           in the case of any Term Loan,
April 30, 2010.


 


“Sterling” means Sterling Investment
Partners, L.P.


 


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“Subordinated Debt” means all unsecured
Indebtedness of any of the Borrowers for money borrowed which is subordinated,
upon terms satisfactory to the Administrative Agent and the Majority Lenders,
in right of payment to the payment in full in cash of all Obligations.


 


“Subsidiary” means, with respect to any
Person, any corporation, limited liability company, partnership or other entity
of which more than 50% of the outstanding capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other managers of such corporation, limited liability company,
partnership or other entity (irrespective of whether at the time capital stock
or other ownership interests of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person.


 


“Support Agreement” means that certain
Support Agreement dated September 13, 2002 by and between USS Chartering
LLC and Hess a copy of which has been delivered to the Administrative Agent.


 


“Support Period” means any period
occurring prior to the earlier of (i) the date of the termination in full
of the Support Agreement in accordance with its terms, and (ii) the first date
when all the Vessels initially owned by the Original Owners are subject to
Excluded Charters and Investment Grade Charters covering a period for each such
Vessel ending on or after September 13, 2007 entered into in compliance with
this Agreement who have executed and delivered Third Party Consents.


 


“Taxes” is defined in Section 4.6.


 


“Terminated Security Documents” is defined
in Section 10.19.


 


“Term Lender” means each Lender having
a Term Percentage.


 


“Term Loan” means a Delayed Draw Term
Loan or an Initial Draw Term Loan.


 


“Term Loan Commitment” means, relative
to any Term Lender, such Lender’s obligation to make Term Loans pursuant to Section 2.1.1 and Section
2.1.3 in the amount designated as its Term Loan Commitment in
the relevant Lender Addendum Agreement, Lender Assignment Agreement or
Additional Lender Certificate executed by such Term Lender, as such amount may be
adjusted from time to time pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11.1.


 


“Term Loan Commitment Amount” means the
sum of the Initial Draw Term Loan Commitment Amount and the Delayed Draw Term
Loan Commitment Amount (which, for clarity, means, (i) on the Closing Date,
$130,000,000, (ii) on any date after the Closing Date but prior to the Delayed
Draw Term Loan Commitment Termination Date, $30,000,000, and (iii) zero
thereafter, unless otherwise increased pursuant to Section 2.1.6).


 


“Term Note” means a promissory note of
the Borrowers payable to any Term Lender, in the form of Exhibit B
hereto (as such promissory note may be amended, endorsed or otherwise


 


25





















 


modified from time to time), evidencing the aggregate Indebtedness of
the Borrowers to such Term Lender resulting from outstanding Term Loans, and
also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.


 


“Term Percentage” means, relative to
any Term Lender at any time, a fraction (expressed as a percentage), the
numerator of which is such Term Lender’s Term Loan Commitment at such time, and
the denominator of which is the aggregate amount of all Term Loan Commitments
of all the Term Lenders at such time.


 


“Third Party Consents” means each of
those certain consents and agreements relating to the Existing Charters, and
acknowledgements thereof, executed and delivered pursuant to the Existing
Credit Facility and Section
5.1.3, and consents and agreements in substantially the form
of Exhibit K-2
hereto, from time to time delivered to the Collateral Agent covering Charters
executed as replacement charters pursuant to Section 7.2.12(b)(ii), and certain
Excluded Charters, in each case, as amended, supplemented, restated or
otherwise modified from time to time.


 


“Total Debt Interest Coverage Ratio”
means, as of any date of determination, the ratio of (a) the sum of (i)
Consolidated Pro Forma EBITDA for the period of the four prior Fiscal Quarters
of the MLP ending on such date and (ii) lease and rental expense incurred by
the MLP and its Subsidiaries on a consolidated basis for such period to (b) the
sum of (i) consolidated Interest Charges incurred during such period and (ii)
lease and rental expense incurred during such period.


 


“Total Debt Leverage Ratio” means, as
of any date of determination, for the MLP and its Subsidiaries on a
consolidated basis, the ratio of (a) consolidated Debt as of such date to (b)
Consolidated Pro Forma EBITDA for the twelve-month period ending on the last
day of the calculation period.


 


“Total Fixed Charge Coverage Ratio” means, as
of any date, for the MLP and its Subsidiaries on a consolidated basis, the
ratio for the period of four consecutive Fiscal Quarters of the MLP ending on
such date (or if less, the number of full Fiscal Quarters of the MLP elapsed
since the Closing Date), of (a) an amount equal to (i) Consolidated Pro
Forma EBITDA for the calculation period ending on such date, minus
(ii) Capital Expenditures for such calculation period, but excluding Insurance
Related Capital Expenditures and all expenditures for the construction of the
ATB, to (b) the sum of (i)
Interest Charges on all Debt payable during such calculation period (determined
with respect to any Subordinated Debt without giving effect to the
subordination), plus (ii) all scheduled principal payments required to
be made on all Debt during such calculation period (determined with respect to
any Subordinated Debt without giving effect to the subordination) plus
(iii) net cash taxes actually paid or payable by the Borrowers during such
period (for the avoidance of doubt, to the extent such taxes are paid directly
by the General Partner or indirectly by the General Partner as a result of a
loan or advance by the General Partner, for purposes hereof such taxes
will not be considered to be taxes actually paid or payable by the Borrowers
except to the extent, and when, such loan or advance is repaid to the General
Partner) plus
(iv) payments of the Management Fee actually made for such calculation period.


 


26





















 


“Total Prepayment Amount” means, with
respect to any prepayment required to be made on any date pursuant to (a) Section 3.1(d),
the positive difference, if any of (i) Net Proceeds in excess of $1,000,000
received by the Borrowers and their Subsidiaries with respect to all
Dispositions occurring since the Closing Date and not previously applied to
prepayments of Loans and Unreimbursed Amounts and cash collateralization of the
Letters of Credit pursuant to Section 3.1(d)  minus
(ii) Net Proceeds from any Disposition or series of Dispositions the proceeds
of which were used within 90 days of the earlier of the receipt of such Net
Proceeds or the consummation of such Disposition or series of Dispositions to
replace the assets or property that were the subject of such Disposition or
series of Dispositions, (b) Section 3.1(e), the positive
difference, if any, of (i) any insurance proceeds received by a Borrower in
connection with a Loss Event with respect to a Vessel minus
(ii) the amount of such proceeds applied or permitted to be applied by such
Borrower to pay the cost of restoration or repair of such Vessel in accordance
with Section 3(h) of the Cash Collateral Control Agreement, and (c) Section 3.1(f).


 


“Transaction Document” means each Loan
Document, the Support Agreement, each Charter, the Third Party Consents, the
USS Chartering Leases, the Chemical Chartering Lease, the Hedge Agreements, the
ATB Construction Contract, the USCS Chartering Leases and each other document,
agreement or instrument delivered in connection with this Agreement.


 


“type” means, relative to any Loan, the
portion thereof, if any, being maintained as a Base Rate Loan or a LIBO Rate
Loan.


 


“United States” or “U.S.”
means the United States of America, its fifty States and the District of
Columbia.


 


“Unreimbursed Amount” is defined in Section 2.5.2.


 


“USCS Chartering” is defined in the
preamble.


 


“USCS Chartering Lease” means each of
(a) that certain bareboat charter agreement entered into by Chemical Chartering
with Charleston, and assigned to USCS Chartering, whereby Chemical Chartering
agrees to charter the M/V Charleston and (b) each bareboat charter agreement
entered into by USCS Chartering with any Loan Party that owns a Vessel, whereby
USCS Chartering agrees to charter such Vessel.


 


“USS Chartering Lease” means each of
(a) those certain bareboat charter agreements dated September 13, 2002
entered into by Charter LLC with each of the Original Owners whereby Charter
LLC agrees to charter certain vessels and (b) each bareboat charter agreement
entered into by Charter LLC with any Loan Party that owns a Vessel, whereby
Charter LLC agrees to charter such Vessel. 



 


“Vessel Acquisition” means the direct
or indirect acquisition by any Borrower or Subsidiary of any Borrower of any
vessel, including the acquisition of any Person owning one or more vessels, in
which such vessel has been operating for at least six months prior to the
vessel’s acquisition by Borrower (and, for clarity, excluding the ATB).


 


27





















 


“Vessels” means each of (i) the vessels
more specifically described in Schedule II hereto, (ii) the ATB upon
its certification, registration and delivery to the Borrowers, and (iii) any
vessel for which a Mortgage is delivered pursuant to Section 7.1.8 or Section 7.1.11.


 


“Welfare Plan” means a “welfare plan”,
as such term is defined in section 3(1) of ERISA.


 


SECTION 1.2.  
Use of Defined Terms. 
Unless otherwise defined or the context otherwise requires, terms for
which meanings are provided in this Agreement shall have such meanings when
used in the Disclosure Schedule and in each Note, Borrowing Request,
Continuation/Conversion Notice, Loan Document, notice and other communication
delivered from time to time in connection with this Agreement or any other Loan
Document.


 


SECTION 1.3.  
Cross-References. 
Unless otherwise specified, references in this Agreement and in each
other Loan Document to any Article or Section are references to such Article or
Section of this Agreement or such other Loan Document, as the case may be, and,
unless otherwise specified, references in any Article, Section or definition to
any clause are references to such clause of such Article, Section or
definition.


 


SECTION 1.4.  
Accounting and Financial
Determinations.  Unless otherwise specified,
all accounting terms used herein or in any other Loan Document shall be
interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared in accordance with, those generally accepted accounting principles (“GAAP”)
applied in the preparation of the financial statements referred to in Section 6.5.


 


ARTICLE II


 


COMMITMENTS, BORROWING PROCEDURES
AND NOTES


 


SECTION 2.1.  
Commitments. 
On the terms and subject to the conditions of this Agreement (including Article V),
each Lender severally agrees to make Loans and Letter of Credit Loans pursuant
to the Commitments described in this Section 2.1.


 


SECTION 2.1.1.  
Initial Draw Term Loan
Commitment.  On the Closing Date, each Term Lender will
make one Loan (relative to such Term Lender, its “Initial Draw Term Loan”) to the
Borrowers equal to such Term Lender’s Term Percentage of the aggregate amount
of the Borrowing of Initial Draw Term Loans requested by the Borrowers to be
made on such day which Initial Draw Term Loans will be a restructuring,
rearranging, renewal, extension and continuation of the Term Loans (under and
as defined in the Existing Credit Facility); provided, however, that Chemical
Pioneer and its wholly-owned Subsidiaries shall not be jointly and severally
liable as Borrowers with respect to any Borrowings of Initial Draw Term Loans
in an amount in excess of $2,500,000.  No
amounts paid or prepaid with respect to the Initial Draw Term Loans may be
reborrowed.


 


SECTION 2.1.2.  
Revolving Commitment. 
From time to time on any Business Day occurring prior to the Revolving
Commitment Termination Date, each Revolver Lender will make Loans (relative to
such Revolver Lender, its “Revolving Loans”) to the Borrowers
equal to


 


28





















 


such Revolver Lender’s Revolver Percentage of the aggregate amount of
the Borrowing of Revolving Loans requested by the Borrowers to be made on such
day.  On the terms and subject to the
conditions hereof, the Borrowers may from time to time borrow, prepay and
reborrow Revolving Loans.


 


SECTION 2.1.3.   Delayed Draw Term Loan
Commitment.  At any time, but no more
than six different times, on any Business Day occurring prior to the Delayed
Draw Term Loan Commitment Termination Date, each Delayed Draw Term Lender will
make one Loan (relative to such Delayed Draw Term Lender, its “Delayed Draw Term Loan”)
to the Borrowers equal to such Delayed Draw Term Lender’s Term Percentage of
the aggregate amount of the Borrowing of Delayed Draw Term Loans requested by
the Borrowers to be made on such day.  No
amounts paid or prepaid with respect to the Delayed Draw Term Loans may be
reborrowed.


 


SECTION 2.1.4.  
Letter of Credit
Commitment.  The Letter of Credit Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Section 2.1.4,
(1) from time to time on any Business Day during the period from the Closing
Date until the Letter of Credit Commitment Termination Date, to issue Letters
of Credit for the joint and several account of the Borrowers and to amend
Letters of Credit previously issued by it (including Letters of Credit issued
under the Existing Credit Facility) as identified in Item 2.1.4 of Schedule I,
in accordance with Section
2.3.2, provided, however, that Chemical Pioneer, and
its wholly-owned Subsidiaries, shall not be a Borrower or joint and severally
liable as a Borrower for any Letter of Credit issued or outstanding as of the
Closing Date as so identified, and (2) to honor drafts under the Letters of
Credit pursuant to the terms of the Letters of Credit.  The Revolver Lenders severally hereby agree
to participate in Letters of Credit issued hereunder (including any Letters of
Credit issued under the Existing Credit Facility and outstanding on the Closing
Date); provided
that the Letter of Credit Issuer shall not be obligated to make any Credit
Extension with respect to any Letter of Credit, and no Revolver Lender shall be
obligated to participate in, any Credit Extension with respect to a Letter of
Credit if as of the date of such Credit Extension, (x) the aggregate
outstanding amount of all Letter of Credit Obligations and all Revolving Loans
would exceed the Revolving Commitments, (y) the aggregate outstanding amount of
the Revolving Loans of any Revolver Lender, plus such Revolver Lender’s Revolver
Percentage of the aggregate outstanding amount of all Letter of Credit
Obligations would exceed such Revolver Lender’s Revolver Percentage of the
Revolving Commitments, or (z) the aggregate outstanding amount of all Letter of
Credit Obligations would exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.  Each Letter of Credit issued under the
Existing Credit Facility and outstanding on the Closing Date shall be deemed to
be a Letter of Credit issued hereunder.


 


SECTION 2.1.5.  
Lenders Not Permitted or
Required To Make Loans or Letter of Credit Extensions. 
No Lender shall be permitted or required:


 


(a)           to make an Initial Draw Term Loan if,
after giving effect thereto, the aggregate original principal amount of all
Initial Draw Term Loans


 


29





















 


(i)            of all Term Lenders would exceed the
Initial Draw Term Loan Commitment Amount, or


 


(ii)           of such Term Lender would exceed such
Term Lender’s Term Percentage of the Initial Draw Term Loan Commitment Amount;
or


 


(b)           to make a Delayed Draw Term Loan if,
after giving effect thereto, the aggregate original principal amount of all
Delayed Draw Term Loans


 


(i)            of all Delayed Draw Term Lenders
would exceed the Delayed Draw Term Loan Commitment Amount, or


 


(ii)           of such Delayed Draw Term Lender
would exceed such Delayed Draw Term Lender’s Term Percentage of the Delayed
Draw Term Loan Commitment Amount; or


 


(c)           to make any Revolving Loan or to make
or participate in a Credit Extension relating to a Letter of Credit if, after
giving effect thereto, the aggregate outstanding principal amount of all
Revolving Loans and Letter of Credit Obligations


 


(i)            of all Revolver Lenders would exceed
the Revolving Commitment Amount, or


 


(ii)           of such Revolver Lender would exceed
such Revolver Lender’s Revolver Percentage of the Revolving Commitment Amount;
or


 


(d)           make any Credit Extension with respect
to any Letter of Credit if


 


(i)            any order, judgment or decree of any
governmental authority or arbitrator shall by its terms purport to enjoin or
restrain the Letter of Credit Issuer from making such Credit Extension, or any
law applicable to the Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Letter of Credit Issuer shall prohibit, or request that
the Letter of Credit Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Letter of Credit Issuer with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Letter of Credit Issuer is not otherwise
compensated hereunder) not in effect on the date hereof, or shall impose upon
the Letter of Credit Issuer any unreimbursed loss, cost or expense which was
not applicable on the date hereof and which the Letter of Credit Issuer in good
faith deems material to it;


 


(ii)           the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance
unless such Letter of Credit has been extended in accordance with its terms and
the terms of this Agreement;


 


30





















 


(iii)          the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Commitment Termination
Date;


 


(iv)          the making of such Credit Extension
would violate one or more policies of the Letter of Credit Issuer; or


 


(v)           such Letter of Credit is denominated
in a currency other than Dollars.


 


SECTION 2.1.6.  
Increase in Commitments. 
On or before November 2, 2006, so long as (i) no Default or Event of
Default shall have occurred and be continuing, and (ii) the proceeds of any
Credit Extensions utilizing such increased Commitments are used to construct or
acquire new articulated tug-barge vessels (including the ATB) or to fund a
Vessel Acquisition, (iii) each Lender shall have been offered a pro rata share
of such proposed increase, and (iv) on the effective date of such increase, no
LIBO Rate Loans shall be outstanding (or if any LIBO Rate Loans are
outstanding, the effective date of such increase shall be the last day of the
Interest Period in respect of such LIBO Rate Loans), Borrowers may increase the
Term Loan Commitment Amount or the Revolving Commitment Amount, or both (such
increase herein the “Greenshoe
Increase”), at the Arranger’s and the Borrowers’ mutual
discretion, in an aggregate amount for all such increases of up to
$90,000,000.  Each Lender shall have the
option, but no Lender shall have any obligation, to increase its Commitment
hereunder in connection with any such increase. 
In the event that it is necessary to increase the Applicable Margin in
respect of such Greenshoe Increase (herein the “Greenshoe Margin”) such that the
Applicable Margin on Term Loans would be less than such increased Applicable
Margin on the Greenshoe Increase, then the Applicable Margin in respect of the
Term Loan shall automatically be deemed increased to the Greenshoe Margin.  In the event that any fee (including any
upfront fee, or signing fee or any discount to par value) payable to any Lender
making a new Commitment or increasing its Commitment as part of the Greenshoe
Increase (herein a “Greenshoe Increasing Lender”) exceeds 25 basis points on
such Lender’s share of such Greenshoe Increase, then the Borrowers shall pay to
each of the Lenders holding a Term Loan Commitment which are not Greenshoe
Increasing Lenders an amount equal to the product of (x) such Lender’s Term
Loan Commitment Amount times (y) the number of basis points by which
such fee payable to such Greenshoe Increasing Lenders exceeds 25 basis points
(the “Increased Fee”).  Such Increased Fee shall be paid upon the
effectiveness of such Greenshoe Increase.


 


If the Borrowers desire to effect a Greenshoe
Increase, the Borrowers and the financial institution(s) that the Borrowers
propose to become a Lender hereunder, and, if applicable, the existing
Lender(s) that the Borrowers propose to increase their existing Commitments
shall (subject at all times to the consent of each such financial institution
or each such existing Lender, as applicable) execute and deliver to the
Administrative Agent a certificate substantially in the form of Exhibit N
hereto (an “Additional
Lender Certificate”). 
Upon receipt of such Additional Lender Certificate (1) any such
additional Lender shall be deemed to be a party in all respect to this
Agreement and the other Loan Documents as of the effective date set forth in
such Additional Lender Certificate and (2) upon the effective date set forth in
such Additional Lender Certificate, any such Lender party to the Additional
Lender Certificate shall purchase a pro rata portion of the outstanding Loans
(and participation interests in the Letters of Credit) of each of


 


31





















 


the current Lenders such that the Lenders (including any additional
Lender, if applicable) shall hold their Percentage of the outstanding Loans
(and participation interests).


 


SECTION 2.2.   Reduction
of the Commitments.  


 


SECTION 2.2.1.  
Optional Reduction of
Revolving Commitment Amounts.  The Borrowers
may, from time to time on any Business Day occurring after the time of the
initial Borrowing hereunder, voluntarily reduce the amount of the Revolving
Commitment Amount to an amount not less than the outstanding amount of all
Revolving Loans and all Letter of Credit Obligations; provided,
however,
that all such reductions shall require at least three Business Days’ prior
notice to the Administrative Agent and the Letter of Credit Issuer and be
permanent, and any partial reduction of the Revolving Commitment Amount shall
be in a minimum amount of $1,000,000 and in an integral multiple of
$100,000.  Any reduction of the Revolving
Commitment shall be applied to the Revolving Commitment of each Revolver Lender
according to its Revolver Percentage. 
All commitment fees accrued until the effective date of any reduction of
the Revolving Commitments shall be paid on the effective date of such reduction


 


SECTION 2.2.2.   Mandatory Reduction of the
Revolving Commitments.  The Revolving
Commitments shall be mandatorily and automatically reduced on the dates and in
the amounts described in Section 3.1.  Any such reduction of the Revolving
Commitment shall be applied to the Revolving Commitment of each Revolver Lender
according to its Revolver Percentage. 
All commitment fees accrued until the effective date of any reduction of
the Revolving Commitments shall be paid on the effective date of such
reduction.


 


SECTION 2.3.  
Borrowing Procedure.


 


SECTION 2.3.1.  
Procedure for Loans. 
By delivering a Borrowing Request to the Administrative Agent on or
before 10:00 a.m., New York time, on a Business Day, the Borrowers may from
time to time irrevocably request, that a Borrowing be made (i) in the case
of Base Rate Loans, on the same Business Day, in a minimum amount of $250,000
and an integral multiple of $100,000, or in the unused amount of the applicable
Commitment, and (ii) in the case of LIBO Rate Loans, on not less than three nor
more than five Business Days’ notice, in a minimum amount of $1,000,000 and an
integral multiple of $100,000, or in the unused amount of the applicable Commitment;
provided,
however,
that each Borrowing Request for a Delayed Draw Term Loan shall be for a
Borrowing in a minimum amount of $5,000,000 and in an integral multiple of
$500,000, or in the unused amount of the Delayed Draw Term Loan Commitment Amount;
provided, further, that each Borrowing Request for a Delayed Draw
Term Loan or for a Loan as a result of a Greenshoe Increase shall be made on
not less than five Business Days’ notice to the Administrative Agent.  On the terms and subject to the conditions of
this Agreement, each Borrowing shall be comprised of the type of Loans, and
shall be made on the Business Day specified in such Borrowing Request.  On or before 3:00 p.m. (New York time) on
such Business Day each Lender shall deposit with the Administrative Agent same
day funds in an amount equal to such Lender’s Revolver Percentage (if any) in
the case of Revolving Loans or such Lender’s Term Percentage (if any) in the
case of Term Loans of the requested Borrowing. 
Such deposit will be made to an account which the Administrative Agent
shall specify from time to time by notice to the Lenders.  To the extent funds are received from the
Lenders, the Administrative Agent shall make such funds available to the Borrowers
by wire


 


32





















 


transfer to the accounts the Borrowers shall have specified in their
Borrowing Request.  No Lender’s
obligation to make any Loan shall be affected by any other Lender’s failure to
make any Loan.


 


SECTION 2.3.2.  
Procedures for Making of
Letter of Credit Extensions.  (a) Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrowers delivered to the Letter of Credit Issuer (with a copy
to the Administrative Agent) in the form of a Letter of Credit Confirmation,
appropriately completed and signed by an Authorized Officer of any of the
Borrowers.  Such Letter of Credit
Confirmation must be received by the Letter of Credit Issuer and the
Administrative Agent not later than 11:00 a.m., New York time, at least five
Business Days (or such later date and time as the Letter of Credit Issuer may
agree in a particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Confirmation shall
specify in form and detail satisfactory to the Letter of Credit Issuer: (i) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (ii) the amount thereof; (iii) the expiry date thereof; (iv) the
name and address of the beneficiary thereof; (v) the documents to be presented
by such beneficiary in case of any drawing thereunder; (vi) the full text of
any certificate to be presented by such beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Letter of Credit Issuer may
require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Confirmation shall specify in form and detail satisfactory to the Letter of
Credit Issuer (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment thereof (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as the Letter of Credit Issuer
may require.  Each Revolver Lender shall
be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the Letter of Credit Issuer a participation in each Letter of Credit and
each Credit Extension relating to a Letter of Credit in an amount equal to the
product of such Revolver Lender’s Revolver Percentage times the
amount of such Letter of Credit.


 


SECTION 2.4.  
Continuation and
Conversion Elections.  By delivering
a Continuation/Conversion Notice to the Administrative Agent on or before 10:00
a.m., New York time, on a Business Day, the Borrowers may from time to time
irrevocably elect, on not less than three nor more than five Business Days’
notice that all, or any portion of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be
converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan at least three Business Days before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall, on such last
day, automatically convert to a Base Rate Loan); provided, however, that (i) each such conversion
or continuation shall be pro rated among the applicable outstanding Loans of
all Lenders, (ii) no portion of the outstanding principal amount of any
Loans may be continued as, or be converted into, LIBO Rate Loans after any
Default has occurred and is continuing, and (iii) each conversion of a Base
Rate Loan into a LIBO Rate Loan must be in an aggregate minimum amount of
$1,000,000 and an integral multiple of $100,000.


 


33





















 


SECTION 2.5.  
Funding.


 


SECTION 2.5.1.  
Funding of Loans. 
Each Lender may, if it so elects, fulfill its obligation to make,
continue or convert LIBO Rate Loans hereunder by causing one of its foreign
branches or Affiliates (or an international banking facility created by such
Lender) to make or maintain such LIBO Rate Loan; provided, however, that such LIBO Rate Loan
shall nonetheless be deemed to have been made and to be held by such Lender,
and the obligation of the Borrowers to repay such LIBO Rate Loan shall
nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. 
In addition, the Borrowers hereby consent and agree that, for purposes
of any determination to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it
shall be conclusively assumed that each Lender elected to fund all LIBO Rate
Loans by purchasing Dollar deposits in its LIBOR Office’s interbank eurodollar
market.


 


SECTION 2.5.2.  
Drawings and
Reimbursements; Funding of Participations.


 


(a)           Upon any drawing under any Letter of
Credit, the Letter of Credit Issuer shall notify the Borrowers and the
Administrative Agent thereof.  Not later
than 3:00 p.m., New York time, on the date of any payment by the Letter of
Credit Issuer under a Letter of Credit (each such date, a “Draw Date”),
the Borrowers shall reimburse the Letter of Credit Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.  If the Borrowers fail to so reimburse the
Letter of Credit Issuer by such time, the Administrative Agent shall promptly
notify each Revolver Lender of the Draw Date, the amount of the unreimbursed
drawing (the “Unreimbursed
Amount”), and such Revolver Lender’s Revolver Percentage
thereof.  In such event, the Borrowers
shall be deemed to have requested a Borrowing of Base Rate Loans pursuant to
the Revolving Commitments to be disbursed on the Draw Date in an amount equal
to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section
2.3.1 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Revolving Commitments
and the conditions set forth in Section 5.2.  Any notice given by the Letter of Credit
Issuer or the Administrative Agent pursuant to this Section 2.5.2 (a) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.


 


(b)           Each Revolver Lender (including the
Revolver Lender acting as Letter of Credit Issuer) shall upon any notice
pursuant to Section
2.5.2 deposit same day funds with the Administrative Agent
for the account of the Letter of Credit Issuer in an amount equal to its
Revolver Percentage of the Unreimbursed Amount not later than 1:00 p.m., New
York time, on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 2.5.2(c), each Revolver Lender
that so makes funds available shall be deemed to have made a Base Rate Loan
pursuant to its Revolving Commitment to the Borrowers in such amount.  Such deposit will be made to an account which
the Administrative Agent shall specify from time to time by notice to the
Revolver Lenders.  To the extent funds
are received by the Administrative Agent from the Revolver Lenders, the
Administrative Agent shall remit the funds so


 


34





















 


received to the Letter of Credit Issuer.  No Revolver Lender’s obligation to fund any
participation in a Letter of Credit shall be affected by any other Revolver
Lender’s failure to fund its participation in any Letter of Credit.


 


(c)           With respect to any Unreimbursed
Amount that is not fully refinanced by Base Rate Loans because the conditions
set forth in Section
5.2 cannot be satisfied or for any other reason, the
Borrowers shall be deemed to have incurred from the Letter of Credit Issuer a
Letter of Credit Borrowing in the amount of the Unreimbursed Amount that is not
so refinanced, which Letter of Credit Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Alternate Base
Rate plus the Applicable Margin for Base Rate Loans plus 2% per annum.  In such event, each Revolver Lender’s payment
to the Administrative Agent for the account of the Letter of Credit Issuer
pursuant to Section
2.5.2(b) shall be deemed payment in respect of its
participation in such Letter of Credit Borrowing and shall constitute a
Revolving Loan from such Revolver Lender in satisfaction of its participation
obligation under Section
2.1.4 payable on demand.


 


(d)           Until each Revolver Lender funds its
Revolving Loan pursuant to this Section 2.5.2 to reimburse the Letter
of Credit Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Revolver Lender’s Revolver Percentage of such amount shall be
solely for the account of the Letter of Credit Issuer.


 


(e)           Each Revolver Lender’s obligation to
make Revolving Loans to reimburse the Letter of Credit Issuer for amounts drawn
under Letters of Credit, as contemplated by this Section 2.5.2, shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Revolver
Lender may have against the Letter of Credit Issuer, the Borrowers or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a
Default or Event of Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing. 
Any such reimbursement shall not relieve or otherwise impair the joint
and several obligation of the Borrowers to reimburse the Letter of Credit
Issuer for the amount of any payment made by the Letter of Credit Issuer under
any Letter of Credit, together with interest as provided herein.


 


(f)            If any Revolver Lender fails to make
available to the Administrative Agent for the account of the Letter of Credit
Issuer any amount required to be paid by such Revolver Lender pursuant to the
foregoing provisions of this Section 2.5.2 by the time specified in
Section 2.5.2(b)
whether or not the requirements of Section 5.2 shall have been satisfied,
the Letter of Credit Issuer shall be entitled to recover from such Revolver
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the Letter of Credit
Issuer at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin for Base Rate Loans.  A
certificate of the Letter of Credit Issuer submitted to any Revolver Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (f)
shall be conclusive absent manifest error.


 


35





















 


(g)           At any time after the Letter of
Credit Issuer has made a payment under any Letter of Credit and has received
from any Revolver Lender such Revolver Lender’s Revolving Loan in respect of
such payment in accordance with Section 2.5.2, if the Administrative
Agent receives for the account of the Letter of Credit Issuer any payment
related to such Letter of Credit (whether directly from any of the Borrowers or
otherwise, including proceeds of cash collateral posted to secure the Letters
of Credit applied thereto by the Administrative Agent), or any payment of
interest thereon, the Administrative Agent will distribute to such Revolver
Lender its Revolver Percentage thereof in the same funds as those received by
the Administrative Agent.


 


(h)           If any payment received by the
Administrative Agent for the account of the Letter of Credit Issuer pursuant to
Section 2.5.2(a)
is required to be returned, each Revolver Lender shall pay to the
Administrative Agent for the account of the Letter of Credit Issuer its
Revolver Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Revolver Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect.


 


SECTION 2.5.3.  
Obligations Absolute. 
The obligation of the Borrowers to reimburse the Letter of Credit Issuer
for each drawing under each Letter of Credit, and to repay each Letter of
Credit Borrowing and each drawing under a Letter of Credit that is refinanced
by a Borrowing of Revolving Loans, shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:


 


(i)            any lack of validity or
enforceability of such Letter of Credit, this Agreement, or any other agreement
or instrument relating thereto;


 


(ii)           the existence of any claim,
counterclaim, set-off, defense or other right that any Borrower may have at any
time against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
Letter of Credit Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;


 


(iii)          any draft, demand, certificate or
other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;


 


(iv)          any payment by the Letter of Credit
Issuer under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the Letter of Credit Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,


 


36





















 


liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under the Bankruptcy
Code of the United States of America, or under any other liquidation,
conservatorship, bankruptcy, receivership, assignment for the benefit of creditors,
rearrangement, moratorium, insolvency, reorganization, or similar debtor relief
laws of the United States of America or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally; or


 


(v)           any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Borrower.


 


SECTION 2.5.4.  
Role of Letter of Credit
Issuer.  Each Revolver Lender and each Borrower agree
that, in paying any drawing under a Letter of Credit, the Letter of Credit
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.  Neither the Administrative Agent
nor the Letter of Credit Issuer nor any of the respective correspondents,
participants or assignees of the Letter of Credit Issuer shall be liable to any
Revolver Lender for (i) any action taken or omitted in connection herewith at
the request or with the approval of the Revolver Lenders or the Majority
Lenders, as applicable; (ii) any action taken or omitted in the absence of
gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Confirmation.  The Borrowers hereby assume all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided,
however,
that this assumption is not intended to, and shall not, preclude the Borrowers’
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
Neither the Administrative Agent, the Letter of Credit Issuer nor any of
their respective Affiliates, nor any of the respective correspondents,
participants or assignees of the Letter of Credit Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of Section 2.5.3;
provided,
however,
that anything in such clauses to the contrary notwithstanding, the Borrowers
may have a claim against the Letter of Credit Issuer, and the Letter of Credit
Issuer may be liable to a Borrower, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by such
Borrower which such Borrower proves were caused by the Letter of Credit Issuer’s
willful misconduct or gross negligence or the Letter of Credit Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. 
In furtherance and not in limitation of the foregoing, the Letter of
Credit Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and the Letter of Credit Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.


 


37





















 


SECTION 2.5.5.  
Cash Collateral. 
Upon the request of the Administrative Agent or the Letter of Credit
Issuer or the Majority Lenders if, as of the Letter of Credit Commitment
Termination Date, any Letter of Credit may for any reason remain outstanding
and partially or wholly undrawn, the Borrowers shall immediately pledge and
deposit with or deliver to the Collateral Agent, for the benefit of the Letter
of Credit Issuer and the Revolver Lenders, as collateral for the aggregate
undrawn face amount of all outstanding Letters of Credit, cash or deposit
account balances pursuant to documentation in form and substance reasonably
satisfactory to the Collateral Agent and the Letter of Credit Issuer (which
documents are hereby consented to by the Lenders), in an amount equal to such
aggregate undrawn amount.  The Borrowers
hereby grant the Collateral Agent, for the benefit of the Letter of Credit
Issuer and the Lenders, a Lien on all such cash and deposit account balances.  Cash collateral shall be maintained in blocked,
deposit accounts at the Collateral Agent or other institutions satisfactory to
it.


 


SECTION 2.5.6.  
Applicability of ISP98
and UCP.  Unless otherwise expressly agreed by the
Letter of Credit Issuer and the Borrowers when a Letter of Credit is issued, (i)
the rules of the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance
(including the ICC decision published by the Commission on Banking Technique and
Practice on April 6, 1998 regarding the European single currency (euro)) shall
apply to each Letter of Credit.


 


SECTION 2.5.7.  
Conflict with Letter of
Credit Confirmation.  In the event
of any conflict between the terms hereof and the terms of any Letter of Credit
Confirmation, the terms hereof shall control.


 


SECTION 2.6.  
Notes. 
If requested by the relevant Revolver Lender, each Revolver Lender’s
Revolving Loans under the Revolving Commitment shall be evidenced by Revolving
Notes executed by each Borrower, each such Note being payable to the order of
such Revolver Lender in a maximum principal amount equal to such Revolver
Lender’s Revolver Percentage of the original applicable Revolving Commitment
Amount.  If requested by the relevant
Term Lender, each Term Lender’s Term Loans under the Term Commitment shall be
evidenced by Term Notes executed by each Borrower, each such Term Note being
payable to the order of such Term Lender in a maximum principal amount equal to
such Term Lender’s Term Percentage of the original applicable Term Loan
Amount.  Whether or not a Loan is
evidenced by a Note, the Borrowers hereby irrevocably designate the
Administrative Agent to serve as their agent, solely for the purposes of this
section, to maintain a register (the “Register”) on which the Administrative
Agent will record the name and address of each Lender, and the Commitments and
Loans and each repayment in respect of the principal amount of the Loans of
each Lender from time to time.  No
payment with respect to the outstanding principal and interest applicable for
each of the Loans shall be made to any Person other than the Person identified
in such Register as the Lender with respect to such Loan.  Failure to make any such recordation or any
errors in such recordation shall not limit or otherwise affect the Borrowers’
obligations in respect of such Loans or otherwise limit or affect any
Obligations of any of the Borrowers.  The
entries


 


38





















 


in the Register shall be conclusive and binding on the Borrowers absent
manifest error.  The Borrowers hereby
irrevocably authorize each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender’s Notes (or on any continuation
of such grid) or on such Lender’s records, which notations, if made, shall
evidence, inter
alia,
the date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby.  Such notations shall be conclusive and
binding on the Borrowers absent manifest error; provided, however, that the failure of any
Lender to make any such notations shall not limit or otherwise affect any
Obligations of any of the Borrowers.


 


ARTICLE III


 


REPAYMENTS, PREPAYMENTS, INTEREST
AND FEES


 


SECTION 3.1.  
Repayments and
Prepayments.  The Borrowers shall repay in full the unpaid
principal amount of each Loan upon the Stated Maturity Date therefor.  Prior thereto, the Borrowers


 


(a)           may, from time to time on any
Business Day, make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Loans; provided, however, that


 


(i)            any such prepayment shall be made pro  rata
among Loans of the same type and, if applicable, having the same Interest
Period of all Lenders;


 


(ii)           no such prepayment of any LIBO Rate
Loan may be made on any day other than the last day of the Interest Period for
such Loan;


 


(iii)          all such voluntary prepayments shall
require at least one Business Day notice in the case of Base Rate Loans and
three Business Days notice in the case of LIBO Rate Loans but in either case no
more than five Business Days’ prior written notice to the Administrative Agent;
and


 


(iv)          all such voluntary partial prepayments
shall be in an aggregate minimum amount of $300,000 and an integral multiple of
$100,000;


 


(b)           shall, on each date when any
reduction in the Revolving Commitment Amount shall become effective, including
pursuant to Section
2.2, first make a mandatory prepayment of all Revolving Loans
and any Unreimbursed Amounts and then cash collateralize any other Letter of
Credit Obligations in an aggregate amount equal to the excess, if any, of the
aggregate, outstanding principal amount of all Revolving Loans and Letter of
Credit Obligations over the Revolving Commitment Amount as so reduced; and


 


(c)           shall, on each Quarterly Payment Date
set forth below, make a scheduled repayment of the aggregate outstanding
principal amount, if any, of all Term Loans in the amount shown below opposite
such Quarterly Payment Date:


 


39





















 




	
  Date

  	
   

  	
  Amount

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  52,062,500

  	
   

  
	
  April 30, 2010

  	
   

  	
  $

  	
  52,062,500

  	
   

  






 


provided, however, that if the aggregate of all
Borrowings constituting Delayed Draw Term Loans is in an amount less than
$30,000,000, then the amount of the scheduled repayments to be made, commencing
with the payment scheduled on June 30, 2008, shall be deemed reduced pro rata
by an aggregate amount equal to the difference of $30,000,000 minus the
aggregate of all Borrowings constituting Delayed Draw Term Loans;


 


(d)           shall, concurrently with the receipt
of proceeds from any Disposition but excluding, as long as no Event of Default
shall have occurred and be continuing, Net Proceeds from any Disposition or
series of Dispositions the proceeds of which are used within 90 days of the
earlier of the receipt of the relevant Net Proceeds or the consummation of each
such Disposition to replace the assets or property that were the subject of the
Disposition, using the Credit Facility Pro Rata Share of any such Net Proceeds,
first make a mandatory prepayment of the Term Loans until the Term Loans are
paid in full, and then permanently reduce the Revolving Commitment by the
amount of any excess of such Credit Facility Pro Rata Share of such Net
Proceeds not needed to prepay the Term Loans in full and use such excess to
first prepay the Revolving Loans


 


40





















 


then outstanding and then cash collateralize the
Letters of Credit then outstanding; provided  that notwithstanding the foregoing, if
an Event of Default shall have occurred and be continuing at a time when a
payment is due under this Section 3.1(d), then the Revolving
Commitment shall be deemed automatically reduced by an amount equal to the
product of the amount of prepayment required under this clause (d)
times
a fraction in the numerator of which is the then Revolving Commitment and the
denominator of which is aggregate Credit Exposure of all of the Lenders and the
Borrowers shall prior to making the prepayment described in the foregoing
provisions of this clause
(d), pay the amount, if any, required to be paid pursuant to clause (b)
of this Section 3.1
as a result of such reduction; and provided  further that no such prepayment shall
be required pursuant to this clause (d) unless the aggregate amount
of such Net Proceeds received by the Borrowers and their Subsidiaries with
respect to all Dispositions occurring since the Closing Date and not previously
applied to prepayment of the Loans and Unreimbursed Amounts and cash
collateralization of the Letters of Credit is at least $1,000,000;


 


(e)           shall, upon receipt of insurance
proceeds received in connection with a Loss Event and all other insurance
proceeds that are not applied or permitted to be applied to pay the cost of
restoration or repair in accordance with Section 3(h) of the Cash Collateral
Control Agreement, using the Credit Facility Pro Rata Share of any such proceeds,
first make mandatory prepayment of the Term Loans until the
Term Loans are paid in full and then permanently reduce the Revolving
Commitment by the amount of any excess of such Credit Facility Pro Rata share
of such proceeds not needed to prepay such Term Loans in full and use such
excess to first prepay the Revolving Loans then outstanding and then cash
collateralize the Letters of Credit then outstanding;


 


(f)            shall, upon receipt of proceeds
received in connection with the incurrence of any Indebtedness not otherwise
permitted in accordance with Section 7.2.2, using the Credit
Facility Pro Rata Share of any such Net Proceeds, first make mandatory prepayment of the
Term Loans in an aggregate amount equal to the Credit Facility Pro Rata Share
of 100% of all such proceeds until the Term Loans are paid in full and then
permanently reduce the Revolving Commitment by the amount of any excess of such
Credit Facility Pro Rata share of such proceeds not needed to prepay such Term
Loans in full and use such excess to first prepay the Revolving Loans then
outstanding, and then cash collateralize the Letters of Credit then
outstanding; and


 


(g)           shall, immediately upon any
acceleration of the Stated Maturity Date of any Loans pursuant to Section 8.2
or Section 8.3,
repay all Loans, all Unreimbursed Amounts and cash collateralize all Letters of
Credit, unless, pursuant to Section 8.3, only a portion of all
Loans and Letter of Credit Obligations is so accelerated, in which case only
the amount accelerated shall be so prepaid or cash collateralized, as the case
may be.


 


Each voluntary prepayment of Term Loans made pursuant to clause (a)
shall be applied, (i) to the extent of such prepayment, pro rata to and in
accordance with the remaining scheduled repayments of Term Loans set forth in clause (c),
and (ii) first to Base Rate Loans and second to LIBO Rate Loans.  Each mandatory prepayment of Term Loans made
pursuant to clause
(d), clause
(e), clause
(f) or clause (g) shall be applied pro rata
to the prepayment of the scheduled


 


41





















 


repayments of the Term Loans set forth in clause (c).  Each prepayment of any Loans made pursuant to
this Section shall be without premium or penalty, except as may be required by Section 4.4.  No voluntary prepayment of principal of any
Revolving Loans shall cause a reduction in the Revolving Commitment Amount.


 


SECTION 3.2.   Interest Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.


 


SECTION 3.2.1.   Rates. 
Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, the Borrowers may elect that Loans comprising a
Borrowing accrue interest at a rate per annum:


 


(a)           on that portion maintained from time
to time as a Base Rate Loan, equal to the sum of the Alternate Base Rate from
time to time in effect plus the Applicable Margin; and


 


(b)           on that portion maintained as a LIBO
Rate Loan, during each Interest Period applicable thereto, equal to the sum of
the LIBO Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin.


 


The “LIBO Rate (Reserve Adjusted)” means,
relative to any Loan to be made, continued or maintained as, or converted into,
a LIBO Rate Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined pursuant to the following
formula:


 




	
   

  	
  LIBO Rate

  	
  =

  	
  LIBO Rate

  	
   

  
	
   

  	
  (Reserve Adjusted)

  	
  1.00 - LIBOR Reserve
  Percentage

  	
   

  






 


The LIBO Rate (Reserve Adjusted) for any Interest
Period for LIBO Rate Loans will be determined by the Administrative Agent on
the basis of the LIBOR Reserve Percentage in effect on, and the applicable
rates furnished to and received by the Administrative Agent from CIBC, two
Business Days before the first day of such Interest Period.


 


“LIBO Rate” means, relative to any
Interest Period for LIBO Rate Loans, the rate of interest equal to (a) the rate
per annum appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days before the first day of the relevant Interest
Period for a term comparable to such Interest Period; (b) if for any reason
such foregoing rate is not available, the rate per annum appearing on Reuters
Screen LIBO page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two Business Days before the first
day of such Interest Period for a term comparable to such Interest Period; provided
that if more than one rate is specified on Reuters Screen LIBO page, the
applicable rate shall be the arithmetic mean of all such rates; and (c) if
neither the Telerate Page 3750 nor the Reuters Screen LIBO page rate is
available, the interest rate per annum equal to the rate per annum at which
deposits in Dollars are offered by the principal office of the Administrative
Agent in London, England to prime banks in the London interbank market at 11:00
a.m. (London time)


 


42





















 


two Business Days before the first day of such Interest Period in an
amount substantially equal to the amount of the Loan of the Administrative
Agent comprising part of such Loan and for a period equal to such Interest
Period.


 


“LIBOR Reserve Percentage” means,
relative to any Interest Period for LIBO Rate Loans, the reserve percentage
(expressed as a decimal) equal to the maximum aggregate reserve requirements
(including all basic, emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled changes in
reserve requirements) specified under regulations issued from time to time by
the F.R.S. Board and then applicable to assets or liabilities consisting of and
including “Eurocurrency Liabilities”, as currently defined in Regulation D of
the F.R.S. Board, having a term approximately equal or comparable to such
Interest Period.


 


All LIBO Rate Loans shall bear interest from and
including the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such LIBO Rate Loan.


 


SECTION 3.2.2.   Default Rates of Interest.  Upon the occurrence and continuance of any
Event of Default, the Borrowers shall pay, but only to the extent permitted by
law, interest (after as well as before judgment) on the Loans and all
Unreimbursed Amounts and on any other monetary Obligations of the Borrowers at
a rate per annum equal to the Alternate Base Rate plus a margin of 2% over the
Applicable Margin for Base Rate Loans; provided that in the case of any LIBO
Rate Loan outstanding upon the occurrence and during the continuance of an
Event of Default, such LIBO Rate Loan shall bear interest at a rate equal to the
LIBO Rate then in effect plus the Applicable Margin plus 2% per annum until the
last day of the then current Interest Period.


 


SECTION 3.2.3.   Payment Dates.  Interest accrued on each Loan shall be
payable, without duplication:


 


(a)           on the Stated Maturity Date therefor;


 


(b)           with respect to LIBO Rate Loans on
the date of any payment or prepayment, in whole or in part, of principal
outstanding on such Loan;


 


(c)           with respect to Base Rate Loans, on
each Quarterly Payment Date occurring after the date hereof;


 


(d)           with respect to LIBO Rate Loans, the
last day of each applicable Interest Period (and, if such Interest Period shall
exceed 3 months, on the three month anniversary of the commencement of such
Interest Period);


 


(e)           with respect to any Base Rate Loans
converted into LIBO Rate Loans on a day when interest would not otherwise have
been payable pursuant to clause (c), on the date of such
conversion; and


 


43





















 


(f)            on that portion of any Loans the
Stated Maturity Date of which is accelerated pursuant to Section 8.2
or Section 8.3,
immediately upon such acceleration.


 


Interest accrued on Loans or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.


 


SECTION 3.3.   Fees. 
The Borrowers hereby agree to pay the fees set forth in this Section 3.3.  All such fees shall be non-refundable.


 


SECTION 3.3.1.   Revolving Commitment Fee.  The Borrowers hereby agree to pay to the
Administrative Agent for the account of each Revolver Lender, for the period
(including any portion thereof when any of its Revolving Commitments are
suspended by reason of such Borrowers’ inability to satisfy any condition of Article V)
commencing on the date hereof and continuing through the final Commitment
Termination Date, a commitment fee at the Commitment Fee Rate on such Revolver
Lender’s Revolver Percentage of the sum of the average daily unused portion of
the Revolving Commitment Amount.  Such
commitment fees shall be payable by the Borrowers in arrears on each Quarterly
Payment Date, commencing with the first such day following the date hereof, and
on each Commitment Termination Date.


 


SECTION 3.3.2.   Letter of Credit Standby Fee Payable to Revolver Lenders.  The Borrowers agree to pay a fee to the
Administrative Agent for the account of the Revolver Lenders (including the
Letter of Credit Issuer), to be distributed ratably (in accordance with their
respective Percentages), for each Letter of Credit for the period from and
including the date of the issuance of such Letter of Credit to (and including)
the date upon which such Letter of Credit expires or terminates in accordance
with its terms, at a per
annum
rate equal to the Letter of Credit Fee Rate times the average daily undrawn face
amount of such Letter of Credit.  Such
fee shall be payable on each Quarterly Payment Date, with the first such
payment to be made on the first Quarterly Payment Date following the issuance
of such Letter of Credit, and on the Letter of Credit Commitment Termination
Date.


 


SECTION 3.3.3.   Letter of Credit Fronting Fee Payable to the Letter of
Credit Issuer.  The
Borrowers hereby agree to pay to the Letter of Credit Issuer for its own
account a fronting fee for each Letter of Credit at a per  annum
rate equal to one-fourth of one percent (1/4 of 1%) of the average
daily undrawn face amount of such Letter of Credit.  Such fee shall be payable on each Quarterly
Payment Date, with the first such payment to be made on the first Quarterly
Payment Date following the issuance of such Letter of Credit, and on the Letter
of Credit Commitment Termination Date. 
In addition, the Borrowers shall pay directly to the Letter of Credit
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the Letter of
Credit Issuer relating to letters of credit as from time to time in
effect.  Such fees and charges are due
and payable on demand and are nonrefundable.


 


SECTION 3.3.4.   Arranger’s and Administrative Agent’s Fee.  To the Administrative Agent and the Arranger
for their own account, the fees in the amounts and on the dates specified in
the letter agreement dated October 29, 2004, among the Arranger and MLP, as


 


44





















 


amended, supplemented, restated or otherwise modified from time to time
(the “Administrative
Agent’s Fee Letter and Arranger’s Fee Letter”).


 


SECTION 3.3.5.   Collateral Agent’s Fee.  To the Collateral Agent for its own account,
the fees in the amounts and on the dates specified in the letter agreement of
even date herewith, among the Borrowers and the Collateral Agent, as amended,
supplemented, restated or otherwise modified from time to time (the “Collateral Agent’s Fee
Letter”).


 


SECTION 3.3.6.   Delayed Draw Term Loan Commitment Fee.  The Borrowers hereby agree to pay to the
Administrative Agent for the account of each Term Loan Lender, for the period
(including any portion thereof when any of its Term Loan Commitments are
suspended by reason of such Borrowers’ inability to satisfy any condition of Article V)
commencing on the date hereof and continuing through the final Delayed Draw
Commitment Termination Date, a commitment fee at the Commitment Fee Rate on
such Term Loan Lender’s Term Loan Percentage of the sum of the average daily
unused portion of the Delayed Draw Term Loan Commitment Amount.  Such commitment fees shall be payable by the
Borrowers in arrears on each Quarterly Payment Date, commencing with the first
such day following the date hereof, and on the Delayed Draw Term Loan
Commitment Termination Date.


 


ARTICLE IV


 


CERTAIN LIBO RATE AND OTHER
PROVISIONS


 


SECTION 4.1.   Fixed Rate Lending Unlawful.  If any Lender shall determine (which
determination shall, upon notice thereof to the Borrowers and the Lenders, be
conclusive and binding on the Borrowers) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any central bank
or other Governmental Authority asserts that it is unlawful, for such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO
Rate Loan of a certain type, the obligations of all Lenders to make, continue,
maintain or convert any such Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all LIBO Rate Loans
of such type shall automatically convert into Base Rate Loans at the end of the
then current Interest Periods with respect thereto or sooner, if required by
such law or assertion.


 


SECTION 4.2.   Deposits Unavailable.  If the Administrative Agent shall have
determined that by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans, then, upon notice from the Administrative Agent
to the Borrowers and the Lenders, the obligations of all Lenders under Section 2.3
and Section 2.4
to make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.


 


SECTION 4.3.   Increased LIBO Rate Loan Costs, etc.  Each of the Borrowers agrees to reimburse
each Lender for any increase in the cost to such Lender of, or any reduction in
the amount of any sum receivable by such Lender in respect of, making,
continuing or maintaining


 


45





















 


(or of its obligation to make, continue or maintain) any Loans as, or
of converting (or of its obligation to convert) any Loans into, LIBO Rate
Loans.  Such Lender shall promptly notify
the Administrative Agent and the Borrowers in writing of the occurrence of any
such event, such notice to state, in reasonable detail, the reasons therefor
and the additional amount required fully to compensate such Lender for such
increased cost or reduced amount.  Such
additional amounts shall be payable by the Borrowers directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrowers.


 


SECTION 4.4.   Funding Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of


 


(a)           any conversion or repayment or prepayment
of the principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether pursuant
to Section 3.1
or as a result of the payment on the Closing Date of outstanding Loans under the
Existing Credit Facility or otherwise;


 


(b)           any Loans not being made as LIBO Rate
Loans in accordance with the Borrowing Request therefor;


 


(c)           any Loans not being continued as, or
converted into, LIBO Rate Loans in accordance with the Continuation/ Conversion
Notice therefor; or


 


(d)           as a result of a reallocation of the
Percentages as a result of a change of a Lender’s Commitment as a result of a
Delayed Draw Term Loan, a Greenshoe Increase or otherwise,


 


then, upon the written notice of such Lender to the Borrowers (with a
copy to the Administrative Agent), the Borrowers shall, within five days of
their receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense.  Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrowers.


 


SECTION 4.5.   Increased Capital Costs.  If any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other governmental
authority affects or would affect the amount of capital required or expected to
be maintained by any Lender or Letter of Credit Issuer or any Person
controlling such Lender or Letter of Credit Issuer, and such Lender or Letter
of Credit Issuer determines (in its sole and absolute discretion) that the rate
of return on its or such controlling Person’s capital as a consequence of its
Commitments, its issuance or maintenance of a Letter of Credit or its
participation in a Letter of Credit, or the Loans made by such Lender or Letter
of Credit Issuer is reduced to a level below that which such Lender or Letter
of Credit Issuer or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such


 


46





















 


case upon notice from time to time by such Lender or Letter of Credit
Issuer to the Borrowers, the Borrowers shall immediately pay directly to such
Lender or Letter of Credit Issuer additional amounts sufficient to compensate
such Lender, such Letter of Credit Issuer or such controlling Person for such
reduction in rate of return.  A statement
of such Lender or Letter of Credit Issuer as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on the Borrowers.  In determining such amount, such Lender or
Letter of Credit Issuer may use any method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable.


 


SECTION 4.6.   Taxes. 
(a) All payments by the Borrowers of principal of, and interest on, the
Loans and all other amounts payable hereunder shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority (except as permitted by clause (d)
of this Section 4.6),
but excluding franchise taxes and taxes imposed on or measured by any Lender’s
net income or receipts (such non-excluded items being called “Taxes”).  In the event that any withholding or
deduction from any payment to be made by the Borrowers hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrowers will


 


(i)            pay directly to the relevant
authority the full amount required to be so withheld or deducted;


 


(ii)           promptly forward to the
Administrative Agent an official receipt or other documentation satisfactory to
the Administrative Agent evidencing such payment to such authority; and


 


(iii)          pay to the Administrative Agent for
the account of the Lenders such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Lender will equal the full
amount such Lender would have received had no such withholding or deduction
been required.


 


Moreover, if any Taxes are directly asserted against the Administrative
Agent or any Lender with respect to any payment received by the Administrative
Agent or such Lender hereunder, the Administrative Agent or such Lender may pay
such Taxes and the Borrowers will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such Person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
person would have received had not such Taxes been asserted.


 


(b)           If the Borrowers fail to pay any
Taxes when due to the appropriate taxing authority or fail to remit to the
Administrative Agent, for the account of the respective Lenders, the required
receipts or other required documentary evidence, the Borrowers shall indemnify
the Administrative Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such
failure.  For purposes of this Section 4.6,
a distribution hereunder by the Administrative Agent or any Lender to or for
the account of any Lender shall be deemed a payment by the Borrowers.


 


47





















 


(c)           Each Lender that is organized under
the laws of a jurisdiction other than the United States (a “Non-U.S. Lender”)
shall so notify the Borrowers and shall also promptly notify the Borrowers of
any change in its LIBO Office and shall in each case, prior to the due date of
any payments hereunder, execute and deliver to each of the Borrowers and the
Administrative Agent, on or about the first scheduled payment date in each
Fiscal Year, one or more (as such Borrowers or the Administrative Agent may
reasonably request) United States Internal Revenue Service Forms W-8ECI and
W-8BEN (or any successor form or documents), appropriately completed, as may be
applicable, establishing that a payment to such Lender is fully exempt from
withholding or deduction of Taxes, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”, a
statement substantially in the form of Exhibit P and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-US Lender claiming complete exemption from U.S. federal
withholding tax on all payments by the Borrowers under this Agreement and the
Notes.


 


(d)           The Borrowers shall not be required
to pay any additional amounts to any Lender in respect of the United States
withholding tax pursuant to this Section 4.6 if the obligation to pay such
additional amounts would not have arisen but for a failure by such Lender to
comply with the provisions of clause (c) above for any reason,
other than a change in treaty, law or regulation after the date hereof (or, in
the case of an Assignee Lender, after the date of assignment or transfer) which
prevents such Lender from qualifying for a total exemption from United States
withholding; provided,
that if a Lender (i) is unable to provide the Borrowers a form otherwise
required to be delivered pursuant to clause (c) above or (ii) makes any
payment or becomes liable to make any payment on account of any Taxes with
respect to payments by the Borrowers hereunder, the Borrowers may, at their
option, as long as no Event of Default exists, either (A) replace such Lender
with another financial institution reasonably acceptable to the Administrative
Agent and, if applicable, the Letter of Credit Issuer, to be sought, nominated
and designated by the Borrowers pursuant to a Lender Assignment Agreement
entered into by such financial institution and the relevant affected Lender in
accordance with Section
10.11.1 or (B) continue to make payments to such Lender under
the terms of this Agreement and the applicable Note, which payments shall be
made in accordance with clause (a) above.  If the Borrowers exercise their option under
subparagraph (B) of this clause (d) the relevant Lender agrees
to comply with clause
(e) of this Section.


 


(e)           Any Lender claiming any additional
amounts payable pursuant to this Section 4.6 shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to file any certificate or document requested by the Borrowers or
to change the jurisdiction of its LIBO Office or Domestic Office, as
applicable, if the making of such a filing or change would avoid the need for
or reduce the amount of any such additional amounts which may thereafter accrue
and so long as such efforts or changes would not, in the sole discretion of
such Lender, be otherwise disadvantageous to such Lender.


 


48





















 


SECTION 4.7.   Payments, Computations, etc.  Unless otherwise expressly provided, all
payments by the Borrowers pursuant to this Agreement, the Notes or any other
Loan Document shall be made by the Borrowers to the Administrative Agent for
the pro
rata
account of the Lenders entitled to receive such payment.  All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 1:00 p.m., New York time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Borrowers.  Funds received after that time shall be
deemed to have been received by the Administrative Agent on the next succeeding
Business Day.  The Administrative Agent
shall promptly remit in same day funds to each Lender its share, if any, of
such payments received by the Administrative Agent for the account of such
Lender.  All interest and fees shall be
computed on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such interest or
fee is payable over a year comprised of 360 days (or, in the case of interest
on a Base Rate Loan, 365 days or, if appropriate, 366 days).  Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (c) of the definition of the term
“Interest Period”
with respect to LIBO Rate Loans) be made on the next succeeding Business Day
and such extension of time shall be included in computing interest and fees, if
any, in connection with such payment.


 


SECTION 4.8.   Sharing of Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections 4.3,
4.4
and 4.5)
in excess of its pro
rata
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided, however, that if all or any portion of
the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each Lender which has
sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender’s ratable share (according to the
proportion of


 


(a)           the amount of such selling Lender’s
required repayment to the purchasing Lender


 


to


 


(b)           the total amount so recovered from
the purchasing Lender)


 


of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.  Each of the Borrowers agree that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section
4.9) with respect to such participation as fully as if such
Lender were the direct creditor of such Borrowers in the amount of such
participation.  If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with


 


49





















 


the rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim.


 


SECTION 4.9.   Setoff.  Each Lender shall, upon the occurrence of any
Default described in clauses
(a) through (d) of Section 8.1.9 with respect to any Loan
Party or any other Event of Default, have the right to appropriate and apply to
the payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) each Borrower hereby grants to each Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Borrower then or thereafter maintained with such
Lender; provided,
however,
that any such appropriation and application shall be subject to the provisions
of Section 4.8.  Each Lender agrees promptly to notify each of
the Borrowers and the Administrative Agent after any such setoff and
application made by such Lender; provided, however, that the failure to give such
notice shall not affect the validity of such setoff and application.  The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff
under applicable law or otherwise) which such Lender may have.


 


SECTION 4.10.   Use of Proceeds.  The Borrowers shall apply the proceeds of
each Borrowing (i) which is a Revolving Loan or a Letter of Credit for general
corporate purposes, including working capital, permitted acquisitions,
permitted Capital Expenditures, permitted Investments and provided no Default
or Event of Default has occurred and is continuing, or would result therefrom,
to make minimum quarterly Distributions on the common units in MLP, (ii) which
is an Initial Draw Term Loan for the refinancing of Existing Indebtedness or
(iii) which is a Delayed Draw Term Loan for the financing of a portion of
the construction costs of the ATB pursuant to the ATB Construction Contract in
an amount not to exceed $45,600,000. 
Without limiting the foregoing, no proceeds of any Credit Extension will
be used to acquire any equity security of a class which is registered pursuant
to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as
defined in F.R.S. Board Regulation U.


 


ARTICLE V


 


CONDITIONS TO BORROWING


 


SECTION 5.1.   Initial Borrowing.  The obligations of the Lenders to fund the
initial Borrowing and make the Initial Draw Term Loans shall be subject to the
prior or concurrent satisfaction of each of the conditions precedent set forth
in this Section 5.1.


 


SECTION 5.1.1.   Resolutions, etc.  The Administrative Agent shall have received
from each of the Borrowers a certificate, dated the date of the initial
Borrowing, of their respective Secretary or Assistant Secretary, or of the
respective Secretary or Assistant Secretary of their general partner if such
Loan Party is a limited partnership, as to


 


(a)           resolutions of their respective board
of directors, board of managers, general partner, managing member (or
equivalent body) then in full force and effect authorizing the execution,
delivery and performance of this Agreement, the Notes and each other
Transaction Document to be executed by such Loan Party;


 


50





















 


(b)           the incumbency and signatures of
those of their respective officers authorized to act with respect to each
Transaction Document executed by it; and


 


(c)           evidence that each such Borrower and
such Loan Party is (i) duly organized or formed, and (ii) validly existing, in
good standing and qualified to transact business under the laws of the
jurisdiction of its respective organization and under the laws of each
jurisdiction where the failure to be so qualified or in good standing could
reasonably be expected to have a Material Adverse Effect,


 


upon which certificate each Lender may conclusively rely until it shall
have received a further certificate of the Secretary of each Loan Party (or of
the Secretary of the Loan Party’s general partner if such Loan Party is a
limited partnership) canceling or amending such prior certificate.


 


SECTION 5.1.2.   Delivery of Notes.  To the extent required by a Lender, the
Administrative Agent shall have received, for the account of such Lender, a
Note payable to the order of such Lender duly executed and delivered by the
Borrowers.


 


SECTION 5.1.3.  
Third Party Consents
Related to Charters.  The
Administrative Agent shall have received, within seventy-five (75) days
following the Closing Date, (a) consents and agreements in substantially the
same form of Exhibit
K-2 hereto duly executed and delivered by each charterer
under each Existing Charter in effect on the Closing Date from whom the
Administrative Agent did not receive a similar consent pursuant to the Existing
Credit Facility and (b) an acknowledgment of consent and agreement in
substantially the form of Exhibit K-3 hereto executed and
delivered by each charterer under each of the Existing Charters identified in
clauses (v) through (viii) in the definition of Existing Charters.  


 


SECTION 5.1.4.   Support Agreement.  The Administrative Agent shall have received
a written confirmation from Hess of the continued effectiveness of the Support
Agreement duly executed by Hess and acknowledged by the Borrowers together with
a consent and agreement in substantially the form of Exhibit K-1, hereto
duly executed and delivered by Hess and the Borrowers.


 


SECTION 5.1.5.   Pledge Agreement.  The Administrative Agent shall have received
executed counterparts of the Pledge Agreements, dated as of the date hereof,
duly executed by MLP, Operating LLC, Charter LLC, USCS Chartering and Chemical
Pioneer, together with the certificates, evidencing all of the issued and outstanding
membership interest pledged in accordance with the terms of the Pledge
Agreements, which certificates shall in each case be accompanied by undated
powers duly executed in blank, or, if any securities pledged pursuant to a
Pledge Agreement are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Administrative Agent for the benefit of the Secured Parties in accordance with
Section 9-106 of the Uniform Commercial Code, as in effect in the State of New
York.


 


SECTION 5.1.6.   Cash Collateral Control Agreement; Security Agreements.  The Administrative Agent shall have received
executed counterparts of the Cash Collateral Control Agreement and in


 


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the case of New Borrowers other than ATB LLC, Security Agreements, and
in the case of ATB LLC and each Existing Borrower which is a Borrower under
this Agreement, Amendments to Security Agreements, each dated as of the date
hereof and duly executed by each relevant Borrower, together with


 


(a)           acknowledgment copies of properly
filed Uniform Commercial Code financing statements (Form UCC-1 in the case of
New Borrowers other than ATB LLC), dated a date reasonably near to the date of
the initial Borrowing, or such other evidence of filing as may be acceptable to
the Administrative Agent, naming the Borrowers as the debtors and the
Collateral Agent as the secured party, or other similar instruments or
documents, filed under the Uniform Commercial Code of all jurisdictions as may
be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the security interest of the Collateral Agent pursuant to the Security
Agreements;


 


(b)           executed copies of proper Uniform
Commercial Code Form UCC-3 termination statements, if any, necessary to
release all Liens and other rights of any Person in any collateral described in
the Security Agreements previously granted by any Person; and


 


(c)           certified copies of Uniform
Commercial Code Requests for Information or Copies (Form UCC-11), or a similar
search report certified by a party acceptable to the Administrative Agent,
dated a date reasonably near to the date of the initial Borrowing, listing all
effective financing statements which name the Borrowers (under their respective
present name and any previous names) as the debtors and which are filed in the
jurisdictions in which filings were made pursuant to clause (a) above in the case of the
Borrowers, together with copies of such financing statements (none of which
(other than those described in clause (a), if such Form UCC-11 or
search report, as the case may be, is current enough to list such financing
statements described in clause (a)) shall cover any collateral
described in the Security Agreements) unless a termination statement relating
thereto or other release of Lien acceptable to the Administrative Agent shall
have been executed and delivered to the Administrative Agent.


 


SECTION 5.1.7.   Mortgages.  The Administrative Agent shall have received
counterparts of the Mortgages from each Original Owner, Chemical Pioneer and
Charleston, dated as of the date hereof, duly executed by the relevant
Borrower, covering each Vessel described in Schedule II, together with


 


(a)           evidence of the completion (or
satisfactory arrangements for the completion) of all recordings and filings of
the Amendments to Mortgages, as may be necessary or, in the reasonable opinion
of the Administrative Agent, desirable effectively to create and maintain a
valid, perfected first priority Lien against the Vessels;


 


(b)           the Administrative Agent shall have
received the report of the Borrowers’ marine insurance broker required pursuant
to Article 1, Section 11 of the Mortgages, together with such evidence of
insurance as is required by Article 1, Section 11 of the Mortgages and such
other evidence of the maintenance of the insurance required by Article 1,
Section 11 of the Mortgages as the Administrative Agent shall reasonably
request; and


 


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(c)           such other approvals, opinions, or
documents as the Administrative Agent may reasonably request.


 


SECTION 5.1.8.  
Guaranties. 
The Administrative Agent shall have received duly executed counterparts
of the Guaranty of each of USCS Chemical Pioneer LLC and USCS Chemical
Chartering LLC, dated as of the date hereof, substantially in the form of Exhibit J hereto.


 


SECTION 5.1.9.   Opinions of Counsel.  The Administrative Agent shall have received
opinions, dated the date of the initial Borrowing and addressed to the
Administrative Agent, the Collateral Agent and all Lenders, from Fulbright
& Jaworski, LLP, counsel to the Borrowers, substantially in the form of Exhibit F-1
hereto and Holland & Knight, special counsel to the Borrowers,
substantially in the form of Exhibit F-2.


 


SECTION 5.1.10.   Closing Fees, Expenses, etc.  The Arranger and the Administrative Agent
shall have received for its own account, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to Sections 3.3
and 10.3,
if then invoiced.


 


SECTION 5.1.11.   Payment of Outstanding Indebtedness.  The Administrative Agent shall have received
a prepayment in the amount of $93,750,000 of Indebtedness outstanding under the
Existing Credit Facility.


 


SECTION 5.1.12.   Financial Condition.  Immediately following the funding of the Term
Loans on the Closing Date,


 


(i)            the Borrowers shall have for the
twelve-month period ending September 30, 2004, Consolidated Pro Forma
EBITDA of at least $53,000,000;


 


(ii)           the Total Debt Leverage Ratio of the
Borrowers on a pro forma basis after giving effect to the Credit Extensions and
the Equity Offering and the use of the proceeds thereof shall not exceed 1.90;
and


 


(iii)          no event or occurrence which could
reasonably be anticipated to have a Material Adverse Effect shall have occurred
and be continuing.


 


SECTION 5.1.13.   Solvency Certificate.  The Borrowers shall have delivered to the
Administrative Agent a solvency certificate duly executed by an Authorized
Officer of each Borrower in substantially the form of Exhibit M
hereto.


 


SECTION 5.1.14.   Ratings.  The Administrative Agent shall have received
a ratings letter from each of S&P and Moody’s ascribing a rating to the
Notes, and such rating shall not have been withdrawn.


 


SECTION 5.1.15.   Equity Offering.  The Equity Offering as described in the Final
Prospectus shall have been consummated as described in such Final Prospectus
and MLP shall have received at least $100,000,000 in gross proceeds therefrom.


 


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SECTION 5.1.16.   Financial Statements.  The Administrative Agent shall have received
unaudited financial statements for the Borrowers prepared in accordance with
GAAP for the most recent interim monthly periods.


 


SECTION 5.1.17.   Officer’s Certificate.  The Administrative Agent shall have received
a certificate duly executed by an Authorized Officer of each Borrower, dated as
of the Closing Date, (a) certifying that the conditions precedent to be
performed by such Borrower described in 5.1.12 and 5.1.19 have been satisfied in
accordance with this Agreement, and (b) showing in reasonable detail the
computations made with respect to Section 5.1.12.


 


SECTION 5.1.18.   Organic Documents.  The Administrative Agent shall have received
a duly executed copy of the Organic Documents for each New Borrower and General
Partner, and all amendments, supplements, or other modifications thereto.


 


SECTION 5.1.19.   Consummation of Transactions.  Each of the transactions contemplated by
Sections 3.1 through 3.8 of the Contribution Agreement shall have been
consummated.


 


SECTION 5.1.20.   Agreement of General Partner.  The General Partner shall have executed and
delivered to the Administrative Agent, the Collateral Agent and the Lenders a
letter dated the Closing Date substantially in the form of Exhibit R hereto.


 


SECTION 5.1.21.   Additional Documentation.  The Administrative Agent shall have received,
in form and substance satisfactory to it, such additional assurances,
certificates, documents or consents related to the foregoing as the
Administrative Agent or the Majority Lenders shall reasonably request.


 


SECTION 5.2.   All Credit Extensions.  The obligation of each Lender (including the
Letter of Credit Issuer) to make any Credit Extension (including the initial
Credit Extensions) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 5.2.


 


SECTION 5.2.1.   Compliance with Warranties, No Default, etc.  Both before and after giving effect to any
Credit Extension (but, if any Default of the nature referred to in Section 8.1.5
shall have occurred with respect to any other Indebtedness, without giving
effect to the application, directly or indirectly, of the proceeds thereof) the
following statements shall be true and correct


 


(a)           the representations and warranties
set forth in Article
VI (excluding, however, those contained in Section 6.7)
and in each Transaction Document shall be true and correct in all material
respects with the same effect as if then made (unless stated to relate solely
to an early date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date);


 


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(b)           except as disclosed by the Borrowers
to the Administrative Agent and the Lenders pursuant to Section 6.7


 


(i)            no labor controversy, litigation,
arbitration or governmental investigation (to the knowledge of any Loan Party)
or proceeding shall be pending or, (to the knowledge of any Loan Party)
threatened, against a Loan Party or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or which purports to
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Transaction Document; and


 


(ii)           no development shall have occurred in
any labor controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to Section 6.7 which could reasonably be
expected to have a Material Adverse Effect; and


 


(c)           no Default shall have then occurred
and be continuing, and none of the Borrowers, nor any other Loan Party nor any
of their respective Subsidiaries are in material violation of any law or
governmental regulation or court order or decree.


 


SECTION 5.2.2.   Borrowing Request; Letter of Credit Confirmation and
Documentation.  In the
case of a Borrowing, the Administrative Agent shall have received a Borrowing
Request for such Borrowing in compliance with Section 2.3.1.  In the case of a Credit Extension relating to
Letters of Credit, the Administrative Agent and the Letter of Credit Issuer
shall have received the Letter of Credit Confirmation and other documents and
information required to be delivered pursuant to and in compliance with Section
2.3.2.  Each of the delivery of a
Borrowing Request or a Letter of Credit Confirmation, as applicable, and the
acceptance by the Borrowers of the proceeds of such Credit Extension shall
constitute a representation and warranty by the Borrowers that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the statements
made in Section 5.2.1
are true and correct.


 


SECTION 5.2.3.   Satisfactory Legal Form.  All documents executed or submitted pursuant
hereto by or on behalf of each of the Borrowers or any of their respective
Subsidiaries or any other Material Obligors shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel; the
Administrative Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Administrative Agent or
its counsel may reasonably request.


 


ARTICLE VI


 


REPRESENTATIONS AND WARRANTIES


 


In order to induce the Lenders, the Letter of Credit
Issuer and the Administrative Agent to enter into this Agreement and to make
Credit Extensions hereunder, each of the Borrowers represents and warrants unto
the Administrative Agent, the Letter of Credit Issuer and each Lender as set
forth in this Article
VI.


 


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SECTION 6.1.   Organization, etc.  Each of the Loan Parties and each of their
respective Subsidiaries is a partnership, limited liability company or
corporation, as the case may be, validly organized and existing and in good
standing under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign partnership, limited liability
company or corporation, as the case may be, in each jurisdiction where the
nature of their respective business require such qualification, except where
the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect and have full limited liability company, partnership or
corporate, as the case may be, power and authority and hold all requisite
governmental licenses, permits and other approvals (a) to enter into and
perform their Obligations under this Agreement, the Notes and each other
Transaction Document to which they are a party and (b) to own and hold
under lease their respective property and to conduct their respective business
substantially as currently conducted by each of them, except in the case of clause (b),
where the failure to have licenses, permits and other approvals could not
reasonably be expected to have a Material Adverse Effect.  As of the Closing Date, after giving effect
to the transactions contemplated by the Contribution Agreement, the General
Partner is the sole general partner of, and owns a 2.0% general partner
interest in, the MLP.


 


SECTION 6.2.   Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by
each of the Borrowers of this Agreement, the Notes and each other Transaction
Document executed or to be executed by it, and the execution, delivery and
performance by each other Loan Party of this Agreement and each other
Transaction Document executed or to be executed by each of them are within each
Borrower’s and each such Loan Party’s limited liability company, partnership or
corporate, as applicable, powers, have been duly authorized by all necessary
company action, and do not


 


(a)           contravene any Borrower’s or any such
Loan Party’s Organic Documents;


 


(b)           contravene any contractual
restriction, law or governmental regulation or court decree or order binding on
or affecting any such Borrower or any such Loan Party; or


 


(c)           result in, or require the creation or
imposition of, any Lien on any of such Borrower’s or any other Loan Party’s
properties (except those specifically created pursuant to the Transaction
Documents).


 


SECTION 6.3.   Government Approval, Regulation, etc.  No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body or other Person is required to be made by any of the Borrowers or any
other Loan Party for the due execution, delivery or performance by any Borrower
or any other Loan Party of this Agreement, the Notes or any other Transaction
Document to which it is a party, except (a) solely with respect to the
representation under the Closing Date those filings set forth on Item 6.3
of the Disclosure Schedule which shall be made on the Closing Date and
(b) those authorizations, approvals, other actions, notices or filings the
failure of which to obtain or make could not reasonably be expected to have a
Material Adverse Effect.  None of the
Borrowers nor any of their respective Subsidiaries are an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or a “holding
company”, or a “subsidiary company” of a “holding company”, or an “affiliate”
of a “holding company” or of a “subsidiary company” of a


 


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“holding company”, within the meaning of the Public Utility Holding
Company Act of 1935, as amended.


 


SECTION 6.4.   Validity, etc.  This Agreement constitutes, and the Notes and
each other Transaction Document executed by each Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of such Borrower enforceable in accordance with their respective
terms, and each Transaction Document executed pursuant hereto by each other
Loan Party will, on the due execution and delivery thereof by such Loan Party,
constitute the legal, valid and binding obligation of such Loan Party
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally, by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law) and an implied covenant of good faith and fair dealing.


 


SECTION 6.5.   Financial Information.


 


(a)           The pro  forma consolidated balance sheet of
MLP and its consolidated Subsidiaries as of September 30, 2004, certified
by an Authorized Officer of the General Partner (the “Pro Forma Balance Sheet”)
having responsibility over financial matters, a copy of which has been provided
to the Administrative Agent and each Lender, is the unaudited consolidated
balance sheet of MLP and its consolidated Subsidiaries adjusted to give effect
(as if such events had occurred on such date) to (i) the Equity Offering,
(ii) the making of the Initial Draw Term Loans, (iii) the application
of the proceeds of the foregoing in accordance with the terms of the Loan
Documents and the Final Prospectus, dated October 28, 2004, for the Equity
Offering as filed with the United States Securities and Exchange Commission
(the “Final
Prospectus”), (iv) the other transactions to occur on
the Closing Date, and (v) the payment of all fees and expenses related to the
foregoing transactions, as estimated in good faith as of the date of the Pro
Forma Balance Sheet.  The Pro Forma
Balance Sheet, together with the notes thereto, presents fairly in all material
respects, on a pro forma basis, the consolidated financial position of MLP and
its Subsidiaries as of September 30, 2004, assuming that the events
specified in the preceding sentence had actually occurred on such date.


 


(b)           The Projections have been prepared in
good faith under the direction of an Authorized Officer of the General Partner
having responsibility for financial matters, and in accordance with GAAP based
upon good faith estimates and assumptions believed by management of the Parent
to be reasonable at the time made.  The
Borrowers have no reason to believe that as of the date of delivery thereof
such Projections are materially incorrect or misleading in any material
respect, or omit to state any material fact which would render them misleading
in any material respect, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a material
amount.


 


SECTION 6.6.   No Material Adverse Change, etc.  Since June 30, 2004, (a) except as
disclosed in Item 6.6
of the Disclosure Schedule, no event or occurrence which could reasonably


 


57





















 


be anticipated to have a Material Adverse Effect has occurred, and
(b) no event, act or condition has occurred which calls into question the
Projections.


 


SECTION 6.7.   Litigation, Labor Controversies, etc.  There is no pending or, to the knowledge of
each of the Borrowers, threatened (in writing) litigation, action,
investigation proceeding, or labor controversy against any of the Loan Parties
or any of their respective Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which could reasonably be expected to have a
Material Adverse Effect or which purports to affect the legality, validity or
enforceability of this Agreement, the Notes or any other Transaction Document,
except as disclosed in Item 6.7
(“Litigation”) of the Disclosure Schedule.


 


SECTION 6.8.   Subsidiaries; Nature of Business.  After giving effect to the consummation of
the transactions contemplated by the Contribution Agreement, no Loan Party,
other than MLP, Operating LLC, Charter LLC, USCS Chartering and Chemical Pioneer,
has any Subsidiaries, except those Subsidiaries which are identified in Item 6.8
(“Existing Subsidiaries”) of the Disclosure Schedule or, in the case of such
Loan Parties, which are permitted to be formed or acquired in accordance with
this Agreement.  None of the Loan Parties
has engaged in any business other than to enter into the Transaction Documents,
the Equity Offering, the Transactions contemplated by the Contribution
Agreement and otherwise to conduct such business as is necessary or appropriate
to the development, ownership, maintenance and operation of the Vessels, and
the conduct of the Business and in other business activities directly related
to such businesses which do not interfere with the Business or with USS
Chartering’s performance of its obligations under the Support Agreement, which
could not reasonably be anticipated to result in a Material Adverse Effect or
in a Default or Event of Default, and which does not involve any vessel other
than a vessel engaged as either a chemical tanker or product tanker that is
eligible to transport cargo between ports in the United States under the
Merchant Marine Act of 1920.  Each of the
Vessels was built in the United States and has been continuously owned by a
citizen of the United States within the meaning of Section 2 of the Shipping
Act, 1916, as amended (46 App. U.S.C. § 802), qualified to operate in the
coastwide trade.


 


SECTION 6.9.   Ownership of Properties.  Each of the Loan Parties and each of their
respective Subsidiaries own good and marketable title to all of their
respective material properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights and including each Vessel owned by any Loan
Party), free and clear of all Liens, charges or claims (including infringement
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section
7.2.3.


 


SECTION 6.10.   Taxes. 
Each of the Loan Parties and each of their respective Subsidiaries have
filed all tax returns and reports required by law to have been filed by them
and have paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on their respective books.


 


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SECTION 6.11.   Pension and Welfare Plans.  During the twelve-consecutive-month period
prior to the date of the execution and delivery of this Agreement and prior to
the date of any Borrowing hereunder, no steps have been taken to terminate any
Pension Plan, and no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a Lien under section 302(f) of
ERISA.  No condition exists or event or
transaction has occurred with respect to any Pension Plan which could
reasonably be expected to result in the incurrence by any of the Loan Parties
or any member of the Controlled Group of any material liability, fine or
penalty.  Except as disclosed in Item 6.11
(“Employee Benefit Plans”) of the Disclosure Schedule, none of the Loan Parties
nor any member of the Controlled Group has any contingent liability with
respect to any post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title I of ERISA or
in other applicable law.


 


SECTION 6.12.   Environmental Warranties.  Except as set forth in Item 6.12
(“Environmental Matters”) of the Disclosure Schedule:


 


(a)           all facilities and property
(including underlying groundwater) owned or leased by any Loan Party or any of
their respective Subsidiaries are, and (in the case of facilities or property
leased by Loan Party as Lessee) have been, and continue to be, owned or leased
by such Loan Party and its respective Subsidiaries (to the Loan Party’s
knowledge as to real estate property leased by any Loan Party) in material
compliance with all Environmental Laws;


 


(b)           there have been no past, and there
are no pending or to any Loan Party’s knowledge threatened (in writing)


 


(i)            claims, complaints, notices or
requests for information received by any Loan Party or any of its respective Subsidiaries
with respect to any alleged violation of any Environmental Law, or


 


(ii)           complaints, notices or inquiries to
any Loan Party or any of its respective Subsidiaries regarding potential
liability under any Environmental Law;


 


nor does any Loan Party have knowledge or reason to believe that any
such notice will be received or is being threatened;


 


(c)           there have been no Releases by any
Loan Party of Hazardous Materials from, at, on or under any property now or
previously owned or leased by any Loan Party or any of their respective
Subsidiaries (to any Loan Party’s knowledge as to real estate property leased
by any Loan Party) or arising from or related to the operations of any Loan
Party or any Subsidiary or otherwise in connection with the Business that,
singly or in the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;


 


(d)           each Loan Party and its respective
Subsidiaries have been issued and are in material compliance with all permits,
certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary for their businesses;


 


59





















 


(e)           no property now or previously owned
or leased by any Loan Party or any of its respective Subsidiaries is (to any
Loan Party’s knowledge as to real estate property leased by any Loan Party)
listed or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
state list of sites requiring investigation or clean-up;


 


(f)            there are (to any Loan Party’s
knowledge as to real estate property leased by any Loan Party) no underground
storage tanks, active or abandoned, including petroleum storage tanks, on or
under any property now or previously owned or leased by any Loan Party or any
of its respective Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect;


 


(g)           none of the Loan Parties nor any
Subsidiary of any of the Loan Parties has directly transported or directly
arranged for the transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations which
could reasonably be expected to lead to material claims against such Loan Party
or such Subsidiary thereof for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA;


 


(h)           there are no polychlorinated
biphenyls or friable asbestos present at any property now or previously owned
or leased by any Loan Party or any Subsidiary (to any Loan Party’s
knowledge as to real estate property leased by any Loan Party) of such Loan
Party that, singly or in the aggregate, have, or could reasonably be expected
to have, a Material Adverse Effect; and


 


(i)            no conditions exist at, on or under
any property now or previously owned or leased by any Loan Party (to any Loan
Party’s knowledge as
to real estate property leased by any Loan Party) which, with the passage of
time, or the giving of notice or both, would give rise to liability under any
Environmental Law.


 


SECTION 6.13.  
Regulations T, U and X. 
No Loan Party is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock, and no proceeds of any Credit
Extension will be used for a purpose which violates, or would be inconsistent
with, F.R.S. Board Regulation T, U or X. 
Terms for which meanings are provided in F.R.S. Board Regulation T, U or
X or any regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.


 


SECTION 6.14.  
Accuracy of Information. 
All factual information heretofore or contemporaneously furnished by or
on behalf of any Borrower or any other Loan Party in writing to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby were, at the time so
furnished, and all other such factual information hereafter furnished by or on
behalf of any Borrower or any other Loan Party to the Administrative Agent or
any Lender will be, in each case when taken together with all such other
factual information previously so furnished, true and accurate in all material
respects on the date as of which such information is dated or certified and as
of the date of execution and delivery of


 


60





















 


this Agreement by the Administrative Agent and such Lender, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading in
light of the circumstances in which such information was furnished.


 


SECTION 6.15.  
Solvency. 
After giving effect to the transactions contemplated by the Contribution
Agreement, the value of the assets and properties of the Loan Parties and their
Subsidiaries, taken as a whole, at a fair valuation and at their then present
fair salable value is and, after giving effect to any pending Credit Extension
and the application of the amount of such Credit Extension, will be greater
than their total liabilities, including contingent liabilities and greater than
the amount that would be required to pay their probable aggregate liability on
their then existing debts as they become absolute and matured, each Borrower
has capital sufficient for the conduct of its business including any
contemplated or undertaken transaction and the Loan Parties and their
Subsidiaries, taken as a whole, have assets, and resources sufficient to pay
their liabilities, including contingent liabilities, as they become due.  No Loan Party intends to incur, or believes
that it will incur, debts beyond its ability to pay such debts as they become
due.


 


SECTION 6.16.  
Common Enterprise. 
The Borrowers are engaged in the business and operations described in Section 6.8.  Such business and operations require
financing on an integrated basis such that the credit supplied can be made
available from time to time to various of the Borrowers, as required for the
continued successful operation of each individual Borrower and the integrated
operation of the Borrowers as a whole. 
The Borrowers have requested the Lenders to make a portion of the credit
extensions made available hereunder primarily for the purpose of financing the
working capital requirements of the integrated operations of the Borrowers, and
a portion of the credit for the acquisition or construction of the new Vessels
which will increase the financial strength and income of the integrated group.  Each Borrower expects to derive substantial
benefit (and each Borrower may reasonably be expected to derive substantial
benefit) directly or indirectly, from the credit extended by the Lenders
hereunder, both in its separate capacity and as a member of the integrated
group since the successful operation and condition of each of the Borrowers is
dependent on the continued successful performance of the functions, and
profitable operations of, of the integrated group as a whole.


 


SECTION 6.17.  
No
Default.  Except as disclosed in Item 6.17
of the Disclosure Schedule, none of the Borrowers nor any of their Subsidiaries
is in default under or with respect to any Material Charter, the Support
Agreement, the ATB Construction Contract, or any contractual obligation that
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.


 


SECTION 6.18.  
Labor Relations. 
No Loan Party or Affiliate thereof is engaged in any unfair labor
practice which could reasonably be expected to have a Material Adverse
Effect.  There is (a) no unfair labor practice
complaint pending or, to the knowledge of each Loan Party and each of the
Subsidiaries, threatened (in writing) against a Loan Party or Affiliate thereof
before the National Labor Relations Board which could reasonably be expected to
have a


 


61





















 


Material Adverse Effect and no grievance or arbitration proceeding
arising out of or under a collective bargaining agreement is so pending or, to
the knowledge of any Loan Party, threatened (in writing) nor does any Loan
Party have knowledge or reason to believe that any such notice will be received
or is being threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the knowledge of each Loan Party, threatened (in writing)
against a Loan Party or any Affiliate thereof nor does any Loan Party have any
knowledge or reason to believe that any such action will occur or will be
threatened in writing; and (c) except as set forth on Item 6.18
of the Disclosure Schedule, no union representation question existing with
respect to the employees of a Loan Party or any Affiliate thereof and, to the
knowledge of any Loan Party, no union organizing activities are taking place
with respect to any thereof.


 


SECTION 6.19.  
Insurance. 
Each Loan Party has, with respect to its properties and business,
insurance covering the risks, in the amounts, with the deductible or other
retention amounts, and with the carriers, listed in the Mortgages, which
insurance meets the requirements of the Mortgages as of the date hereof and the
Closing Date.


 


SECTION 6.20.  
Use of Proceeds. 
The proceeds of the Credit Extensions shall be used solely for the
purposes set forth in Section
4.10.


 


SECTION 6.21.  
Compliance
with Laws.  Each Loan Party and its Subsidiaries is in
compliance in all material respect with all Requirements of Law except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.


 


SECTION 6.22.  
Representations in other
Loan Documents.  All representations made by
any Loan Party under any Loan Document are true, correct and complete in all
material respects as of the date when made or deemed made.


 


The rights and remedies of the Administrative Agent,
the Collateral Agent, the Letter of Credit Issuer, or any Lender in relation to
any misrepresentation or breach of a warranty on the part of any Loan Party or
any other Material Obligor shall not be prejudiced by any investigation by or
on behalf of any of the Administrative Agent, the Collateral Agent, the Letter
of Credit Issuer or any Lender, by the execution, delivery or performance of
any Loan Document, or by any other act or thing which may be done by or on
behalf of any such Person and which may, apart from this Section, prejudice
such rights or remedies.


 


ARTICLE VII


 


COVENANTS


 


SECTION 7.1.  
Affirmative Covenants. 
Each of the Borrowers agrees with the Administrative Agent, the Letter
of Credit Issuer and each Lender that, until all Commitments have terminated
and all Obligations have been paid and performed in full, the Borrowers will
perform the obligations set forth in this Section 7.1.


 


SECTION 7.1.1.  
Financial Information,
Reports, Notices, etc.  The Borrowers
will furnish, or will cause to be furnished, to each Lender, the Letter of
Credit Issuer and the


 


62





















 


Administrative Agent copies of the following financial statements,
reports, notices and information:


 


(a)           as soon as available and in any event
within 45 days of each calendar month and within 45 days after the end of each
of the first three Fiscal Quarters of each Fiscal Year of the Borrowers,
consolidated and consolidating balance sheets of the Borrowers and their
respective Subsidiaries as of the end of such calendar month and each such
Fiscal Quarter and consolidated and consolidating statements of earnings,
partners’ equity and cash flow of the Borrowers and their respective
Subsidiaries for such calendar month and each such Fiscal Quarter and, in the
case of each quarterly statement for any quarter ending after the first
anniversary of the date hereof, for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, certified
by the chief financial Authorized Officer of General Partner and each of the
Borrowers, all such monthly reports shall be accompanied with detailed
information setting forth individual Vessel activity, charter rates,
non-charter or off hire days and reasons, payments made under the Support
Agreement or required to be made with respect to such period under the Support
Agreement, capital expenditures (including payments made pursuant to the ATB
Construction Contract) and any insurance claims made or payments received under
any insurance policies, any coast guard or other governmental notices received
and such other information as the Administrative Agent or the Majority Lenders
shall from time to time reasonably request;


 


(b)           as soon as available and in any event
within 90 days after the end of each Fiscal Year of the Borrowers, a copy of
the annual audit report for such Fiscal Year for the Borrowers and their
respective Subsidiaries, including therein consolidated balance sheets of the
Borrowers and their respective Subsidiaries as of the end of such Fiscal Year
and consolidated statements of earnings, partners’ equity and cash flow of the
Borrowers and their respective Subsidiaries for such Fiscal Year, in each case
certified (without any Impermissible Qualification) in a manner reasonably
acceptable to the Administrative Agent and the Majority Lenders by PriceWaterhouseCoopers
LLP or other independent public accountants reasonably acceptable to the
Administrative Agent and the Majority Lenders, together with a certificate from
such accountants containing a computation of, and showing compliance with, each
of the financial ratios and restrictions contained in Section 7.2.4
and to the effect that, in making the examination necessary for the signing of
such annual report by such accountants, they have not become aware of any
Default or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing such Default
or Event of Default;


 


(c)           as soon as available and in any event
within 90 days after the end of each Fiscal Year of the General Partner, a copy
of the unaudited (or audited, if available) consolidated balance sheet of the
General Partner as of the end of such Fiscal Year and the consolidated
statements of earnings and cash flow for such Fiscal Year, in each case
certified by the chief financial Authorized Officer of General Partner as
fairly presenting, in accordance with GAAP, the financial position and the
results of operations of the


 


63





















 


General Partner and its Subsidiaries (or if available,
accompanied by an opinion of independent public accountants as described in Section 7.1.1(b));


 


(d)           as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, a certificate, executed by
the chief financial Authorized Officers of the General Partner and each of the
Borrowers, showing (in reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to the Administrative
Agent) compliance with the financial covenants set forth in Section 7.2.4;


 


(e)           as soon as possible and in any event
within five Business Days after having knowledge of the occurrence of each
Default, a statement of the chief financial Authorized Officers of the General
Partner and each of the Borrowers setting forth details of such Default and the
action which such Borrower has taken and proposes to take with respect thereto;


 


(f)            as soon as possible and in any event
within five Business Days after having knowledge of (x) the occurrence of
any adverse development with respect to any litigation, action, proceeding, or
labor controversy described in Section 6.7 or (y) the
commencement of any labor controversy, litigation, action or proceeding of the
type described in Section 6.7,
notice thereof and copies of all material documentation relating thereto;


 


(g)           promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the unit holders of the MLP (excluding any
periodic income tax reporting materials), and copies of all annual, regular,
periodic and special reports and registration statements which the MLP has
filed with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Administrative Agent pursuant hereto, in each case,
(i) which are not confidential in nature, as permitted by applicable laws,
as required by contractual restrictions not entered into in contemplation of
this Section 7.1.1(g), as permitted by recognized principles of
privilege or as otherwise determined in good faith by the MLP, and
(ii) which are not publicly available on the United States Securities and
Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System
(or “EDGAR”) or other similar publicly accessible sources of which a Borrower
provides written notice to the Administrative Agent and the Lenders;


 


(h)           immediately upon becoming aware of
the institution of any steps by any Loan Party or any other Person to terminate
any Pension Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section 302(f)
of ERISA, or the taking of any action with respect to a Pension Plan which
could reasonably be expected to result in the requirement that any Loan Party
furnish a bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by any Loan Party of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Loan Party with respect to any post-retirement


 


64





















 


Welfare Plan benefit, notice thereof and copies of all
material documentation relating thereto;


 


(i)            concurrently with the sending
thereof, copies of all information and reports which any Loan Party is required
to provide under any of the Transaction Documents and promptly upon receipt
thereof, copies of all information and notices which any Loan Party receives
under any of the Transaction Documents, excluding in each case copies of
routine correspondence delivered pursuant to the Charters;


 


(j)            within 30 days after the
commencement of each Fiscal Year of MLP, a projected consolidated balance sheet
of the MLP and its Subsidiaries as of the end of such Fiscal Year and related
projected consolidated statements of income, partners’ equity and cash flows
for such Fiscal Year, including therein an annual operating budget for the MLP
and its Subsidiaries for such Fiscal Year certified by an Authorized Officer of
the General Partner as being a true and complete copy of the projected
consolidated balance sheet and operating budget approved by the General Partner
for such Fiscal Year; provided
that the MLP may from time to time deliver to the Administrative Agent an
updated projected consolidated balance sheet and operating budget for any
Fiscal Year certified by an Authorized Officer of the General Partner as being
a true and complete copy of the updated projected consolidated balance sheet
and annual operating budget approved by the General Partner for the relevant
Fiscal Year;


 


(k)           such other information respecting the
condition or operations, financial or otherwise, of any Loan Party or any of
its Subsidiaries or (to the extent the Loan Parties are entitled to request
such information) any other Material Obligor as any Lender through the
Administrative Agent may from time to time reasonably request; and


 


(l)            any correspondence or notices to or
from any governmental authority, regulatory or self regulatory agencies, or
other entities with jurisdiction over any Loan Party pertaining to matters that
could reasonably be expected to have a Material Adverse Effect.


 


SECTION 7.1.2.  
Compliance with Laws, etc. 
Each Borrower will, and will cause each of its Subsidiaries to, comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):


 


(a)           the maintenance and preservation of
its legal existence (except as otherwise permitted under Section 7.2.10)
and qualification as a foreign partnership, limited liability company or
corporation, as the case may be; and


 


(b)           the payment, before the same become
delinquent, of all taxes, assessments and governmental charges imposed upon it
or upon its property except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.


 


SECTION 7.1.3.  
Maintenance of Properties. 
Each Borrower will, and will cause each of its Subsidiaries to,
maintain, preserve, protect and keep its properties in good repair,


 


65





















 


working order and condition, reasonable wear and tear excepted, and
make necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times unless such Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable.


 


SECTION 7.1.4.  
Insurance. 
Each Borrower will, and will cause each of its Subsidiaries to, maintain
or cause to be maintained with responsible insurance companies insurance with
respect to its properties and business against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of similar businesses and all insurance required to be maintained by the Borrowers
pursuant to the Mortgages (whether or not such Borrower is a party to such
Mortgage) and will, upon request of the Administrative Agent, furnish to each
Lender and the Letter of Credit Issuer at reasonable intervals a certificate of
an Authorized Officer of such Borrower setting forth the nature and extent of
all insurance maintained by the Borrowers and their Subsidiaries in accordance
with this Section.


 


SECTION 7.1.5.  
Books and Records. 
Each Borrower will, and will cause each of its Subsidiaries to, keep
books and records which accurately reflect in conformity with GAAP and all
Requirements of Law all of its business affairs and transactions and permit the
Administrative Agent, the Letter of Credit Issuer and each Lender or any of
their respective representatives, at reasonable times and intervals and (unless
an Event of Default shall have occurred and is continuing in which case no
notice is required) upon reasonable notice to the Borrowers, to visit all of
its offices, to discuss its financial matters with its officers and independent
public accountant (and each Borrower hereby authorizes such independent public
accountant to discuss such Borrower’s financial matters with each Lender or its
representatives whether or not any representative of such Borrower is present)
and to examine (and, at the expense of the Borrowers, photocopy extracts from)
any of its books or other corporate records.


 


SECTION 7.1.6.  
Environmental Covenant. 
Each Borrower will, and will cause each of its Subsidiaries to,


 


(a)           use and operate all of its facilities
and properties in material compliance with all Environmental Laws, keep all
necessary material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;


 


(b)           immediately notify the Administrative
Agent and provide copies upon receipt of all written claims, complaints, notices
or inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws, and shall promptly cure and have dismissed
with prejudice to the reasonable satisfaction of the Administrative Agent any
actions and proceedings relating to compliance with Environmental Laws; and


 


(c)           provide such information and
certifications which the Administrative Agent may reasonably request from time
to time to evidence compliance with this Section 7.1.6.


 


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SECTION 7.1.7.  
Required Reserves. 
The Borrowers shall, and shall cause each of their respective
Subsidiaries to, deposit into the Restricted Loss Proceeds Account (as defined
in the Cash Collateral Control Agreement) all proceeds of insurance
attributable to any Loss Event or to any Loss resulting in proceeds in excess
of $1,000,000 to be maintained and applied pursuant to the terms of the Cash
Collateral Control Agreement and Article 1, Section 11 of the Mortgages.  Amounts on deposit in the Restricted Loss
Proceeds Account shall be withdrawn and applied pursuant to the terms of the
Cash Collateral Control Agreement.


 


SECTION 7.1.8.  
Security. 
The Borrowers shall, and shall cause each of their respective
Subsidiaries to, grant the Collateral Agent for the benefit of the
Administrative Agent, the Letter of Credit Issuer, each Lender and each Secured
Hedge Counterparty a perfected first and prior Lien in and to all of its assets
and properties including without limitation all cash, investment property, bank
accounts, general intangibles, any vessels acquired pursuant to a Vessel
Acquisition, the ATB, any contracts executed with the ATB Contractor with
respect to the ATB and security for performance delivered by the ATB
Contractor, inventory, equipment, chattel paper, and instruments and agree to
execute, deliver and cause to be recorded such amendments to the Mortgages as
the Secured Hedge Counterparties may reasonably request to secure the
Obligations under the Hedge Agreements by the Mortgages, and as the Lenders may
reasonably request to secure the Obligations hereunder by the Mortgages
following any increase in the Commitments pursuant to Section 2.1.6,
all pursuant to documentation in form and substance satisfactory to the Administrative
Agent and the Collateral Agent.


 


SECTION 7.1.9.  
Hedge
Agreements.  The Borrowers shall terminate any Hedge
Agreements to the extent that the Hedging Obligations under such Hedge
Agreements cover a notional principal amount on any date in excess of 100% of
the principal amount of the Term Loans projected to be outstanding on such date
after taking into consideration any prepayments effectuated under the Loan
Documents.  The Borrowers agree with the
Secured Hedge Counterparties that in their best estimation, the maximum
potential Hedging Obligations pursuant to the Hedge Agreements executed and in
place as of the Closing is an amount equal to $5,500,000.


 


SECTION 7.1.10.  
Maintenance
of a Rating.  The Borrowers shall at all times maintain a
rating on the Notes from each of S&P and Moody’s.


 


SECTION 7.1.11.  
Undertakings
in Respect of Additional Subsidiaries.  If any
additional Subsidiary of MLP or any of its Subsidiaries is formed or acquired
after the Closing Date, the Borrowers will notify the Administrative Agent,
Collateral Agent and the Lenders thereof and the Borrowers and such Loan Party
will cause such Subsidiary (if such Subsidiary is wholly-owned by the MLP and
its other Subsidiaries or, if such Subsidiary is not so wholly-owned to the extent
of its control over such Subsidiary) to (a) execute a Guaranty
substantially in the form of Exhibit J (provided that such Subsidiary is not a
Borrower hereunder), a Security Agreement substantially in the form of Exhibit
I-1, and a Mortgage substantially in the form of Exhibit G if such Subsidiary owns any
vessels, within twenty (20) Business Days (or such timeframe as is acceptable
to the Administrative Agent) after such Subsidiary is formed or acquired and
promptly take such actions to create and perfect Liens on Subsidiary’s personal
and real property as required by Section 7.1.8, and (b) if and to the
extent that any equity interests in


 


67





















 


or Indebtedness of such Subsidiary are owned by or on behalf of such
Loan Party, such Loan Party will cause such equity interests owned by such Loan
Party and promissory notes evidencing such Indebtedness to be pledged pursuant
to a Pledge Agreement within twenty (20) Business Days (or such time as is
acceptable to the Administrative Agent) after such Subsidiary is formed or
acquired.


 


SECTION
7.1.12.   Revolver
Cleanup.  For a period of at least
fifteen (15) consecutive days during each twelve month period, commencing with
the Effective Date, the Borrowers shall have no Revolving Loans (other than
Letters of Credit) outstanding where the funds from such Revolving Loans have
been or are being used for working capital purposes.


 


SECTION 7.2.  
Negative Covenants. 
Each Borrower agrees with the Administrative Agent, the Letter of Credit
Issuer and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, such Borrower will perform
the obligations set forth in this Section 7.2.


 


SECTION 7.2.1.  
Business Activities. 
The Borrowers will not, and will not permit any of their Subsidiaries
to, engage in any business activity, except those described in Section 6.8.


 


SECTION 7.2.2.  
Indebtedness. 
The Borrowers will not, and will not permit any of their Subsidiaries
to, create, incur, assume or suffer to exist or otherwise become or be liable
in respect of any Indebtedness, other than, without duplication, the following:


 


(a)           Indebtedness in respect of the Loans,
Letter of Credit Obligations, and other Obligations;


 


(b)           Indebtedness existing as of the
Effective Date which is identified in Item 7.2.2(b) (“Ongoing Indebtedness”)
of the Disclosure Schedule;


 


(c)           Indebtedness in an aggregate
principal amount not to exceed $1,500,000 at any time outstanding or which is
incurred by the Borrowers or any of their Subsidiaries to a vendor of any
assets permitted to be acquired pursuant to Section 7.2.7 to finance its
acquisition of such assets;


 


(d)           unsecured Indebtedness incurred in
the ordinary course of business (including open accounts extended by suppliers
on normal trade terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or Contingent
Liabilities);


 


(e)           Indebtedness in respect of
Capitalized Lease Liabilities to the extent permitted by Section 7.2.7;


 


(f)            Indebtedness of the Borrowers and
their Subsidiaries in respect of Hedging Obligations; provided, that (i) such Hedging
Obligations are entered into solely with the purpose and effect of fixing and
capping interest rates on not more than 100% of the principal amount of the
Term Loans projected to be outstanding on any date that are


 


68





















 


accruing interest at a variable rate at any time; provided
that the floating rate index of each such contract generally matches the index
used to determine the floating rates of interest on the corresponding
indebtedness of the Borrowers to be hedged by such contract; and provided  further
that the Borrowers shall have the right to terminate any Hedge Agreements to
the extent that the Hedging Obligations under such Hedge Agreements cover a
notional principal amount which exceeds 100% of the Term Loans projected to be
outstanding at any time; and (ii) in each case, the underlying contracts are
with the Administrative Agent, the Letter of Credit Issuer or a Lender or
Affiliate of a Lender or with any other counterparty who at the time the
contract is made has long-term unsecured obligations rated A- or better by
Standard & Poor’s Ratings Group or A3 or better by Moody’s; and


 


(g)           unsecured Indebtedness of the MLP to
the General Partner in an amount not exceeding $2,000,000 in the aggregate at
any one time outstanding;


 


provided, however, that no Indebtedness
otherwise permitted by clauses
(c), (d),
(e),
or (g) shall be permitted to be incurred if, after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing.


 


SECTION 7.2.3.  
Liens. 
The Borrowers will not, and will not permit any of their Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any of their property,
revenues or assets, whether now owned or hereafter acquired, except:


 


(a)           Liens securing payment of the
Obligations, granted pursuant to any Loan Document;


 


(b)           [Intentionally Blank]


 


(c)           Liens for taxes, assessments or other
governmental charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;


 


(d)           Liens for crew’s wages, for wages of
stevedores when employed directly by a Borrower or any charterer, any manager,
or the master of the Vessel, or for general average or salvage (including contract
salvage), Liens for repairs or incident to current operations of a Vessel or
with respect to any alteration or installation made respecting a Vessel, Liens
for necessaries to a Vessel, Liens of carriers, warehousemen, mechanics,
materialmen and landlords, in each case, incurred in the ordinary course of
business arising by operation of law, and Liens granted to charterers under
charters entered into in the ordinary course of business to secure obligations
under the charter, and in the case of each of the foregoing, which are not due
and payable or which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;


 


(e)           Liens incurred in the ordinary course
of business in connection with workmen’s compensation, unemployment insurance
or other forms of governmental


 


69





















 


insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds;


 


(f)            Deposits to secure the performance
of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds and other obligations of a like nature
incurred in the ordinary course of business;


 


(g)           any interest or title of a lessor or
licensor under any lease or license entered into by any Borrower or any
Subsidiary in the ordinary course of business and covering only the assets
leased or licensed;


 


(h)           Liens securing Indebtedness of any
Loan Party or any Subsidiary incurred pursuant to Section 7.2.2(c) to finance the
acquisition of fixed or capital assets that will not become part of, or an
accession to, a Vessel; provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any property other
than the property acquired with the proceeds of such Indebtedness, (iii) the
amount of Indebtedness secured thereby is not increased, and (iv) such Liens do
not attach to any Vessel (as defined in the Mortgages) or any part thereof
including any equipment or inventory used in the operation of any Vessel; and


 


(i)            judgment Liens in existence less
than 30 days after the entry thereof or with respect to which execution has
been stayed or the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance companies.


 


SECTION 7.2.4.  
Financial Condition. 
The Borrowers will not permit:


 


(a)           The Total Debt Interest Coverage
Ratio as of the end of any fiscal quarter of MLP, beginning with fiscal quarter
ending on March 31, 2005, to be less than the ratio set forth below opposite
such fiscal quarter:


 




	
  Fiscal Quarters Ending

  	
   

  	
  Minimum Total

  Debt Interest

  Coverage Ratio

  	
   

  
	
  March 31, 2005 through and including June 30, 2006

  	
   

  	
  5.70:1

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.60:1

  	
   

  
	
  December 31, 2006 and each fiscal quarter thereafter

  	
   

  	
  5.70:1

  	
   

  






 


(b)           The Total Fixed Charge Coverage Ratio
as of the end of any fiscal quarter of MLP, beginning with fiscal quarter
ending on March 31, 2005, to be less than the ratio set forth below opposite
such fiscal quarter:


 


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  Fiscal Quarters Ending

  	
   

  	
  Minimum Total

  Fixed Charge

  Coverage Ratio

  	
   

  
	
  March 31, 2005 through and including June 30,
  2005

  	
   

  	
  4.70:1

  	
   

  
	
  September 30, 2005

  	
   

  	
  4.20:1

  	
   

  
	
  December 31, 2005

  	
   

  	
  3.40:1

  	
   

  
	
  March 31, 2006 through and including June 30,
  2006

  	
   

  	
  2.75:1

  	
   

  
	
  September 30, 2006

  	
   

  	
  2.55:1

  	
   

  
	
  December 31, 2006 through and including March
  31, 2007

  	
   

  	
  2.75:1

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.65:1

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.50:1

  	
   

  
	
  December, 2007 through and including March 31,
  2008

  	
   

  	
  2.40:1

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.45:1

  	
   

  
	
  September 30, 2008 through and including March
  31, 2009

  	
   

  	
  2.50:1

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.65:1

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.90:1

  	
   

  
	
  December 31, 2009 and each fiscal quarter
  thereafter

  	
   

  	
  3.05:1

  	
   

  






 


(c)           The Total Debt Leverage Ratio as of
the end of any fiscal quarter of MLP, beginning with fiscal quarter ending on
March 31, 2005, to be greater than the ratio set forth below opposite such
fiscal quarter:


 




	
  Fiscal Quarters Ending

  	
   

  	
  Maximum Total

  Debt Leverage

  Ratio

  	
   

  
	
  March 31, 2005

  	
   

  	
  2.80:1

  	
   

  
	
  June 30, 2005

  	
   

  	
  2.85:1

  	
   

  
	
  September 30, 2005 through and including
  December 31, 2005

  	
   

  	
  3.10:1

  	
   

  
	
  March 31, 2006 through and including March 31,
  2007

  	
   

  	
  3.20:1

  	
   

  
	
  June 30, 2007

  	
   

  	
  3.10:1

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.90:1

  	
   

  
	
  December 31, 2007 through and including March
  31, 2008

  	
   

  	
  2.80:1

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.75:1

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.60:1

  	
   

  
	
  December 31, 2008 through and including March
  31, 2009

  	
   

  	
  2.50:1

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.40:1

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.15:1

  	
   

  
	
  December 31, 2009 and each fiscal quarter thereafter

  	
   

  	
  2.00:1

  	
   

  






 


71





















 


SECTION 7.2.5.  
Investments. 
The Borrowers will not, and will not permit any of their Subsidiaries
to, make, incur, assume or suffer to exist any Investment in any other Person,
except:


 


(a)           Investments existing on the Effective
Date and identified in Item
7.2.5(a) (“Ongoing Investments”) of the Disclosure Schedule;


 


(b)           Cash Equivalent Investments;


 


(c)           without duplication, Investments
permitted as Indebtedness pursuant to Section 7.2.2;


 


(d)           without duplication, Investments
permitted as Capital Expenditures pursuant to Section 7.2.7;


 


(e)           Vessel Acquisitions;


 


(f)            without duplication, Investments in
any other Person where concurrently with such Investments, the other Person
becomes a Subsidiary of a Borrower, provided that the Loan Parties are in
compliance with Sections
7.1.11 and 7.2.14 hereunder; and


 


(g)           in the ordinary course of business,
Investments by the Borrowers in any of their Subsidiaries or any other
Borrower, or by any such Subsidiary in any of its Subsidiaries, by way of
contributions to capital or loans or advances;


 


provided, however, that


 


(h)           any Investment which when made
complies with the requirements of the definition of the term “Cash Equivalent Investment”
may continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; and


 


72





















 


(i)            no Investment otherwise permitted by
clause (e), (f) or
(g) other than Investments in Borrowers shall be permitted to
be made if, immediately before or after giving effect thereto, any Default
shall have occurred and be continuing.


 


SECTION 7.2.6.  
Restricted Payments, etc. 
On and at all times after the Effective Date:


 


(a)           other than the purchase of units in
connection with the exercise of unit options granted pursuant a long-term
incentive plan for employees, directors and consultants of the General Partner
and its Subsidiaries or pursuant to a unit purchase plan for such employees,
the conversion of Subordinated Units into Common Units (as such terms are
defined in the MLP Agreement), the redemption of Common Units owned by Shipping
Master with the proceeds from the sale of Common Units pursuant to the exercise
of the underwriters’ over-allotment option in the Equity Offering, the
redemption of Excess Units (as defined in the MLP Agreement) to the extent
necessary for the MLP to remain in continuous compliance with the citizenship
requirements of the Maritime Laws (as such term is defined in the MLP
Agreement), and to the extent a portion of the minimum quarterly Distribution
is treated as Capital Surplus (as such term is defined in the MLP Agreement),
the MLP will not apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other
retirement of, or agree or permit any of its Subsidiaries to purchase or
redeem, any shares of any class of capital stock or units or partnership
interests or membership interests in (now or hereafter outstanding) the MLP
(provided that the foregoing shall not prohibit any such Subsidiary from
purchasing any such shares, units or interests from the MLP), or warrants,
options or other rights with respect to any shares of any class of capital
stock of or membership interests in (now or hereafter outstanding) the MLP;


 


(b)           if a Default or Event of Default
shall have occurred and be continuing, or would result therefrom, the MLP will
not declare, pay or make any Distribution (in cash, property, or obligations)
on any interests (now or hereafter outstanding) in the MLP; provided,
however,
that the MLP may pay or make a Distribution if at the time such Distribution
was declared no Default or Event of Default shall have occurred and be continuing,
or resulted therefrom, provided that the payment or making of such Distribution
occurs within 30 days following the declaration of such Distribution; and


 


(c)           the Borrowers will not, and will not
permit any Subsidiary to, make any deposit for any of the purposes prohibited
by clause (a) of this Section
7.2.6.


 


SECTION 7.2.7.  
Capital Expenditures, etc. 
(a) The Borrowers will not, and will not permit any of their
Subsidiaries to, make or commit to make Capital Expenditures (other than
expenditures for the replacement of assets and property subject to a
Disposition made in compliance with Section 3.1(d), Insurance Related
Capital Expenditures, expenditures for the ATB expenditures for Vessels
constructed or acquired with the proceeds of any Credit Extensions available as
a result of the Commitments being increased pursuant to Section 2.1.6,
and expenditures, in an aggregate amount not to exceed $5,000,000, for the
construction and acquisition of any other Vessel) in any Fiscal Year, except
Capital Expenditures which do not


 


73





















 


aggregate in excess of the amount set forth below opposite such Fiscal
Year (the “Annual
Capital Expenditure Amount”):


 




	
  2004

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  2005

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  17,000,000

  	
   

  






 


plus with respect to each Fiscal Year of MLP ending on or after
December 31, 2004 an amount equal to any Capital Expenditures for the preceding
Fiscal Year permitted to be made under this Section 7.2.7 which were not made
during such prior Fiscal Year; provided, however, in the event the Borrowers
construct or acquire any Vessel (other than the ATB) with the proceeds of any
Credit Extensions available as a result of the Commitments being increased
pursuant to Section
2.1.6, then the Annual Capital Expenditure Amount shall be
increased to such amounts as the Administrative Agent shall determine in its
sole and reasonable discretion, including amounts necessary to accommodate
expenditures for the routine and customary maintenance and drydocking of the
Vessels.


 


(b)           The Borrowers may make Capital
Expenditures in any Fiscal Year in addition to the amounts permitted above if
(i) such Capital Expenditures are made in respect of a Vessel at the request of
a charterer for such Vessel, (ii) (x) in the case of charters entered into
during the Support Period covering Vessels initially owned by the Original
Owners, the amount so received from any charterer (other than Hess with respect
to the New York) will not be counted as part of the Negotiated Rate (as defined
in the Support Agreement) for the relevant Vessel pursuant to the terms of the
Support Agreement and no Default has occurred with respect to the Support
Agreement under Section
8.1.4 or 8.1.10, and (y) in the case of
charters on Vessels not covered by the Support Agreement and charters covering
Vessels initially owned by the Original Owners entered into after the Support
Period, any amount received from any charterer in respect of capital
expenditures made with respect to the Vessel chartered by such charterer, such
amount to be the cost of such capital expenditures plus a return on capital, as
certified in good faith by the chief financial Authorized Officer of USS Chartering
LLC, Chemical Chartering or USCS Chartering, as appropriate, both as to the
amount of the increase and that the increase represents the cost of such
capital expenditures plus a return on capital, and (iii) if, in respect of the
Existing Charter entered into by Hess for the New York, the amount so received
from Hess for the purpose of making such Capital Expenditures with respect to
the New York that is in excess of $35,000 per day for every year that such
Vessel is subject to the Support Agreement. 
The amount of the additional Capital Expenditures permitted to be made
by the Borrowers pursuant to this clause (b) of Section 7.2.7,
shall equal the amounts described in clauses (ii) and (iii) of
the immediately preceding sentence (such amounts being the “Reimbursed Capital
Expenditure Amounts”).


 


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SECTION 7.2.8.  
Rental Obligations. 
The Borrowers will not, and will not permit any of their Subsidiaries
to, enter into at any time any arrangement which does not create a Capitalized
Lease Liability and which involves the leasing by any Borrower or any of their
respective Subsidiaries from any lessor of any real or personal property (or
any interest therein), except (i) the USS Chartering Leases, USCS Chartering
Leases and the Chemical Chartering Lease, (ii) arrangements which, together
with all other such arrangements which shall then be in effect, will not
require the payment of an aggregate amount of rentals by any Borrower and their
respective Subsidiaries in excess of (excluding escalations resulting from a
rise in the consumer price or similar index) $700,000 for any Fiscal Year, and
(iii) leasing arrangements with lessors of vessels where at least 50% of the
capacity of such vessel will be utilized for the shipping of cargoes pursuant
to an arrangement between any Borrower, or its Subsidiary, and one or more
charterers who have executed a Material Charter; provided, however, that any calculation made for
purposes of this Section shall exclude any amounts required to be expended for
maintenance and repairs, insurance, taxes, assessments, and other similar
charges.


 


SECTION 7.2.9.  
Take or Pay Contracts. 
The Borrowers will not, and will not permit any of their respective
Subsidiaries to, enter into or be a party to any arrangement for the purchase
of materials, supplies, other property or services if such arrangement by its
express terms requires that payment be made by any Loan Party or such
Subsidiary regardless of whether such materials, supplies, other property or
services are delivered or furnished to it.


 


SECTION 7.2.10.  
Consolidation, Merger,
etc.  Except as expressly provided in the
Contribution Agreement, the Borrowers will not, and will not permit any of
their respective Subsidiaries to, liquidate or dissolve, consolidate with, or
merge into or with, any other corporation, or purchase or otherwise acquire all
or substantially all of the assets of any Person (or of any division thereof)
except (i) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, a Loan Party or any other Subsidiary,
(ii) any Loan Party may liquidate or dissolve voluntarily into, and may
merge with and into, any other Borrower (other than MLP), (iii) the assets
or stock or partnership interests or membership interests of any Subsidiary may
be purchased or otherwise acquired by a Loan Party or any other Subsidiary and
(iv) the assets or stock or partnership interests or membership interests
of any Loan Party may be purchased or otherwise acquired by any other Loan
Party provided
that MLP and Operating LLC may not acquire the assets of any other Loan Party
other than the equity interests in such Loan Party.


 


SECTION 7.2.11.  
Asset Dispositions, etc. 
Except as expressly provided in the Contribution Agreement, the
Borrowers will not, and will not permit any of their respective Subsidiaries to
Dispose of or grant options, warrants or other rights with respect to, all or
any substantial part of their assets (including accounts receivable and capital
stock of and partnership interests and membership interests in the Subsidiaries
but excluding units in MLP) to any Person except for the chartering of the
Vessels in the ordinary course of business and in compliance with the terms of
the Transaction Documents, unless such Disposition does not involve a Vessel,
or any of the Borrowers’ rights and interests under the Support Agreement or
the ATB Construction Contract or any equity interests in any Subsidiary and the
net book value of the assets Disposed of, together with the net book value of
all other assets Disposed of by the Borrowers or any of their respective
Subsidiaries pursuant to this clause since the Effective Date (other than


 


75





















 


Dispositions of obsolete or worn out equipment or inventory in the
ordinary course of business), does not exceed $1,000,000.


 


SECTION 7.2.12.  
Certain Agreements.


 


(a)           The Borrowers will not enter into or
consent to any amendment, supplement or other modification of any of the terms
or provisions contained in, or applicable to, the Support Agreement or the ATB
Construction Contract (including any instruments with respect to any security
for performance delivered in connection thereto), other than any amendment,
supplement or other modification (i) which extends the maturity date of any
obligation payable by the Borrowers under the Support Agreement, (ii) which
reduces the amount of any required repayment or redemption to be made by any
Borrower thereunder or reduces or otherwise impairs any obligation or liability
of a Borrower thereunder, or (iii) to covenants and other non-material
provisions on terms that are more favorable in the aggregate to the Borrowers
than the then existing terms.  Without
limiting the generality of the foregoing the Borrowers shall not take any
action or fail to take any action that could reasonably be expected to impair
their rights or remedies under the Support Agreement.


 


(b)           (i)            None
of the Borrowers shall execute and deliver any charter if such Borrower’s
performance thereunder could reasonably be expected to result in a violation of
any applicable requirements under any material insurance policy.


 


(ii)           None of  the Borrowers shall (1) amend or modify the
terms of any Material Charter, or (2) cause, consent to or permit an early
cancellation or termination or repudiation of or an assignment of a Material
Charter, (in each case, whether voluntary or involuntary), or (3) permit to
exist any defaults or breaches beyond any applicable cure period under any
Material Charter that would either allow such charter to be terminated, reduce
the amounts payable by the charterer thereunder, or increase the liabilities of
the Borrowers thereunder, or (4) permit any Material Charter to become
unenforceable (each of the foregoing events in clauses (1) through (4)
being a “Material
Event”), unless


 


(A)          with respect to the Material Charters
covering a Vessel initially owned by the Original Owners, either (i) such
Material Event could not reasonably be anticipated to have a material adverse
effect on (x) the Business or otherwise on the business, operations,
properties, assets, liabilities, or condition (financial or otherwise) of the
Borrowers taken as a whole, or (y) the validity or enforceability of this
Agreement or of any Transaction Document or the validity, enforceability,
perfection or priority of any Lien securing the Obligations or any obligations
to the Secured Hedge Counterparties under the Hedge Agreements permitted
pursuant to Section
7.2.2, or (z) the ability of any Borrower to perform its
obligations under this Agreement or any of the other Transaction Documents to
which it is a party; or (ii) within thirty (30) days after the occurrence of a
Material Event, Charter LLC or another Borrower


 


76





















 


executes one or more replacement charters that is
either an Investment Grade Charter or an Excluded Charter; and


 


(B)           with respect to all other Material
Charters, either (i) such Material Event could not reasonably be anticipated to
have a material adverse effect on (x) the Business or otherwise on the
business, operations, properties, assets, liabilities, or condition (financial
or otherwise) of the Borrowers and their Subsidiaries taken as a whole, or (y)
the validity or enforceability of this Agreement or of any Transaction Document
or the validity, enforceability, perfection or priority of any Lien securing
the Obligations or any obligations to the Secured Hedge Counterparties under
the Hedge Agreements permitted pursuant to Section 7.2.2, or (z) the ability of
any Borrower to perform its obligations under this Agreement or any of the
other Transaction Documents to which it is a party; or (ii) within sixty (60)
days after the occurrence of a Material Event, USCS Chartering, Chemical
Chartering or another Borrower executes one or more replacement charters with a
charterer reasonably acceptable to the Administrative Agent and for which the
annual minimum revenues (defined as the annual minimum quantity commitment
under the charter multiplied by the relevant freight rate) for the balance of
the unexpired term of the Material Charter being replaced are, in aggregate, in
an amount equal to or greater than the annual minimum revenues under such
Material Charter.


 


(c)           If any replacement charter is
executed or becomes applicable pursuant to clause (b) of this Section 7.2.12,
then within 60 days of such replacement charter’s execution or application, the
Borrowers shall deliver to the Administrative Agent a duly executed Third Party
Consent with respect to such replacement charter, substantially in the form of Exhibit K-2.  The Borrowers shall not take any action which
is precluded by the terms of any Third Party Consent or which would violate any
requirements or conditions under any insurance policy required to be maintained
under the Mortgage.


 


(d)           The Borrowers will not enter into or
consent to or suffer to exist any amendment, replacement supplement or other
modification of any of the terms or provisions contained in, or applicable to,
the Organic Documents of the General Partner, the Borrowers, or any of their
Subsidiaries in any respect that would (a) materially adversely affect the
Administrative Agent, the Collateral Agent or Lenders, the Borrowers’ ability
to perform the Obligations or any Guarantor’s ability to perform its
obligations under its Guaranty, or have a Material Adverse Effect, or (b)
change the definition (or its related uses) of the term “Outstanding” in
Section 1.1 of the MLP Agreement (as in effect on the Closing Date) in a manner
that would permit any Person or Group (each as defined in the MLP Agreement),
other than the General Partner and its Affiliates (as defined in the MLP
Agreement), that beneficially owns 20% or more of any Outstanding Partnership
Securities (as defined in the MLP Agreement) to vote or have such Person or
Group’s Partnership Securities (as defined in the MLP Agreement) considered for
calculating required votes, determining the presence of a quorum or other


 


77





















 


similar purposes except under the circumstances as set
forth in clauses (i) through (iii) of such definition in the MLP Agreement (as
in effect on the Closing Date), in each such case without the prior written
consent of the Administrative Agent and Majority Lenders.


 


SECTION 7.2.13.  
Transactions with
Affiliates.  The Borrowers will not, and will not permit
any of their respective Subsidiaries to, enter into, or cause, suffer or permit
to exist any arrangement or contract with any of its other Affiliates other
than (i) the USS Chartering Leases, (ii) the employment agreements executed
between USS Vessel Management Inc. (or any successor thereto) and Paul Gridley,
Calvin G. Chew, Jeffrey M. Miller, Alan Colleti, Albert E. Bergeron, and Joseph
P. Gehegan, (iii) arrangements pursuant to which General Partner and its
Subsidiaries will provide certain personnel for operation of the Borrowers,
(iv) the Chemical Chartering Leases, (v) agreements among each Borrower and its
Subsidiaries not involving any other Affiliate, (vi) the USCS Chemical
Chartering Lease, (vii) the Contribution Agreement, (viii) the MLP
Agreement, (ix) the redemption of Common Units of the MLP in the event of the
exercise by the underwriters of the over-allotment option as provided in
Section 5.1 of the Contribution Agreement, (x) customary directors’ fees
payable to outside directors of the General Partner, (xi) reimbursement of
General Partner for reasonable and customary expenses incurred in the ordinary
course of business pursuant to Section 7.4(a) of the MLP Agreement, (xii) loans
and repayments thereof permitted pursuant to Section 7.6 of the MLP Agreement
and Section 7.2.2(g) hereunder, (xiii) subchartering arrangements
with respect to any Charter entered into between any of USS Chartering, USCS
Chartering and Chemical Chartering, and (xiv) an indemnity, not available
until one year and one day after the indefeasible payment in full in cash of
all Obligations, the termination or expiration of all Commitments and the termination
or expiration of all Letters of Credit and in a form reasonably satisfactory to
the Administrative Agent, from MLP to any Guarantor with respect to amounts
payable under a Guaranty, unless such arrangement or contract is
fair and equitable to such Borrower or such Subsidiary and is an arrangement or
contract of the kind which would be entered into by a prudent Person in the
position of such Borrower or such Subsidiary with a Person which is not one of
its Affiliates.


 


SECTION 7.2.14.  
Negative Pledges,
Restrictive Agreements, etc.  The Borrowers
will not, and will not permit any of their respective Subsidiaries to, enter
into any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by clause (c)
of Section 7.2.2
as in effect on the Effective Date, or by clause (c) of Section 7.2.2
as to the assets financed with the proceeds of such Indebtedness which in each
case do not prohibit the execution, delivery and performance by the Borrowers
under the Transaction Documents) prohibiting


 


(a)           the creation or assumption of any
Lien upon its properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of any Borrower to amend or otherwise modify this
Agreement or any other Transaction Document; or


 


(b)           the ability of any Borrower or any
other Subsidiary to make any payments, directly or indirectly, to any Borrower
by way of dividends, advances, repayments of loans or advances, reimbursements
of management and other intercompany charges, expenses and accruals or other
returns on investments, or any other agreement or


 


78





















 


arrangement which restricts the ability of any such
Borrower or Subsidiary to make any payment, directly or indirectly, to any
Borrower.


 


ARTICLE VIII


 


EVENTS OF DEFAULT


 


SECTION 8.1.  
Listing of Events of
Default.  Each of the following events or occurrences
described in this Section
8.1 shall constitute an “Event of Default”.


 


SECTION 8.1.1.  
Non-Payment of
Obligations.  The Borrowers shall default in the payment or
prepayment when due of any principal of or interest on any Loan, or the
Borrowers or any other Loan Party shall default (and such default shall
continue unremedied for a period of five days) in the payment when due of any
commitment fee or of any other Obligation.


 


SECTION 8.1.2.  
Breach of Warranty. 
Any representation or warranty of any Loan Party made or deemed to be
made hereunder or in any other Transaction Document executed by it or any other
writing or certificate furnished by or on behalf of any Borrower or other Loan
Party to the Administrative Agent or any Lender for the purposes of or in
connection with this Agreement or any such other Transaction Document
(including any certificates delivered pursuant to Article V) is or shall be incorrect
when made in any material respect.


 


SECTION 8.1.3.  
Non-Performance of
Certain Covenants and Obligations.  The Borrowers
shall default in the due performance and observance of any of their obligations
under Section 7.2
or Section 7.1.1(e),
7.1.4,
or 7.1.7.


 


SECTION 8.1.4.  
Non-Performance of Other
Covenants and Obligations.  (a) Any
Loan Party or the General Partner shall default in the due performance and
observance of any other agreement contained herein or in any other Transaction
Document executed by it, and such default shall continue unremedied for a
period of 30 days after notice thereof shall have been given to the Borrowers
by the Administrative Agent or any Lender; or (b) at any time during the
Support Period, Hess shall fail to make a payment when due under the Support
Agreement, and (i) such failure shall continue unremedied for a period of 30
days immediately following a period not in excess of 45 days commencing on the
day on which such failure occurred during which USS Chartering LLC is
diligently and in good faith pursuing its rights and remedies against Hess in
accordance with the Support Agreement, and (ii) following the expiration of
such 30 day period, the Majority Lenders declare the occurrence of an Event of
Default as a result thereof; provided that (x) at the request of
the Borrowers the Lenders agree to meet with the Borrowers during such 30 day
cure period if so requested by the Borrowers to provide a forum for the Borrowers
to present evidence to the effect that such Default is not material.


 


SECTION 8.1.5.  
Default on Other
Indebtedness.  A default shall occur in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any Indebtedness (other than Indebtedness described in Section 8.1.1)
of any Loan Party having a principal amount, individually, or in the aggregate
for all Indebtedness of all Loan Parties, in excess of $1,000,000, or a default
shall occur in the performance or observance of any obligation or condition
with respect to such Indebtedness if the effect of such default is to


 


79





















 


accelerate the maturity of any such Indebtedness or such default shall
continue unremedied for any applicable period of time sufficient to permit the
holder or holders of such Indebtedness, or any trustee or Administrative Agent
for such holders, to cause such Indebtedness to become due and payable prior to
its expressed maturity.


 


SECTION 8.1.6.  
Judgments. 
One or more judgments or orders for the payment of money where the
uninsured portion of such claim (excluding permitted deductibles) is in excess
of $1,000,000 individually or in the aggregate shall be rendered against the
Loan Parties or any of them and either


 


(a)           enforcement proceedings shall have
been commenced by any creditor upon such judgment or order; or


 


(b)           a stay of enforcement of such judgments
or orders, by reason of a pending appeal or otherwise, shall not be in effect
within 60 days from the entry thereof.


 


SECTION 8.1.7.  
Pension Plans. 
Any of the following events shall occur with respect to any Pension Plan


 


(a)           the institution of any steps by any
Loan Party, any member of its Controlled Group or any other Person to terminate
a Pension Plan if, as a result of such termination, the Loan Parties or any
such member could be required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $500,000; or


 


(b)           a contribution failure occurs with
respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA.


 


SECTION 8.1.8.  
Change of Control. 
Any Change in Control shall occur.


 


SECTION 8.1.9.  
Bankruptcy, Insolvency,
etc.  The General Partner, any Loan Party or any of
their Subsidiaries shall


 


(a)           become insolvent or generally fail to
pay, or admit in writing its inability or unwillingness to pay, debts as they
become due;


 


(b)           apply for, consent to, or acquiesce
in, the appointment of a trustee, receiver, sequestrator or other custodian for
the General Partner, for any Loan Party and for any of their Subsidiaries or
any property of any thereof, or make a general assignment for the benefit of
creditors;


 


(c)           in the absence of such application,
consent or acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for the General Partner, any
Loan Party and any of their Subsidiaries or for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days, provided that each Loan Party hereby
expressly authorizes the Administrative Agent and each Lender to appear in any
court conducting


 


80





















 


any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;


 


(d)           permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the General Partner, any
Loan Party or any of their respective Subsidiaries, and, if any such case or
proceeding is not commenced by the General Partner, such Loan Party or such
Subsidiary, such case or proceeding shall be consented to or acquiesced in by
the General Partner, such Loan Party or such Subsidiary or shall result in the
entry of an order for relief or shall remain for 60 days undismissed, provided
that each Loan Party and each Subsidiary hereby expressly authorizes the
Administrative Agent and each Lender to appear in any court conducting any such
case or proceeding during such 60-day period to preserve, protect and defend
their rights under the Transaction Documents; or


 


(e)           take any action authorizing, or in
furtherance of, any of the foregoing.


 


SECTION 8.1.10.  
Impairment of Security,
etc.  (a) The Support Agreement, shall (except in
accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of Hess at any time during the Support Period and the Majority Lenders declare
an Event of Default as a result thereof at any time but not earlier than thirty
days after the occurrence and during the continuance of such event; or (b) Hess
shall, directly or indirectly, at any time during the Support Period contest in
any manner such effectiveness, validity, binding nature or enforceability, and
the Majority Lenders declare an Event of Default as a result thereof at any
time but not earlier than thirty days after the occurrence and during the
continuance of such event; or (c) any Lien securing any Obligation shall,
in whole or in part, cease to be a perfected first priority Lien, subject only
to those exceptions expressly permitted by such Transaction Document; or (d)
any Loan Document shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or in any material respect cease to be
the legally valid, binding and enforceable obligation of any Loan Party party
thereto.


 


SECTION 8.1.11.   Guarantor Defaults.  Any Guarantor fails in any material respect
to perform or observe any term, covenant or agreement in the Guaranty executed
by such Guarantor and such failure shall continue unremedied for a period of 30
days after notice thereof shall have been given to the Borrowers by the
Administrative Agent or any Lender; or any Guaranty is for any reason (other
than satisfaction in full of all Obligations and the termination of the
Commitments) partially (including with respect to future advances) or wholly
revoked or invalidated, or otherwise ceases to be in full force and effect in
any material respect, or any Guarantor or any other Person contests in any
manner the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.


 


SECTION 8.1.12.   Material Adverse Change.  The occurrence of any event which could
reasonably be anticipated to have a material adverse effect in the condition
(financial or otherwise), operations, assets, Business, or properties of the
MLP and its Subsidiaries taken as a whole or in the Loan Parties’ ability to
perform their respective obligations under this Agreement or any of the other
Loan Documents.


 


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SECTION 8.1.13.  
MLP Agreement. 
The General Partner shall default in the observance or performance of
any provision of the MLP Agreement and such default could reasonably be
anticipated to have a Material Adverse Effect.


 


SECTION 8.2.  
Action if Bankruptcy. 
If any Event of Default described in clauses (a) through (d) of Section 8.1.9
shall occur, the Commitments (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all outstanding
Loans and all other Obligations shall automatically be and become immediately
due and payable, without notice or demand.


 


SECTION 8.3.  
Action if Other Event of
Default.  If any Event of Default (other than any Event
of Default described in clauses (a) through (d) of Section 8.1.9)
shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Majority
Lenders, shall by notice to the Borrowers declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate.


 


ARTICLE IX


 


THE ADMINISTRATIVE AGENT, LETTER
OF CREDIT ISSUER,

ARRANGER AND COLLATERAL AGENT


 


SECTION 9.1.  
Actions. 
(a) Each Lender hereby appoints CIBC as its Administrative Agent under and for purposes
of this Agreement, the Notes and each other Loan Document.  Each Lender authorizes the Administrative
Agent to act on behalf of such Lender under this Agreement, the Notes and each
other Loan Document and, in the absence of other written instructions from the
Majority Lenders received from time to time by the Administrative Agent (with
respect to which the Administrative Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Administrative Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto.  Each Lender hereby indemnifies (which
indemnity shall survive any termination of this Agreement) the Administrative
Agent, pro
rata
according to such Lender’s Percentage, from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any
kind or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, the Administrative Agent in any way relating to or arising
out of this Agreement, the Notes and any other Loan Document, including
reasonable attorneys’ fees, and as to which the Administrative Agent is not
reimbursed by the Borrowers; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from the
Administrative Agent’s gross negligence or wilful misconduct.  The Administrative Agent shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement,


 


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the Notes or any other Loan Document, unless it is indemnified
hereunder to its reasonable satisfaction. 
If any indemnity in favor of the Administrative Agent shall be or
become, in the Administrative Agent’s determination, inadequate, the
Administrative Agent may call for additional indemnification from the Lenders
and cease to do the acts indemnified against hereunder until such additional
indemnity is given.


 


(b)           Each Lender hereby appoints the
Collateral Agent to act as trustee on its behalf solely for the purpose of
acting as mortgagee under Mortgages and holding the first preferred mortgage
interest in each Vessel granted to the Collateral Agent as trustee pursuant to
the respective Mortgages.  The Collateral
Agent hereby accepts such trust and declares that, as trustee, it will hold
each Mortgage for the sole use and benefit of the Lenders.  The Collateral Agent shall, on behalf of the
trust created hereby, perform its obligations hereunder, but only upon the
terms and conditions of this Agreement.


 


(c)           The Letter of Credit Issuer shall act
on behalf of the Lenders with respect to any Letters of Credit issued by it and
the documents associated therewith until such time (and except for so long) as
the Administrative Agent may agree at the request of the Majority Lenders to
act for the Letter of Credit Issuer with respect thereto; provided,
however,
that the Letter of Credit Issuer shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Article IX
with respect to any acts taken or omissions suffered by the Letter of Credit
Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term “Administrative
Agent” as used in this Article
IX included the Letter of Credit Issuer with respect to such
acts or omissions, and (ii) as additionally provided herein with respect
to the Letter of Credit Issuer.


 


(d)           The term “Administrative Agent” as
used in this Article
IX shall also include the Arranger and the Collateral Agent
and the Arranger and the Collateral Agent shall have all of the benefits and
immunities provided to the Administrative Agent in this Article IX
with respect to any acts or omissions suffered by the Arranger or the
Collateral Agent with respect to its activities as arranger of the facilities
described in this Agreement and the other Transaction Documents, and with
respect to its activities as Collateral Agent under the Loan Documents, as the
case may be, and as additionally provided in the other Loan Documents with
respect to the Collateral Agent.


 


SECTION 9.2.  
Funding Reliance, etc. 
Unless the Administrative Agent shall have been notified by telephone,
confirmed in writing, by any Lender (i) by 5:00 p.m., New York time, on
the day prior to a Borrowing in the case of any Borrowing consisting of a LIBO
Loan, or (ii) by noon New York time on the day of the Borrowing, in the
case of any other Borrowing, that such Lender will not make available the
amount which would constitute its Revolver Percentage or Term Percentage, as
applicable, of such Borrowing on the date specified therefor, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent and, in reliance upon such assumption, make
available to the Borrowers a corresponding amount.  If and to the extent that such Lender shall
not have made such amount available to the Administrative Agent, such Lender on
the one hand and the Borrowers on the other severally agree to repay the
Administrative Agent forthwith on demand such corresponding


 


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amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrowers to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Base Rate Loans (including the Applicable Margin
applicable thereto); it being understood that all obligations of the Borrowers
hereunder shall be joint and several.


 


SECTION 9.3.  
Exculpation. 
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable to any Lender for any action taken or
omitted to be taken by it under this Agreement or any other Loan Document, or
in connection herewith or therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution
of this Agreement or any other Loan Document, nor for the creation, perfection
or priority of any Liens purported to be created by any of the Loan Documents,
or the validity, genuineness, enforceability, existence, value or sufficiency
of any collateral security, nor to make any inquiry respecting the performance
by any Loan Party of its obligations hereunder or under any other Loan
Document.  Any such inquiry which may be
made by the Administrative Agent shall not obligate it to make any further
inquiry or to take any action.  The
Administrative Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement
or writing which the Administrative Agent believes to be genuine and to have
been presented by a proper Person.


 


SECTION 9.4.  
Successor. 
The Administrative Agent may resign as such at any time upon at least 30
days’ prior notice to the Borrowers and all Lenders.  If the Administrative Agent at any time shall
resign, the Majority Lenders may appoint another Lender as a successor Administrative
Agent which shall thereupon become the Administrative Agent hereunder.  If no successor Administrative Agent shall
have been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent’s giving
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be one of
the Lenders or a commercial banking institution organized under the laws of the
U.S. (or any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$500,000,000.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from
the retiring Administrative Agent such documents of transfer and assignment as
such successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of


 


(a)           this Article IX shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement; and


 


(b)           Section 10.3 and Section 10.4
shall continue to inure to its benefit.


 


In addition and not by way of limitation of the foregoing, the
Collateral Agent may be replaced with cause by the Administrative Agent or the
Majority Lenders with 30 days prior notice but


 


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only upon appointing pursuant to such notice a new Collateral Agent
meeting the requirements to serve as Administrative Agent hereunder and
acceptance of such appointment by the replacement Collateral Agent.  All the provisions relating to the
replacement of the Administrative Agent upon resignation shall also apply to
the replacement of the Collateral Agent whether upon resignation by the
Collateral Agent or upon replacement by the Collateral Agent, the Administrative
Agent or the Majority Lenders.


 


SECTION 9.5.  
Credit Extensions by CIBC
and KeyBank National Association.  Each of CIBC and KeyBank National Association shall have
the same rights and powers with respect to (x) the Credit Extensions made by it
or any of its Affiliates, and (y) the Notes held by it or any of its Affiliates
as any other Lender and may exercise the same as if it were not the
Administrative Agent, Arranger, Letter of Credit Issuer or Collateral Agent, as
the case may be.  Each of CIBC and KeyBank National Association  and their Affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with any Loan
Party or any Subsidiary or Affiliate of any Loan Party as if CIBC or KeyBank National Association,
respectively, were not the Administrative Agent, Arranger,
Letter of Credit Issuer or Collateral Agent, as the case may be hereunder.


 


SECTION 9.6.  
Credit Decisions. 
Each Lender acknowledges that it has, independently of the
Administrative Agent and each other Lender, and based on such Lender’s review
of the financial information of the Loan Parties, this Agreement, the other
Transaction Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitments.  Each Lender also
acknowledges that it will, independently of the Administrative Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Transaction
Document.


 


SECTION 9.7.  
Copies, etc. 
The Administrative Agent shall give prompt notice to each Lender of each
notice or request required or permitted to be given to the Administrative Agent
by the Borrowers pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by the Borrowers). 
The Administrative Agent will distribute to each Lender each document or
instrument received for its account and copies of all other communications received
by the Administrative Agent from any Borrower for distribution to the Lenders
by the Administrative Agent in accordance with the terms of this Agreement.


 


SECTION 9.8.  
Arranger; Bookrunner. 
None of the Lenders or other Persons or the Arranger identified on the
facing page, in this Agreement, or signature pages of this Agreement as an “arranger,”
“lead arranger,” “sole lead arranger” or “bookrunner” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such and only to the extent it is a
Lender.  Without limiting the foregoing,
none of the Lenders or other Persons so identified as an “arranger,” “lead
arranger,” “sole lead arranger” or “bookrunner” shall have, or be deemed to
have, any fiduciary relationship with any Lender or any other Person.  Each Lender acknowledges that it has not
relied, and will


 


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not rely, on any of the Lenders or the Arranger so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.


 


ARTICLE X


 


MISCELLANEOUS PROVISIONS


 


SECTION 10.1.  
Waivers, Amendments, etc. 
The provisions of this Agreement and of each other Transaction Document
may from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Borrowers or the
applicable Loan Party and the Majority Lenders; provided, however, that no such amendment,
modification or waiver which would:


 


(a)           modify any requirement hereunder that
any particular action be taken by all the Lenders or by the Majority Lenders
shall be effective unless consented to by each Lender;


 


(b)           modify this Section 10.1,
change the definition of “Majority Lenders”, increase any
Commitment Amount or the Percentage of any Lender other than pursuant to Section 2.1.6,
reduce any fees described in Article III, change the schedule of
reductions to the Commitments provided for in Section 3.1, release any collateral
security, except as otherwise specifically provided in any Loan Document,
release any Guarantor, limit any Guarantor’s liability in respect of its
Guaranty, or terminate any Guaranty, or extend any Commitment Termination Date
shall be made without the consent of each Lender, the Letter of Credit Issuer and
each holder of a Note;


 


(c)           extend the due date for, or reduce
the amount of, any scheduled repayment or prepayment of principal of or
interest on any Credit Extension (or reduce the principal amount of or rate of
interest on any Credit Extension), or any fees or any other amount payable
hereunder or under any Loan Document or change the definition of Applicable
Margin or Letter of Credit Commitment Fee shall be made without the consent of
all the Lenders;


 


(d)           postpone any date fixed under the
Support Agreement for the payment of any obligation payable by Hess thereunder,
decrease any amount payable by Hess under any Transaction Agreement, increase
any of the obligations of any of the Borrowers under the Support Agreement, or
release or otherwise diminish, impair or decrease any obligation of Hess under
the Support Agreement; or


 


(e)           affect adversely the interests,
rights or obligations of the Administrative Agent (as defined in Article IX)
or the Letter of Credit Issuer qua the Administrative Agent (as defined
in Article IX)
or the Letter of Credit Issuer respectively shall be made without consent of
the Administrative Agent (as defined in Article IX) or the Letter of Credit
Issuer, as the case may be and, provided  further, that no amendment, waiver or
consent shall, unless in writing and signed by the Letter of Credit Issuer in
addition to the Majority Lenders or all the Lenders, as the case may be, affect
the rights or duties of the


 


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Letter of Credit Issuer under this Agreement or under
any Letter of Credit Confirmation relating to any Letter of Credit issued or to
be issued by it.


 


No failure or delay on the part of the Administrative Agent, the Letter
of Credit Issuer, the Collateral Agent, any Lender or the holder of any Note in
exercising any power or right under this Agreement or any other Transaction
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right.  No notice to or demand on any Loan Party in
any case shall entitle it to any notice or demand in similar or other
circumstances.  No waiver or approval by
the Administrative Agent, the Letter of Credit Issuer, the Collateral Agent,
any Lender or the holder of any Note under this Agreement or any other
Transaction Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require
any similar or dissimilar waiver or approval thereafter to be granted
hereunder.


 


SECTION 10.2.  
Notices. 
All notices and other communications provided to any party hereto under
this Agreement or any other Transaction Document shall be in writing or by
facsimile and addressed, delivered or transmitted to such party at its address
or facsimile number set forth below its signature hereto or set forth in the
Lender Addendum Agreement or the Lender Assignment Agreement or at such other
address or facsimile number as may be designated by such party in a notice to
the other parties.  Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent
by pre-paid courier service, shall be deemed given when received; any notice,
if transmitted by facsimile, shall be deemed given when transmitted (and
receipt electronically confirmed).


 


SECTION 10.3.  
Payment of Costs and
Expenses.  The Borrowers agree to pay on demand all
expenses of the Arranger, the Administrative Agent, the Letter of Credit Issuer
and the Collateral Agent (including the reasonable fees and out-of-pocket
expenses of counsel to the Arranger, the Administrative Agent, the Letter of
Credit Issuer and the Collateral Agent and of local counsel, if any, who may be
retained by counsel to the Administrative Agent, the Letter of Credit Issuer
and the Collateral Agent) in connection with


 


(a)           the negotiation, preparation,
execution and delivery of this Agreement and of each other Transaction
Document, including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to this Agreement or any other
Transaction Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, and


 


(b)           the filing, recording, refiling or
rerecording of the Mortgages, the Pledge Agreements and the Security Agreements
and/or any Uniform Commercial Code financing statements relating thereto and
all amendments, supplements and modifications to any thereof and any and all
other documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof or of any Mortgage, any
Pledge Agreement, any Security Agreement or other Security Documents, and


 


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(c)           the preparation and review of the
form of any document or instrument relevant to this Agreement or any other
Transaction Document.


 


The Borrowers further agree to pay, and to save the Administrative
Agent and the Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of this
Agreement, the borrowings hereunder, or the issuance of the Notes or any other
Transaction Documents.  The Borrowers
also agree to reimburse the Administrative Agent, the Letter of Credit Issuer,
the Collateral Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses)
incurred by the Administrative Agent, the Letter of Credit Issuer, the
Collateral Agent or such Lender in connection with (x) the negotiation of any
restructuring or “work-out”, whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.


 


SECTION 10.4.  
Indemnification. 
In consideration of the execution and delivery of this Agreement by each
Lender and the extension of the Commitments, each of the Borrowers hereby
jointly and severally indemnifies, exonerates and holds the Administrative
Agent, the Letter of Credit Issuer, the Arranger, the Collateral Agent, and
each Lender and each of their respective officers, directors, employees,
Affiliates and agents (collectively, the “Indemnified Parties”) free and
harmless from and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements (collectively, the “Indemnified Liabilities”), incurred by
the Indemnified Parties or any of them as a result of, or arising out of, or
relating to


 


(a)           any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Credit Extension;


 


(b)           the entering into and performance of
this Agreement and any other Transaction Document by any of the Indemnified
Parties (including any action brought by or on behalf of the Borrowers as the
result of any determination by the Majority Lenders pursuant to Article V
not to fund any Borrowing);


 


(c)           any investigation, litigation or
proceeding related to any acquisition or proposed acquisition by any Borrower
or any of their respective Subsidiaries or any other Loan Party of all or any
portion of the stock or assets of any Person, whether or not the Administrative
Agent, the Letter of Credit Issuer, the Collateral Agent or such Lender is
party thereto;


 


(d)           any investigation, litigation or
proceeding related to any environmental cleanup, audit, compliance or other
matter relating to the protection of the environment or the Release by any
Borrower or any of their respective Subsidiaries of any Hazardous Material; or


 


(e)           the presence on or under, or the
escape, seepage, leakage, spillage, discharge, emission, discharging or
releases from, any property owned or operated by any Borrower or any Subsidiary
or any other Loan Party thereof of any Hazardous Material


 


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(including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, any Borrower or such
Subsidiary or such Loan Party,


 


except for any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified Party’s
gross negligence or wilful misconduct. 
If and to the extent that the foregoing undertaking may be unenforceable
for any reason, each Borrower hereby jointly and severally agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  To the fullest extent permitted by applicable
law, none of the Borrowers shall assert, and each of the Borrowers hereby
waives, any claim against any Indemnified Party, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof.


 


SECTION 10.5.  
Survival. 
The obligations of the Borrowers under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and
the obligations of the Lenders under Section 9.1, shall in each case
survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments.  The representations and warranties made by
each Borrower in this Agreement and in each other Loan Document shall survive
the execution and delivery of this Agreement and each such other Loan Document.


 


SECTION 10.6.  
Severability. 
Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or such Loan Document or affecting the validity or enforceability of
such provision in any other jurisdiction.


 


SECTION 10.7.  
Headings. 
The various headings of this Agreement and of each other Loan Document
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or any provisions
hereof or thereof.


 


SECTION 10.8.  
Execution in
Counterparts, Effectiveness, etc.  This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be executed by the Borrowers and the Administrative Agent and be
deemed to be an original and all of which shall constitute together but one and
the same agreement.  This Agreement shall
become effective when counterparts hereof executed on behalf of the
Administrative Agent, the Letter of Credit Issuer, the Collateral Agent and each
Borrower and Lender Addendum Agreements executed on behalf of Lenders having
Commitments aggregating to the Term Loan Commitment Amount and the Revolving
Commitment Amount (or notice thereof satisfactory to the Administrative Agent)
shall have been received by the Administrative Agent and notice thereof shall
have been given by the Administrative Agent to the Letter of Credit Issuer, the
Collateral Agent, the Borrowers and each Lender.


 


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SECTION 10.9.  
Governing Law; Entire
Agreement.  THIS AGREEMENT, THE NOTES AND EACH OTHER TRANSACTION DOCUMENT SHALL
EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).  This Agreement, the Notes and the other
Transaction Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.


 


SECTION 10.10.  
Successors and Assigns. 
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however,
that:


 


(a)           No Borrower may assign or transfer
its rights or obligations hereunder without the prior written consent of the
Administrative Agent, the Letter of Credit Agent and all Lenders; and


 


(b)           the rights of sale, assignment and
transfer of the Lenders are subject to Section 10.11.


 


SECTION 10.11.  
Sale and Transfer of
Loans and Notes; Participations in Loans and Notes. 
Each Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section 10.11.


 


SECTION 10.11.1.  
Assignments. 
Any Lender,


 


(a)           with the written consents of the
Administrative Agent and (in the case of an assignment of any portion of the
Revolving Commitment) the Letter of Credit Issuer, and, as long as no Default
or Event of Default shall have occurred and be continuing, with the consent of
the Borrowers (which consents shall not be unreasonably delayed or withheld and
which consent, in the case of the Borrowers, shall be deemed to have been given
in the absence of a written notice delivered by the Borrowers to the
Administrative Agent, on or before the fifth Business Day after receipt by the
Borrowers of such Lender’s request for consent, stating, in reasonable detail,
the reasons why the Borrowers propose to withhold such consent) may at any time
assign and delegate to one or more Eligible Assignee, and


 


(b)           with notice to the Borrowers, the
Letter of Credit Issuer and the Administrative Agent, but without the consent
of the Borrowers, the Letter of Credit Issuer or the Administrative Agent, may
assign and delegate to any of its Affiliates or to any other Lender, any
Affiliate of a Lender, or to any Affiliated Fund


 


(each Person described in either of the foregoing clauses as being the
Person to whom such assignment and delegation is to be made, being hereinafter
referred to as an “Assignee
Lender”), all or any fraction of such Lender’s total Loans
and Commitments (which assignment and delegation need not be of a constant
percentage of all the assigning Lender’s Term Loans and


 


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Term Commitments, in the case of an assignment by a Term Lender and
will be of a constant, and not a varying, percentage of all of the assigning
Lender’s Revolving Loans, and Revolving Commitments, in the case of an
assignment by a Revolver Lender, it being understood that if a Lender is both a
Revolver Lender and a Term Lender it is not obligated to assign constant
percentages in both Commitments and both Loans) and in the case of an
assignment to a Person that is not an existing Lender, in a minimum aggregate
amount of $1,000,000; provided,
however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in Section
4.6(c) and further, provided, however, that, each Borrower, the
Letter of Credit Issuer, and the Administrative Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until


 


(c)           written notice of such assignment and
delegation, together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have been given to such
Borrower, the Letter of Credit Issuer, and the Administrative Agent by such
Lender and such Assignee Lender,


 


(d)           such Assignee Lender shall have
executed and delivered to such Borrower, the Letter of Credit Issuer and the
Administrative Agent a Lender Assignment Agreement, accepted by the
Administrative Agent, and (in the case of an assignment of any portion of the
Resolving Commitment) the Letter of Credit Issuer, and


 


(e)           the processing fees described below
shall have been paid.


 


From and after the date that the Administrative Agent and, if
applicable, the Letter of Credit Issuer, accept such Lender Assignment
Agreement and the Administrative Agent records such transfer in the Register,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have
been assigned and delegated to such Assignee Lender in connection with such
Lender Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan
Documents.  Within five Business Days
after its receipt of notice that the Administrative Agent has received an
executed Lender Assignment Agreement, the Borrowers shall, if requested,
execute and deliver to the Administrative Agent (for delivery to the relevant
Assignee Lender) new Notes evidencing such Assignee Lender’s assigned Loans and
Commitments and, if the assignor Lender has retained Loans and Commitments
hereunder, replacement Notes in the principal amount of the Loans and
Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes, if any, then held by such
assignor Lender).  Each such Note shall
be dated as of the Closing Date.  If the
assignor or Lender had requested and been provided with Notes, the assignor Lender
shall mark the predecessor Notes “exchanged” and deliver them to the relevant
Borrower.  Accrued interest on that part
of the Loans so assigned, and accrued fees on the assigned Commitments, shall
be paid as provided in the Lender Assignment Agreement.  Accrued interest on that part of the Loans
not so assigned and accrued fees on the Commitments not so assigned shall be
paid to the assignor Lender.  Accrued
interest and accrued fees shall be


 


91





















 


paid at the same time or times provided in this Agreement.  Such assignor Lender or such Assignee Lender
must also pay a processing fee to and for the account of the Administrative
Agent upon delivery of any Lender Assignment Agreement in the amount of $3,500
(except, in the case of an assignment to an Affiliate of the assigning Lender,
the processing and recordation fee shall be $1,000).  Any attempted assignment and delegation not
made in accordance with this Section 10.11.1 shall be null and
void.


 


SECTION 10.11.2.  
Participations. 
Any Lender may at any time sell to one or more commercial banks or other
Persons (each of such commercial banks and other Persons being herein called a “Participant”)
participating interests in any of the Loans, Commitments, or other interests of
such Lender hereunder; provided,
however,
that


 


(a)           no participation contemplated in this
Section 10.11
shall relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document,


 


(b)           such Lender shall remain solely
responsible for the performance of its Commitments and such other obligations,


 


(c)           each Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement and each of the
other Loan Documents,


 


(d)           no Participant, unless such
Participant is an Affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that such Lender may agree
with any Participant that such Lender will not, without such Participant’s
consent, take any actions of the type described in clause (b) or (c) of Section 10.1,
and


 


(e)           the
Borrowers shall not be required to pay any amount under Section 4.6
that is greater than the amount which it would have been required to pay had no
participating interest been sold.


 


Each Borrower acknowledges and agrees that each Participant, for
purposes of Sections
4.3, 4.4,
4.5,
4.6,
4.8,
4.9,
10.3
and 10.4,
shall be considered a Lender.


 


Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation (i) any pledge or assignment to secure
obligations to a Federal Reserve Bank or (ii) any Lender that is a fund that
invests in bank loans may pledge all or any portion of its rights (but not its
obligations to make Loans or Letter of Credit Loans) hereunder to any trustee
or any other representative of holders of obligations owed or securities issued
by such Lender as security for such obligations or securities, in either case
without notice to or consent of the Borrowers, the Letter of Credit Issuer or
the Administrative Agent; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


92





















 


SECTION 10.12.  
Confidentiality. 
The Lenders shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with their
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors in connection with this Agreement or as reasonably
required by any bona
fide
transferee, participant or assignee or any bona  fide prospective transferee,
participant or assignee as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided, however, that


 


(a)           unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrowers of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information;


 


(b)           prior to any such disclosure pursuant
to this Section 10.12,
each Lender shall require any such bona  fide transferee, participant and
assignee receiving a disclosure of non-public information to agree in writing


 


(i)            to be bound by this Section 10.12;
and


 


(ii)           to require such Person to require any
other Person to whom such Person discloses such non-public information to be
similarly bound by this Section 10.12; and


 


(c)           except as may be required by an order
of a court of competent jurisdiction and to the extent set forth therein, no
Lender shall be obligated or required to return any materials furnished by any
Borrower or any Subsidiary.


 


SECTION 10.13.  
Other Transactions. 
Nothing contained herein shall preclude the Administrative Agent, the
Letter of Credit Issuer, the Arranger, the Collateral Agent or any other Lender
from engaging in any transaction, in addition to those contemplated by this
Agreement or any other Transaction Document, with any Loan Party, Hess or any
of their respective Affiliates in which such Loan Party, Hess or such Affiliate
is not restricted hereby from engaging with any other Person.


 


SECTION 10.14.  
Forum Selection and
Consent to Jurisdiction.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT,
THE LETTER OF CREDIT ISSUER, THE COLLATERAL AGENT, THE LENDERS, THE ARRANGER OR
THE BORROWERS SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT


 


93





















 


AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT’S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY
BE FOUND.  EACH BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.  EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.  EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT ANY BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
THEIR OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.


 


SECTION 10.15.   Waiver of Jury Trial.  THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT, THE LETTER OF CREDIT ISSUER, THE LENDERS AND THE
BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT, THE LETTER OF CREDIT ISSUER, THE LENDERS OR THE
BORROWERS.  EACH OF THE BORROWERS
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LETTER OF CREDIT ISSUER AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.


 


94





















 


SECTION 10.16.  
Joint and Several
Obligations.


 


(a)           It is understood by the parties
hereto, and the Borrowers hereby acknowledge and affirm, that all of the
Obligations of the Borrowers hereunder and under the other Transaction
Documents (including, without limitation, all of the obligations of the
Borrowers under and in connection with each of the Letters of Credit and each
of the applications and confirmations therefor made by any Borrower to the
Letter of Credit Issuer, and all of the obligations of the Borrowers under the
Notes) shall be joint and several; provided, however, that Chemical Pioneer, and
its wholly-owned Subsidiaries, shall not be jointly and severally liable as a
Borrower for any Obligations in an amount in excess of $2,500,000, in the
aggregate, incurred by any Borrowers with respect to (i) any Initial Draw Term
Loans or (ii) any other Loans or Letters of Credit outstanding as of the
Closing Date, but shall be jointly and severally liable as Borrower for all
other Obligations.  Except as expressly
set forth in Article
8, each Borrower waives presentation to, demand of payment
from and protest to the Lenders of any of the obligations and liabilities of
the other Borrowers hereunder and also waives notice of protest for nonpayment
and notice of acceleration and notice of intent to accelerate, and all other
notices of any kind.  Except as expressly
set forth in Article
8, each Borrower waives notice of any default by the other
Borrowers hereunder.  The obligations and
liabilities of each Borrower hereunder shall not be affected by (i) the failure
of any Lender, the Administrative Agent, the Letter of Credit Issuer or the
Collateral Agent to assert any claim or demand or to enforce any right or remedy
against the other Borrowers or any other Person under this Agreement or any
other Transaction Document; (ii) any extension or renewal of any thereof; (iii)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Agreement or any other Transaction Document; (iv) the
release of any obligation or liability of the other Borrowers by any Lender,
the Administrative Agent, the Letter of Credit Issuer or the Collateral Agent;
(v) the failure of any Lender to exercise any right or remedy against any
Borrower; (vi) any change in the ownership of any of the Borrowers; or (vii)
any winding up, reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to any of the Borrowers, any Lender, the Letter
of Credit Issuer, the Collateral Agent or the Administrative Agent.


 


(b)           If and to the extent that any of the
Borrowers shall fail to make any payment with respect to any of the obligations
hereunder as and when due or to perform any of such obligations in accordance
with the terms thereof, then in each such event, the other Borrowers will make
such payment with respect to, or perform, such obligation.


 


(c)           The obligations of each Borrower
under the provisions of this Section 10.16 constitute full recourse
obligations of such Borrowers, enforceable in accordance with the terms of this
Agreement.


 


(d)           The provisions of this Section 10.16
are made for the benefit of the Lenders, the Administrative Agent, the
Collateral Agent and the Letter of Credit Issuer and their successors and
assigns, and may be enforced by the Administrative Agent, the Collateral Agent,
the Letter of Credit Issuer and the Lenders from time to time against


 


95





















 


any of the Borrowers as often as occasion therefor may
arise and without requirement on the part of the Lenders first to marshal any
of their claims or to exercise any of their rights against the other Borrowers
or to exhaust any remedies available to them against the other Borrowers or to
resort to any other source or means of obtaining payment of all or any part of
the obligations hereunder or to elect any other remedy.  The provisions of this Section 10.16
shall remain in effect until all of the obligations hereunder shall have been
paid in full or otherwise fully satisfied and all of the Commitments and
Letters of Credit shall have terminated or expired.  If at any time, any payment, or any part
thereof, made in respect of all or any part of the Obligations hereunder, is
rescinded or must otherwise be restored or returned by any of the Lenders upon
the insolvency, bankruptcy or reorganization of a Borrower, or otherwise, the
provisions of this Section
10.16 will forthwith be reinstated in effect, as though such
payment had not been made.


 


(e)           Any action by one Borrower under this
Agreement or any of the other Loan Documents shall conclusively bind all of the
other Borrowers; provided,
however,
that Chemical Pioneer, and its wholly-owned Subsidiaries, shall not be bound as
a Borrower with respect to any Obligations in an amount in excess of
$2,500,000, in the aggregate, incurred by any Borrower with respect to (i) any
Initial Draw Term Loans or (ii) any other Loans or Letters of Credit
outstanding as of the Closing Date, but shall be so bound as to all other
Obligations.


 


SECTION 10.17.  
Delivery of Lender
Addenda.  Each Person which becomes a Lender hereunder
on the date hereof shall become a party to this Agreement by delivering to the
Administrative Agent, a Lender Addendum Agreement duly executed by such Person,
the Borrowers and the Administrative Agent.


 


SECTION 10.18.   Assumption, Renewal and
Continuation of Existing Indebtedness. 
Upon the effectiveness of this Agreement, all of the Existing
Indebtedness outstanding on such date shall hereby be restructured, rearranged,
renewed, extended and continued as provided in this Agreement and all Loans
outstanding under the Existing Credit Facility shall become Loans outstanding
hereunder and governed by this Agreement; provided, however, that with respect to Loans
outstanding under the Existing Credit Facility as of the Closing Date, Chemical
Pioneer, and its Subsidiaries, shall only be liable as a Borrower with respect
to $2,500,000 of such outstanding Loans. 
Each of the New Borrowers hereby expressly assumes and agrees to duly
and timely pay, perform and discharge all liabilities and obligations
(collectively, the “Assumed Obligations”) of the Borrowers under the Existing
Credit Facility and hereunder and agrees to be obligated with respect to all
such Assumed Obligations as if such New Borrower had been a Borrower (as
defined therein) under the Existing Credit Facility.  In connection herewith, the Existing Lenders
have sold, assigned, transferred and conveyed, and Lenders party to this
Agreement have purchased and accepted, and hereby purchase and accept, so much
of the Existing Indebtedness such that each Lender’s percentage of the loans
and obligations outstanding pursuant to the Existing Credit Facility, as
restructured, rearranged, renewed, extended and continued pursuant to this
Agreement, shall be equal to such Lender’s Percentage of the Commitments upon
the effectiveness of this Agreement.  The
Lenders acknowledge and agree that the assignment, transfer and conveyance of
the Existing Indebtedness is without recourse to the Existing Lenders and
without any warranties whatsoever by the Collateral Agent,


 


96





















 


the Administrative Agent, the Letter of Credit Issuer or any Existing
Lender as to title, enforceability, collectibility, documentation or freedom
from liens or encumbrances, in whole or in part, other than the warranty of
each Existing Lender that it has not previously sold, transferred, conveyed or
encumbered such interests.  Following the
effectiveness of this Agreement, the Administration Agent shall request that
each Existing Lender return any and all promissory notes issued by the Existing
Borrowers in connection with the Existing Credit Facility.  All such notes received by the Administration
Agent shall be marked “Restructured, Rearranged, Renewed, Extended and
Continued” and returned to the Existing Borrowers.


 


SECTION 10.19.  
Releases with Respect to
Exiting Borrowers.  Upon the effectiveness of this
Agreement, the Administrative Agent, the Collateral Agent, the Letter of Credit
Issuer and the other Lenders hereby release and terminate, without recourse,
representation or warranty of any kind, all Liens, security interests, pledges,
claims or encumbrances granted by each of the Exiting Borrowers pursuant to
each Loan Document (as defined in the Existing Credit Facility) executed and
delivered prior to the Effective Date by such Exiting Borrower under the
Existing Credit Facility (the “Terminated Security Documents”).  The Administrative Agent, Collateral Agent,
Letter of Credit Issuer and the Lenders will, at the Borrowers’ cost and
expense, take all such further actions as any Exiting Borrower may reasonably
request to cancel and terminate such Terminated Security Documents, and
terminate any financing statements executed in connection therewith that relate
to such Terminated Security Documents, and will take all such further actions
as may reasonably be requested by the Exiting Borrowers to evidence or give
effect to the release and termination of such Terminated Security
Documents.  Each Exiting Borrower shall
hereafter cease to be (a) a “Grantor” or “Pledgor” under any Terminated
Security Document and (b) a “Borrower” under any other Loan Document (as
defined in the Existing Credit Facility) executed and delivered prior to the
Effective Date.


 


97





















 


IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.


 


	
   

  	
  U.S. SHIPPING
  PARTNERS L.P., as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  US Shipping General Partner LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-1





















 


	
   

  	
  U.S. SHIPPING
  OPERATING LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-2





















 


	
   

  	
  ITB BALTIMORE
  LLC, as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-3





















 


	
   

  	
  ITB GROTON LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-4





















 


	
   

  	
  ITB JACKSONVILLE
  LLC, as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-5





















 


	
   

  	
  ITB MOBILE LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-6





















 


	
   

  	
  ITB NEW YORK LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-7





















 


	
   

  	
  ITB PHILADELPHIA
  LLC, as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-8





















 


	
   

  	
  USS CHARTERING
  LLC, as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-9





















 


	
   

  	
  USCS CHEMICAL
  CHARTERING LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-10





















 


	
   

  	
  USCS CHEMICAL
  PIONEER LLC,
  as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-11





















 


	
   

  	
  USCS CHARLESTON
  CHARTERING LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-12





















 


	
   

  	
  USCS CHARLESTON
  LLC, as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No.

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-13





















 


	
   

  	
  USCS ATB LLC, as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Gridley

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  732-635-1940

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Paul Gridley

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Telephone:

  	
  212-318-3000

  
	
   

  	
  Facsimile No. 

  	
  212-318-3400

  
	
   

  	
  Attention:

  	
  Paul Jacobs

  
	
   

  	
   

  	
  Roy L. Goldman

  



 


S-14





















 


	
   

  	
  CANADIAN
  IMPERIAL BANK OF COMMERCE, as Administrative Agent and Letter of Credit
  Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Koslo,
  Jr.

  
	
   

  	
   

  	
  Name:

  	
  William J. Koslo, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  



 


S-15





















 


	
   

  	
  KEYBANK NATIONAL
  ASSOCIATION, as Collateral Agent and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Rajan

  
	
   

  	
   

  	
  Name:

  	
  Thomas Rajan

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Preston Commons West Tower

  
	
   

  	
   

  	
  8117 Preston Road, Suite 440

  
	
   

  	
   

  	
  Dallas, Texas 
  75225

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  214-414-2580

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  214-414-2651

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Thomas Rajan

  
	
   

  	
   

  	
   

  



 


S-16





















 


	
   

  	
  CITIBANK, N.A., as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles R.
  Delamater

  
	
   

  	
   

  	
  Name:

  	
  Charles R. Delamater

  
	
   

  	
   

  	
  Title:

  	
  Managing Director,

  
	
   

  	
   

  	
   

  	
  Senior Credit Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  388 Greenwich St., 23rd Floor

  
	
   

  	
   

  	
  New York, NY 10013

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  212-816-5429

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Charles R. Delamater

  
	
   

  	
   

  	
   

  



 


S-17





















 


	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC., as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank P. Turner

  
	
   

  	
   

  	
  Name:

  	
  Frank P. Turner

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  745 7th Avenue, 7th Floor

  
	
   

  	
   

  	
  New York, NY 
  10019

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  646-758-1986

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Loan Portfolio Group

  
	
   

  	
   

  	
   

  



 


S-18





















 


	
   

  	
  LASALLE BANK NATIONAL
  ASSOCIATION,
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen L. Ross

  
	
   

  	
   

  	
  Name:

  	
  Kathleen L. Ross

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  



 


S-19





















 


	
   

  	
  CIBC INC., as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Koslo,
  Jr.

  
	
   

  	
   

  	
  Name:

  	
  William J. Koslo, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  



 


S-20





















 


SCHEDULE I


 


DISCLOSURE SCHEDULE


 


ITEM 2.1.4             Existing
Letters of Credit


 




	
  Beneficiary

  	
   

  	
  Expiration Date

  	
   

  	
  Amount

  	
   

  
	
  SENESCO

  	
   

  	
  4/13/09

  	
   

  	
  $966,006.41

  	
   

  






 


ITEM 6.3                Governmental
Approval, Regulation, etc.


 


Assignment of Mortgages (as defined in the Existing
Credit Facility) on Vessels from National City Bank, as collateral agent under
the Existing Credit Facility, as trustee, to Collateral Agent, as trustee, must
be filed and recorded.  Mortgages for the
M/V Charleston, S.S. Chemical Pioneer and Vessels owned by the Original Owners
must be filed and recorded.  UCC-1s and
UCC-3s must be filed.  Documentation must
be filed with the U.S. Coast Guard reflecting the change in ownership of the
Original Owners, Chemical Pioneer and Charleston.  Various filings will be required to effect
the transactions contemplated by the Contribution Agreement.


 


ITEM 6.6                Material
Adverse Effect


 


None.


 


ITEM 6.7                Litigation


 


None.


 


ITEM 6.8                Existing
Subsidiaries


 


A.            U.S. Shipping
Partners L.P.




	
  Name of

  Subsidiary

  	
   

  	
  State of Formation/

  Incorporation

  	
   

  	
  Ownership %

  	
   

  	
  Business

  Description

  	
   

  
	
  U.S. Shipping Operating LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Subsidiaries
  listed under Part B

  	
   

  



 


Schedule I-1





















 


B.            U.S. Shipping
Operating LLC




	
  Name of

  Subsidiary

  	
   

  	
  State of Formation/

  Incorporation

  	
   

  	
  Ownership %

  	
   

  	
  Business

  Description

  	
   

  
	
  USS Chartering LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Charterer and operator of
  Vessels

  	
   

  
	
  USCS Charleston Chartering LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Charterer and operator of
  Vessels

  	
   

  
	
  USCS Chemical Pioneer LLC*

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of S.S. Chemical
  Pioneer

  	
   

  
	
  USCS ATB LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of ATB following the
  completion of its construction

  	
   

  











*              Will convert to a
corporation following closing.


 


USS Chartering LLC and USCS Charleston Chartering LLC may merge
following the Closing Date.


 


C.            USS Chartering LLC


 


	
  Name of

  Subsidiary

  	
   

  	
  State of Formation/

  Incorporation

  	
   

  	
  Ownership %

  	
   

  	
  Business

  Description

  	
   

  
	
  ITB Baltimore LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Baltimore

  	
   

  
	
  ITB Groton LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Groton

  	
   

  
	
  ITB Jacksonville LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Jacksonville

  	
   

  
	
  ITB Mobile LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Mobile

  	
   

  
	
  ITB New York LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of New York

  	
   

  
	
  ITB Philadelphia LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of Philadelphia

  	
   

  



 


D.            USCS Charleston
Chartering LLC


 


	
  Name of

  Subsidiary

  	
   

  	
  State of Formation/

  Incorporation

  	
   

  	
  Ownership %

  	
   

  	
  Business

  Description

  	
   

  
	
  USCS Charleston LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Owner of M/V Charleston

  	
   

  



 


Schedule I-2





















 


E.             USCS Chemical
Pioneer LLC*




	
  Name of

  Subsidiary

  	
   

  	
  State of Formation/

  Incorporation

  	
   

  	
  Ownership %

  	
   

  	
  Business

  Description

  	
   

  
	
  USCS Chemical Chartering LLC

  	
   

  	
  Delaware

  	
   

  	
  100%

  	
   

  	
  Charterer and operator of
  Vessel

  	
   

  











*              Will convert to a
corporation following closing.


 


ITEM 6.11              Employee
Benefit Plans


 


None.


 


ITEM 6.12              Environmental
Matters


 


None.


 


ITEM 6.17              Contractual
Default


 


None.


 


ITEM 6.18              Labor
Relations


 


None.


 


ITEM 7.2.2(b)        Ongoing
Indebtedness


 


None.


 


ITEM 7.2.5(a)        Ongoing
Investments


 


Construction of the ATB pursuant to the ATB
Construction Contract.


 


Schedule I-3





















 


SCHEDULE II


 


DESCRIPTION OF VESSELS


 


	
  Name of

  Vessel

  	
   

  	
  Official

  Number

  	
   

  	
  Port of Registry

  	
   

  	
  Primary Service

  	
   

  	
  Endorsements

  	
   

  
	
  Baltimore

  	
   

  	
  654191

  	
   

  	
  Wilmington, DE

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Baltimore

  	
   

  	
  654194

  	
   

  	
  Wilmington, DE

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Charleston

  	
   

  	
  658493

  	
   

  	
  Wilmington, DE

  	
   

  	
  Tank Ship

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Chemical Pioneer

  	
   

  	
  661060

  	
   

  	
  New York, NY

  	
   

  	
  Tank Ship

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Groton

  	
   

  	
  647320

  	
   

  	
  Wilmington, DE

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Groton

  	
   

  	
  632268

  	
   

  	
  Wilmington, DE

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Jacksonville

  	
   

  	
  631787

  	
   

  	
  Wilmington, DE

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Jacksonville

  	
   

  	
  631788

  	
   

  	
  Philadelphia, PA

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Mobile

  	
   

  	
  654193

  	
   

  	
  New York, NY

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Mobile

  	
   

  	
  654196

  	
   

  	
  New York, NY

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  New York

  	
   

  	
  648935

  	
   

  	
  Wilmington, DE

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  New York

  	
   

  	
  648934

  	
   

  	
  Wilmington, DE

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Philadelphia

  	
   

  	
  654192

  	
   

  	
  Wilmington, DE

  	
   

  	
  Towing Vessel

  	
   

  	
  Coastwise & Registry

  	
   

  
	
  Philadelphia

  	
   

  	
  654195

  	
   

  	
  New York, NY

  	
   

  	
  Tank Barge

  	
   

  	
  Coastwise & Registry

  	
   

  



 


Schedule II-1





















 


EXHIBIT A


 


FORM OF REVOLVING NOTE


 




	
  $              

  	
  November 3, 2004

  






 


FOR VALUE RECEIVED, the undersigned, U.S. Shipping
Partners L.P., a Delaware limited partnership, U.S. Shipping Operating LLC, ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New
York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering
LLC, USCS Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS Charleston
LLC, and USCS ATB LLC, each a Delaware limited liability company (the “Borrowers”),
jointly and severally promise to pay to the order of [REVOLVING LENDER FULL NAME ALL CAPS], a                    
(the “Revolving
Lender”), on November 2, 2009 the principal sum of                   
DOLLARS ($           )
or, if less, the aggregate unpaid principal amount of all Revolving Loans shown
on the schedule attached hereto (and any continuation thereof) made by the
Revolving Lender pursuant to that certain Second Amended and Restated Credit
Agreement, dated as of November 3, 2004 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the “Credit Agreement”),
among U.S. Shipping Partners L.P., a Delaware limited partnership, U.S.
Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville
LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering
LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston
Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a Delaware limited
liability company, the various financial institutions as are or may become
parties thereto (collectively, the “Lenders”), Canadian Imperial Bank of
Commerce (“CIBC”),
as letter of credit issuer, CIBC, as administrative agent for the Lenders (in
such capacity together with its successors in such capacity, the “Administrative
Agent”), and KeyBank National Association, as collateral agent for the Secured Parties (as
defined in the Credit Agreement).


 


The Borrowers also jointly and severally promise to
pay interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the rates per annum and on the
dates specified in the Credit Agreement.


 


Payments of both principal and interest are to be made
in lawful money of the United States of America in same day or immediately
available funds to the account designated by the Administrative Agent pursuant
to the Credit Agreement.


 


This Revolving Note is a replacement of (but not an
extinguishment or novation of), those certain Revolving Notes, dated April 13,
2004, executed by United States Shipping Master LLC, United States Shipping
LLC, United States Chemical Shipping LLC, ITB Baltimore LLC, ITB Groton LLC, ITB
Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS
Chartering LLC, USS Transport LLC, USCS Chemical Chartering LLC, USCS Chemical
Transport LLC, USCS Chemical Pioneer LLC, and USCS Charleston LLC, and USS
Vessel Management Inc., in the principal amount of $5,000,000 each and payable
to the order of CIBC Inc., National City Bank, and PB Capital Corporation and
in the principal amount of $10,000,000 and payable to the order of LaSalle Bank
National Association (collectively, the “Prior Notes”), and the indebtedness
evidenced hereby and thereby is a continuing indebtedness, except as provided
in Section 10.18 of the Credit Agreement with respect to the undersigned


 





















 


USCS Chemical Pioneer LLC and USCS Chemical Chartering LLC, and nothing
herein contained or implied shall be construed to deem such indebtedness or any
accrued and unpaid interest thereon paid, satisfied, novated or
terminated.  All liens and security
interests that exist to secure the indebtedness evidenced by the Prior Notes,
other than any expressly released concurrently with the execution of the Credit
Agreement, shall continue in full force and effect to secure the indebtedness
as evidenced by this Revolving Note.


 


This Revolving Note is one of the Revolving Notes referred
to in, and evidences Indebtedness incurred under, the Credit Agreement, to
which reference is made for a description of the security for this Revolving
Note and for a statement of the terms and conditions on which the Borrowers are
permitted and required to make prepayments and repayments of principal of the
Indebtedness evidenced by this Revolving Note and on which such Indebtedness
may be declared to be immediately due and payable.  Unless otherwise defined, terms used herein
have the meanings provided in the Credit Agreement.


 


All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.


 


THIS REVOLVING NOTE HAS BEEN DELIVERED IN THE CITY OF
NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS
OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION).


 


	
   

  	
  U.S. Shipping
  Partners L.P., a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By: US Shipping General Partner LLC, its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2





















 


	
   

  	
  U.S. Shipping
  Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB
  Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS
  Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston
  Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a Delaware
  limited liability company, jointly and severally

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


3





















 


REVOLVING LOANS AND PRINCIPAL
PAYMENTS


 


	
   

  	
   

  	
  Amount
  of

  Revolving
  Loan

  Made

  	
   

  	
   

  	
   

  	
  Amount
  of

  Principal
  Repaid

  	
   

  	
  Unpaid
  Principal

  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Alternate

  Base

  Rate

  	
   

  	
  LIBO
  Rate

  	
   

  	
  Interest

  Period
  (if

  applicable)

  	
   

  	
  Alternate

  Base
  Rate

  	
   

  	
  LIBO

  Rate

  	
   

  	
  Alternate

  Base
  Rate

  	
   

  	
  LIBO

  Rate

  	
   

  	
  Total

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


4





















 


EXHIBIT B


 


FORM OF TERM NOTE


 




	
  $              

  	
  November 3, 2004

  






 


FOR VALUE RECEIVED, the undersigned, U.S. Shipping
Partners L.P., a Delaware limited partnership, U.S. Shipping Operating LLC, ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New
York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering
LLC, USCS Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS Charleston
LLC, and USCS ATB LLC, each a Delaware limited liability company (the “Borrowers”),
jointly and severally promise to pay to the order of [TERM LENDER
FULL NAME ALL CAPS], a                    
(the “Term Lender”), the principal sum of                     
DOLLARS ($            )
or, if less, the aggregate unpaid principal amount of all Term Loans shown on
the schedule attached hereto (and any continuation thereof) made by the Term
Lender pursuant to that certain Second Amended and Restated Credit Agreement,
dated as of November 3, 2004 (together with all amendments and other modifications,
if any, from time to time thereafter made thereto, the “Credit Agreement”),
among U.S. Shipping Partners L.P., a Delaware limited partnership, U.S.
Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville
LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering
LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston
Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a Delaware limited
liability company, the various financial institutions as are or may become
parties thereto (collectively, the “Lenders”), Canadian Imperial Bank of
Commerce (“CIBC”),
as letter of credit issuer, CIBC, as administrative agent for the Lenders (in
such capacity together with its successors in such capacity, the “Administrative
Agent”), and KeyBank National Association, as collateral agent for the Secured Parties (as
defined in the Credit Agreement), payable in installments as set forth in the
Credit Agreement, with a final installment (in the amount necessary to pay in
full this Note) due and payable on April 30, 2010.


 


The Borrowers also jointly and severally promise to
pay interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the rates per annum and on the
dates specified in the Credit Agreement.


 


Payments of both principal and interest are to be made
in lawful money of the United States of America in same day or immediately available
funds to the account designated by the Administrative Agent pursuant to the
Credit Agreement.


 


This Term Note is an extension, renewal, and
replacement of (but not an extinguishment or novation of), and is given in
partial substitution and exchange for, amounts outstanding under those certain
Term Notes, dated April 13, 2004, executed by United States Shipping Master
LLC, United States Shipping LLC, United States Chemical Shipping LLC, ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New
York LLC, ITB Philadelphia LLC, USS Chartering LLC, USS Transport LLC, USCS
Chemical Chartering LLC, USCS Chemical Transport LLC, USCS Chemical Pioneer
LLC, and USCS Charleston LLC, and USS Vessel Management Inc. and payable to the
order of CIBC Inc., PB Capital Corporation, LaSalle Bank National Association,
and National City Bank, in the aggregate principal amount of $202,500,000 (the “Prior Notes”),
and the indebtedness evidenced hereby and thereby is a


 





















 


continuing indebtedness, except as provided in Section 10.18 of the
Credit Agreement with respect to the undersigned USCS Chemical Pioneer LLC and
USCS Chemical Chartering LLC, and nothing herein contained or implied shall be
construed to deem such indebtedness or any accrued and unpaid interest thereon
paid, satisfied, novated or terminated. 
All liens and security interests that exist to secure the indebtedness
evidenced by the Prior Notes, other than any expressly released concurrently
with the execution of the Credit Agreement, shall continue in full force and
effect to secure the indebtedness as evidenced by this Term Note.


 


This Term Note is one of the Term Notes referred to
in, and evidences Indebtedness incurred under, the Credit Agreement, to which
reference is made for a description of the security for this Term Note and for
a statement of the terms and conditions on which the Borrowers are permitted
and required to make prepayments and repayments of principal of the
Indebtedness evidenced by this Term Note and on which such Indebtedness maybe
declared to be immediately due and payable. 
Unless otherwise defined, terms used herein have the meanings provided
in the Credit Agreement.


 


All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.


 


THIS TERM NOTE HAS BEEN DELIVERED IN THE CITY OF NEW
YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF
LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION).


 


	
   

  	
  U.S. Shipping
  Partners L.P., a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: US Shipping General Partner LLC, its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2





















 


	
   

  	
  U.S. Shipping
  Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB
  Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS
  Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston
  Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a Delaware
  limited liability company, jointly and severally

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


3





















 


TERM LOANS AND PRINCIPAL PAYMENTS


 


	
   

  	
   

  	
  Amount
  of Term

  Loan
  Made

  	
   

  	
   

  	
   

  	
  Amount
  of

  Principal
  Repaid

  	
   

  	
  Unpaid
  Principal

  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Alternate

  Base

  Rate

  	
   

  	
  LIBO

  Rate

  	
   

  	
  Interest

  Period
  (if

  applicable)

  	
   

  	
  Alternate

  Base
  Rate

  	
   

  	
  LIBO

  Rate

  	
   

  	
  Alternate

  Base
  Rate

  	
   

  	
  LIBO

  Rate

  	
   

  	
  Total

  	
   

  	
  Notation

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4





















 


EXHIBIT C


 


FORM OF BORROWING REQUEST


 


Canadian Imperial Bank of Commerce, as Administrative Agent

[Address]


 


Attention:                                         [Name]


                                                                                                [Title]


 


U.S.
SHIPPING PARTNERS L.P., a Delaware limited partnership,

U.S. SHIPPING OPERATING LLC, ITB BALTIMORE LLC, 

ITB GROTON LLC, ITB JACKSONVILLE LLC, ITB MOBILE LLC, 

ITB NEW YORK LLC, ITB PHILADELPHIA LLC, 

USS CHARTERING LLC, USCS CHEMICAL CHARTERING LLC, 

USCS CHEMICAL PIONEER LLC, USCS CHARLESTON CHARTERING LLC, 

USCS CHARLESTON LLC, and USCS ATB LLC, 

each a Delaware limited liability company


 


Gentlemen and Ladies:


 


This Borrowing Request is delivered to you pursuant to
Section 2.3.1
of the Second Amended and Restated Credit Agreement, dated as of November 3,
2004 (together with all amendments and other modifications, if any, from time
to time thereafter made thereto, the “Credit Agreement”), among U.S.
Shipping Partners L.P., a Delaware limited partnership, U.S. Shipping Operating
LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC,
ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical
Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS
Charleston LLC, and USCS ATB LLC, each a Delaware limited liability company
(collectively, the “Borrowers”),
the various financial institutions as are or may become parties thereto
(collectively, the “Lenders”),
Canadian Imperial Bank of Commerce (“CIBC”), as letter of credit issuer,
CIBC, as administrative agent for the Lenders (in such capacity together with
its successors in such capacity, the “Administrative Agent”), and
KeyBank National Association,
as collateral agent for the Secured Parties (as defined in the Credit
Agreement).  Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.


 


The Borrowers hereby request that a [Revolving Loan]
[Term Loan] be made in the aggregate principal amount of $          
on           , 20   
as a [LIBO Rate Loan having an Interest Period of        
months] [Base Rate Loan].


 


The Borrowers hereby acknowledge that, pursuant to Section 5.2.2
of the Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitute a representation and warranty by the Borrowers that, on the date of
such Loans, and before and after giving effect thereto and to the application
of the proceeds therefrom, all statements set forth in Section 5.2.1
of the Credit Agreement are true and correct.


 


The Borrowers agree that if prior to the time of the
Borrowing requested hereby any matter certified to herein by it will not be
true and correct at such time as if then made, it will


 





















 


immediately so notify the Administrative Agent.  Except to the extent, if any, that prior to
the time of the Borrowing requested hereby the Administrative Agent shall
receive written notice to the contrary from the Borrowers, each matter
certified to herein shall be deemed once again to be certified as true and correct
at the date of such Borrowing as if then made.


 


2





















 


Please wire transfer the proceeds of the Borrowing to
the accounts of the following Persons at the financial institutions indicated
respectively:


 


	
  Amount to be

  	
   

  	
  Person to be Paid

  	
   

  	
  Name, Address, etc.

  	
   

  
	
  Transferred

  	
   

  	
  Name

  	
   

  	
  Account No.

  	
   

  	
  of Transferee Lender

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balance of such proceeds

  	
   

  	
  The Borrower

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
   

  



 


The Borrowers have caused this Borrowing Request to be
executed and delivered, and the certification and warranties contained herein
to be made, by its duly Authorized Officer this     day of            ,
20   .


 


	
   

  	
  [U.S. SHIPPING
  PARTNERS L.P., a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: US Shipping General Partner LLC, its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:](1)

  	
   

  











(1)                                  Do
not use for Initial Draw Term Loan request for $2,500,000 by USCS Chemical
Pioneer LLC and USCS Chemical Chartering LLC.


 


3





















 


	
   

  	
  U.S. SHIPPING
  OPERATING LLC, ITB BALTIMORE LLC, ITB GROTON LLC, ITB JACKSONVILLE LLC, ITB
  MOBILE LLC, ITB NEW YORK LLC, ITB PHILADELPHIA LLC, USS CHARTERING LLC, USCS
  CHARLESTON CHARTERING LLC, [USCS CHEMICAL PIONEER LLC, USCS CHEMICAL
  CHARTERING LLC,](2) USCS CHARLESTON LLC, and USCS ATB LLC, each a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  











(2)                                  Do not include in Borrowing Request for
Initial Draw Term Loan, exclusive of $2,500,000.  For an Initial Draw Term Loan of $2,500,000,
Borrowing Request to be executed only by USCS Chemical Pioneer LLC and USCS
Chemical Chartering LLC.


 


4





















 


EXHIBIT D


 


FORM OF CONTINUATION/CONVERSION
NOTICE


 


Canadian Imperial Bank of Commerce, as Administrative Agent

[Address]


 


Attention:                                         [Name]


                                                                                                [Title]


 


U.S.
SHIPPING PARTNERS L.P., a Delaware limited partnership,

U.S. SHIPPING OPERATING LLC, ITB BALTIMORE LLC, 

ITB GROTON LLC, ITB JACKSONVILLE LLC, ITB MOBILE LLC, 

ITB NEW YORK LLC, ITB PHILADELPHIA LLC, 

USS CHARTERING LLC, USCS CHEMICAL CHARTERING LLC, USCS CHEMICAL PIONEER LLC,
USCS CHARLESTON CHARTERING LLC, 

USCS CHARLESTON LLC, and USCS ATB LLC, 

each a Delaware limited liability company


 


Gentlemen and Ladies:


 


This Continuation/Conversion Notice is delivered to
you pursuant to Section 2.4 of the Second Amended and Restated Credit
Agreement, dated as of November 3, 2004 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the “Credit Agreement”),
among U.S. Shipping Partners L.P., a Delaware limited partnership, U.S.
Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville
LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering
LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston
Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a Delaware limited
liability company (collectively, the “Borrowers”), the various financial
institutions as are or may become parties thereto (collectively, the “Lenders”),
Canadian Imperial Bank of Commerce (“CIBC”), as letter of credit issuer,
CIBC, as administrative agent for the Lenders (in such capacity together with
its successors in such capacity, the “Administrative Agent”), and
KeyBank National Association,
as collateral agent for the Secured Parties (as defined in the Credit
Agreement).  Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.


 


The Borrowers hereby request that on             ,
20   ,


 


1.             $           
of the presently outstanding principal amount of the [Term Loans] [Revolving
Loans] originally made on           ,
20    [and $          
of the presently outstanding principal amount of the [Term Loans] [Revolving
Loans] originally made on           ,
20   ],


 





















 


2.             which
are presently being maintained as (1)[Base Rate Loans] [LIBO Rate Loans],


 


3.             be
[converted into] [continued as],


 


4.             (2)[LIBO
Rate Loans having an Interest Period of       
months] [Base Rate Loans].










(1)           Select
appropriate interest rate option.


 


(2)           Insert appropriate
interest rate option.


 


The Borrowers hereby:


 


(a)           certify and warrant that no Default
has occurred and is continuing; and


 


(b)           agrees that if prior to the time of
such continuation or conversion any matter certified to herein by it will not
be true and correct at such time as if then made, it will immediately so notify
the Administrative Agent.


 


Except to the extent, if any, that prior to the time of the
continuation or conversion requested hereby the Administrative Agent shall
receive written notice to the contrary from the Borrowers, each matter
certified to herein shall be deemed to be certified at the date of such
continuation or conversion as if then made.


 


The Borrowers have caused this Continuation/Conversion
Notice to be executed and delivered, and the certification and warranties
contained herein to be made, by its Authorized Officer this    
day of          , 20   .


 


	
   

  	
  U.S. SHIPPING
  PARTNERS L.P., a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: US Shipping General Partner LLC, its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2





















 


	
   

  	
  U.S. SHIPPING
  OPERATING LLC, ITB BALTIMORE LLC, ITB GROTON LLC, ITB JACKSONVILLE LLC, ITB
  MOBILE LLC, ITB NEW YORK LLC, ITB PHILADELPHIA LLC, USS CHARTERING LLC, USCS
  CHEMICAL PIONEER LLC, USCS CHARLESTON CHARTERING LLC, USCS CHEMICAL
  CHARTERING LLC, USCS CHARLESTON LLC, and USCS ATB LLC, each a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


3





















 


EXHIBIT E


 


LENDER ASSIGNMENT AND ASSUMPTION
AGREEMENT


 


This Assignment and Assumption Agreement (the “Assignment”)
is dated as of the Effective Date set forth below and is entered into by and
between <Assignor> (the “Assignor”) and <Assignee> (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment as if set forth herein in full.


 


For an agreed consideration, the Assignor hereby
irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated below,
the interest in and to all of the Assignor’s rights and obligations under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto that represents the amount and the percentage interest identified below
of all of the Assignor’s outstanding rights and obligations under the
respective facilities identified below (including, to the extent included in
any such facilities, letters of credit and swingline loans) (the “Assigned
Interest”).  Such sale and assignment
is without recourse to the Assignor and, except as expressly provided in this
Assignment, without representation or warranty by the Assignor.


 


	
  1.

  	
   

  	
  Assignor:

  	
   

  	
  <Assignor>

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
  <Assignee>, an Eligible Assignee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrowers:

  	
   

  	
  U.S. Shipping Partners L.P., a Delaware limited
  partnership, U.S. Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC,
  ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC,
  USS Chartering LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC,
  USCS Charleston Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a
  Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:

  	
   

  	
  Canadian Imperial Bank of Commerce, as the
  administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit Agreement:

  	
   

  	
  The Second Amended and Restated Credit Agreement,
  dated as of November 3, 2004 (together with all amendments and other
  modifications, if any, from time to time thereafter made thereto), among the
  Borrowers, the Lenders parties thereto, the Administrative Agent, and the
  other agent parties thereto.

  



 





















 


6.             Assigned
Interest:


 


	
  Facility Assigned

  	
   

  	
  Aggregate Amount of

  Commitments/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitments/Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitments/Loans

  	
   

  
	
  Revolving Commitment

  	
   

  	
  <$50,000,000>

  	
   

  	
  $<Revolver>

  	
   

  	
  <___>

  	
  %

  
	
  Term Commitment

  	
   

  	
  <$130,000,000>

  	
   

  	
  $<Term>

  	
   

  	
  <Term Perc>

  	
  %

  



 


7.             Effective Date:      _________________, 20____


 


The terms set forth in this Assignment are hereby agreed to:


 


	
   

  	
  ASSIGNEE

  
	
   

  	
  <ASSIGNEE>

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNOR

  
	
   

  	
  <ASSIGNOR>

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and Acknowledged:

  	
   

  
	
   

  	
   

  
	
  CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2





















 


	
  [CANADIAN IMPERIAL BANK OF COMMERCE,

  	
   

  
	
  as Letter of Credit Issuer Agent](1)

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  











(1)           If
Applicable


 


3





















 


	
  U.S. SHIPPING
  OPERATING LLC, ITB
  BALTIMORE LLC, ITB GROTON LLC, ITB JACKSONVILLE LLC, ITB MOBILE LLC, ITB NEW
  YORK LLC, ITB PHILADELPHIA LLC, USS CHARTERING LLC, USCS CHEMICAL CHARTERING
  LLC, USCS CHEMICAL PIONEER LLC, USCS CHARLESTON CHARTERING LLC, USCS
  CHARLESTON LLC, and USCS ATB LLC, as Borrowers(2)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  U.S. SHIPPING PARTNERS L.P., as Borrower(2)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  US Shipping General Partner LLC, its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  











(2)           If required


 


4





















 


ANNEX 1


 


U.S. SHIPPING PARTNERS
L.P.

SECOND AMENDED AND RESTATED CREDIT AGREEMENT


 


STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT


AND ASSUMPTION AGREEMENT


 


1.             Representations
and Warranties.


 


1.1           Assignor.              The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim, and (iii) it has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and to consummate
the transactions contemplated hereby; and (b) assumes no responsibility with
respect to (i) any statements, warranties or representations made in or in
connection with any Credit Document (as defined below), (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document delivered pursuant
thereto, other than this Assignment (herein collectively the “Credit
Documents”), or any collateral thereunder, (iii) the financial condition of
any Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document, or (iv) the performance or
observance by any Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit Document.


 


1.2.          Assignee.              The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement and of the other Credit Documents, including, without
limitation, the Guaranty, the Mortgages, the Pledge Agreement, the Security
Agreements and the Cash Collateral Control Agreement, and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, and (iv)
it has received a copy of the Credit Agreement and the exhibits related
thereto, together with copies of the documents which were required to be
delivered under the Credit Agreement as a condition to the making of the Credit
Extensions thereunder, including, without limitation, the Guaranties, the
Mortgages, the Pledge Agreements, the Cash Collateral Control Agreement, the
Security Agreements and copies of the financial statements delivered pursuant
to Section 5.1.12
thereof, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
to purchase the Assigned Interest on the basis of which it has made such
analysis and decision; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender.


 


Annex 1-1





















 


2.             Payments.              From and after the Effective Date,
the Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.


 


3.             General
Provisions. This Assignment shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.  This Assignment may be executed in any number
of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment.  This Assignment shall be governed by, and
construed in accordance with, the law of the State of New York (without regard
to any conflict of laws principles which would require the application of the
law of any other jurisdiction).


 


Annex 1-2





















 


EXHIBIT G


 


	
   

  



 


FORM OF AMENDED AND RESTATED 

[PREFERRED FLEET MORTGAGE ON THE WHOLE OF THE



[NAME OF TUG ALL CAPS] (TUG)



(OFFICIAL NUMBER ______)



[NAME OF BARGE ALL CAPS] (BARGE)



(OFFICIAL NUMBER ______)](1)



$185,500,000


	
   

  



 


[NAME OF MORTGAGOR ALL CAPS]

c/o U.S. Shipping Partners L.P.

399 Thornall Street

Edison, NJ  08837


 










 


OWNER AND MORTGAGOR



IN FAVOR OF



KEYBANK NATIONAL ASSOCIATION,

in its capacity as Collateral Agent, as Trustee, under

that certain Second Amended and Restated Credit Agreement, 

dated as of November 3, 2004,

Preston Commons West Tower

8117 Preston Road, Ste. 440

Dallas, TX 75225











 


MORTGAGEE


 


	
   

  



 


Dated:  as of November 3, 2004


	
   

  



 










(1)                                  Use for ITB vessels.  For Chemical Pioneer and Charleston, amend to
read “PREFERRED SHIP MORTGAGE ON THE WHOLE OF THE [VESSEL NAME ALL CAPS]
(OFFICIAL NUMBER ______)”.


 





















 


Total Amount and Discharge
Amount:

$185,500,000 Together

With Interest, Expenses, Costs, Premium (if any), Indemnities, Termination
Payments and Other Amounts (including Attorney Fees and Expenses),

Performance of Mortgage and Credit Agreement [and Guaranty](2)
and 

Hedge Agreement Covenants and

Termination Payments under the Hedge Agreements


 










(2)           Use for Mortgage by
Chemical Pioneer LLC.


 





















 


AMENDED
AND RESTATED FIRST PREFERRED [FLEET]  [SHIP]
MORTGAGE


 


THIS AMENDED AND RESTATED FIRST PREFERRED [FLEET] [SHIP] MORTGAGE
(hereinafter called the “Mortgage”), on the whole of each Vessel (as
hereinafter defined), which is dated and effective as of November 3, 2004, is
provided and made by [NAME
OF MORTGAGOR ALL CAPS], a Delaware limited liability company whose
mailing address is c/o U.S. Shipping Partners L.P., 399 Thornall Street,
Edison, NJ 08837 (hereinafter called “Mortgagor”) to KEYBANK NATIONAL
ASSOCIATION, not in its
individual capacity, but solely as collateral agent, as trustee on behalf of
itself, the Administrative Agent (as hereinafter defined), the Lenders (as
hereinafter defined), the Letter of Credit Issuer (as hereinafter defined) and
the Secured Hedge Counterparties (as hereinafter defined), whose mailing
address is Preston Commons West Tower, 8117 Preston Road, Ste. 440, Dallas, TX
75225 (hereinafter called “Mortgagee”). 
Capitalized terms not otherwise defined herein shall have the meanings
set forth for such terms in the Credit Agreement (as hereinafter defined).


 


W I T N E S S E T H:


 


[WHEREAS, Mortgagor, United States Shipping LLC (“USS”),
and each of the other subsidiaries of USS (collectively, the “Original
Borrowers”), have heretofore entered into that certain Credit Agreement
dated as of September 13, 2002 between the Original Borrowers, National
City Bank, as collateral agent and the other parties thereto, to lend funds up
to an aggregate total amount of $140,000,000, as amended and restated by that
Amended and Restated Credit Agreement, dated as of April 13, 2004, to
increase the loan of funds up to an aggregate total amount of $317,500,000, as
amended by that First Amendment to Amended and Restated Credit Agreement, dated
as of August 5, 2004 (as so amended, the “Existing Credit Facility”),
by and among United States Shipping Master LLC (“Shipping
Master”), Original Borrowers, and each of the other subsidiaries
of Shipping Master (collectively, the “Existing Borrowers”), the
commercial lending institutions parties thereto (the “Existing
Lenders”), Canadian Imperial Bank of Commerce, as administrative
agent and letter of credit issuer, and National City Bank as collateral agent,
as trustee (the “Existing
Collateral Agent”), pursuant to which the Existing Borrowers
have obtained commitments from the Existing Lenders pursuant to which loans
were made from time to time;](3)










(3)           Use for ITB vessels.


 


[WHEREAS, Mortgagor, United States Shipping Master LLC (“Shipping
Master”), and each of the other subsidiaries of Shipping Master
(collectively, the “Existing
Borrowers”),have heretofore entered into that certain Amended
and Restated Credit Agreement, dated as of April 13, 2004, as amended by
that First Amendment to Amended and Restated Credit Agreement, dated as of
August 5, 2004 (the “Existing Credit Facility”), by and among the Existing
Borrowers, the commercial lending institutions parties thereto (the “Existing
Lenders”), Canadian Imperial Bank of Commerce, as administrative
agent and letter of credit issuer, and National City Bank as collateral agent,
as trustee (the “Existing
Collateral Agent”),


 





















 


pursuant to which the Existing Borrowers have obtained commitments from
the Existing Lenders pursuant to which loans were made from time to time;](4)










(4)           Use for Chemical
Pioneer and Charleston.


 


WHEREAS, in connection with the Existing Credit Facility, the
Mortgagor has heretofore executed and delivered that certain First Preferred
[Fleet Mortgage dated as of September 13, 2002, as amended by that First
Amendment to First Preferred Fleet Mortgage, dated as of April 13, 2004](5)
(the “Existing
Mortgage”) under which the Mortgagor granted Liens to the favor
of the Existing Collateral Agent as Mortgagee (the “Original
Mortgagee”) for the “Secured Parties” on the whole of the Vessels(6)
(as hereinafter defined) owned by Mortgagor;










(5)                                  Use for ITB vessels.  For Chemical Pioneer, amend to read “Ship
Mortgage dated as of April 13, 2004” and for Charleston, amend to read “Ship
Mortgage dated as of April 28, 2004”.


 


(6)                                  Use “Vessel” for Charleston and Chemical
Pioneer and globally throughout the amendment, change all references to “the
Vessels”, “each Vessel” and “any Vessel” to “the Vessel”. 


 


WHEREAS, the Existing Mortgage[, prior to amendment thereof,
was received on September  13, 2002 
in the office of the National Vessel Documentation Center at Falling
Waters, West Virginia and recorded in Book No.    , Page No.    
and the amendment thereto](7) was received on April 14, 2004(8)
in the office of the National Vessel Documentation Center at Falling Waters,
West Virginia and recorded in Batch No.    , Document ID No.   ;










(7)           Use
for ITB vessels.


 (8)          Use April 29, 2004 for the Charleston.


 


WHEREAS, all rights, titles, interests and obligations of the
Original Mortgagee under the Existing Mortgage have been assigned by the
Original Mortgagee to the Mortgagee pursuant to that certain Assignment of
Preferred [Fleet] [Ship] Mortgage dated as of even date herewith as filed for
recording in the office of the National Vessel Documentation Center at Falling
Waters, West Virginia on the date hereof;


 


WHEREAS, the Existing Credit Facility is being amended and
restated contemporaneously herewith pursuant to a Second Amended and Restated
Credit Agreement, dated as of even date herewith (together with all amendments,
supplements, restatements and other modifications, if any from time to time
thereafter made thereto, the “Credit Agreement”)
by and among U.S. Shipping Partners L.P. (the “MLP”), U.S. Shipping
Operating LLC, Mortgagor and all other subsidiaries of MLP, as borrowers
(individually, including their respective permitted successors and assigns, the “Borrower” and collectively, the “Borrowers”), the
commercial lending institutions parties thereto from time to time (the “Lenders”), Canadian
Imperial Bank of Commerce (“CIBC”), as administrative agent for the Lenders (in
such capacity together with its successors in such capacity, the “Administrative
Agent”), CIBC, as issuer of letters of credit thereunder (in
such capacity together with its successors in such capacity, the “Letter of
Credit Issuer”), and Mortgagee, as collateral agent, as trustee
on behalf of the Secured Parties (as defined below), a copy of such Credit
Agreement, without exhibits or schedules (other than Exhibit “L” thereto which
is the form of the Amended and Restated Cash Collateral Control Agreement as
defined in the Credit Agreement and which is herein the “Cash
Collateral Control Agreement”), being attached hereto as Exhibit “A”
and incorporated herein by reference, the Lenders will make available to the
Borrowers term loans,


 


2





















 


revolving loans, and letters of credit, which loans and obligations
with respect to such letters of credit may, at the request of any Lender, be
evidenced by certain promissory notes in favor of such of the Lender (the “Notes”), a copy of
the form of the Notes is attached hereto as Exhibit “B” and
incorporated herein by reference, in an aggregate principal amount of
$180,000,000; and


 


WHEREAS, the principal of and interest on loans are due and
payable upon the terms and conditions recited in the Credit Agreement;


 


WHEREAS, loans made pursuant to the Credit Agreement in the
principal amount of [$100,966,006] have been advanced by the Lenders on the
date hereof;


 


WHEREAS, one or more Lenders or Affiliates of a Lender
(together with their respective successors and assigns, the “Secured Hedge
Counterparties”) has entered into Hedge Agreements (as defined
in the Credit Agreement) with one or more of the Borrowers, and the Mortgagor
has agreed in the Credit Agreement to execute, deliver and cause to be recorded
such amendments hereto as may reasonably be requested by the Mortgagee to
secure obligations under the Hedge Agreements, and the Mortgagor and Secured Hedge
Counterparties have agreed that the maximum potential obligations under those
Hedge Agreements currently outstanding (as evidenced by confirmations, a copy
of which is attached hereto as Exhibit “C” and
incorporated herein by reference) as of the date hereof is $5,500,000;


 


[WHEREAS, contemporaneously in connection with the Credit
Agreement, the Mortgagor has executed and delivered that certain Guaranty (the
“Guaranty”)
dated as of even date herewith in favor of the Mortgagee as collateral agent
and a copy of the form of the Guaranty is attached hereto as Exhibit “D”
and incorporated herein by reference;](9)










(9)           Use
for Chemical Pioneer.


 


WHEREAS, the total principal amount of sums advanced as of
the date hereof is [$100,966,006] and the maximum committed amount to be
advanced under the Credit Agreement is One Hundred Eighty Million Dollars
($180,000,000) plus the maximum potential obligations under the Hedge
Agreements of an amount of Five Million Five Hundred Thousand Dollars
($5,500,000) agreed by the Mortgagor and the Mortgagee in the Credit Agreement
as the maximum principal amount of obligations under the Hedge Agreements to be
secured hereunder.  Consequently, the
total principal amount of this Mortgage is $185,500,000;


 


WHEREAS, the Mortgagor has duly authorized the execution,
delivery and performance of this Mortgage;


 


WHEREAS, Mortgagor, as a Subsidiary of the MLP and as a
Borrower, will benefit, either directly or indirectly, from the credit
extensions to be made under the Credit Agreement and under the Hedge Agreements
with the Secured Hedge Counterparties;


 


WHEREAS, Mortgagor is the sole owner of the whole of each
Vessel (as hereinafter defined);


 


3





















 


WHEREAS, each Vessel has been documented in the name of the
Mortgagor under the laws and the flag of the United States with the National
Vessel Documentation Center;


 


WHEREAS, it is a condition precedent to the funding of the
Loans and the issuance of the Letters of Credit under the Credit Agreement for
the purpose of extending, renewing and continuing loans under the Existing
Credit Facility, and to the extension of financial accommodations under the
Hedge Agreements referred to above, that the Mortgagor shall have executed and
delivered this Mortgage to the Mortgagee, for its benefit and the benefit of
the Lenders, the Administrative Agent, the Letter of Credit Issuer and the
Secured Hedge Counterparties (each of the Mortgagee, Lenders, Administrative
Agent, Letter of Credit Issuer and Secured Hedge Counterparties individually
being a “Secured
Party” and collectively, the “Secured Parties”); and


 


WHEREAS, the parties hereto intend that the Existing Mortgage
be amended and restated, and the terms of the Existing Mortgage are
consolidated herein, by this Mortgage;


 


NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the due and punctual payment and performance of any
and all present and future obligations and liabilities of Mortgagor of every
type or description to Mortgagee: (i) arising under or in connection with the
Credit Agreement, the Notes, the Letters of Credit[, the Guaranty](10) and/or
the Hedge Agreements, whether for principal, premium (if any), interest,
expenses, indemnities, termination payments or other amounts (including
attorneys’ fees and expenses); or (ii) arising under or in connection with
this Mortgage or any other Loan Document, including for reimbursement of amounts
that may be advanced or expended by the Mortgagee (a) to satisfy amounts
required to be paid by Mortgagor under this Mortgage or any other Loan Document
for claims and Liens, together with interest thereon to the extent provided or
(b) to maintain or preserve any collateral, including each Vessel or to create,
perfect, continue or protect any collateral or the security interest therein,
including each Vessel, or its priority; in each case whether due or not due,
direct or indirect, joint and/or several, absolute or contingent, voluntary or
involuntary, liquidated or unliquidated, determined or undetermined, now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether or
not arising after the commencement of a proceeding under the Federal Bankruptcy
Code (including post-petition interest) and whether or not recovery of any such
obligation or liability may be barred by a statute of limitations or such
obligation or liability may otherwise be unenforceable (all obligations and
liabilities described herein are collectively referred to as the “Secured
Obligations”), Mortgagor does by these presents bargain, sell, transfer, assign, remise,
release, set over, confirm, mortgage, convey and grant a continuing security
interest in, unto Mortgagee, for itself and the ratable benefit of the Lenders,
the Administrative Agent and the Letter of Credit Issuer and the Secured Hedge
Counterparties and to Mortgagee’s successors and assigns in its capacity as
Collateral Agent, as










(10)         Use
for Chemical Pioneer.


 


4





















 


trustee, the whole of the following named and described vessels
[(hereinafter referred to individually as a “Vessel” and collectively
as the “Vessels”)](11),
to wit:


 


	
  VESSEL
  NAME

  	
   

  	
  OFFICIAL

  NUMBER

  	
   

  	
  GROSS

  TONS
  (RTG)

  	
   

  	
  PORT
  OF

  REGISTRY

  	
   

  
	
  [TUG NAME ALL CAPS] (TUG)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [BARGE NAME ALL CAPS] (BARGE)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


together with all materials, machinery, equipment and accessories now
or from time to time installed thereon, and substitutions therefor, whether now
existing or hereafter acquired, including without limitation all of its
boilers, engines, machinery, masts, spars, boats, pumps, anchors, cables,
chains, motors, navigation and radar equipment, tools, anchors, chains, booms,
cranes, rigs, pipes, tanks, tackle, apparel, furniture, fixtures, rigging,
supplies, fittings, communication systems, visual and electronic surveillance
systems and transportation systems, tools, utensils, food and beverage, liquor,
uniforms, linens, housekeeping and maintenance supplies, fuel (excluding any
fuel paid by a charterer under a Charter), all financial equipment, computer
equipment, calculators, adding machines and any other electronic equipment of
every nature used in connection with the operation of each Vessel, all
machinery, equipment, engines, appliances and fixtures for generating or
distributing air, water, heat, electricity, light, fuel or refrigeration, or
for ventilating or sanitary purposes, or for the exclusion of vermin or
insects, or for the removal of dust, refuse or garbage, all wall-beds,
wall-safes, built-in furniture and installations, shelving, lockers,
partitions, doorstops, vaults, motors, elevators, dumbwaiter, awnings, window
shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for
the same, fire sprinklers, alarm, surveillance and security systems, computers,
drapes, drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets
and carpeting, plumbing, bathtubs, showers, sinks, basins, pipes, faucets,
water closets, laundry equipment, washers, dryers, ice-boxes and heating units,
all kitchen and restaurant equipment, including but not limited to silverware,
dishes, cooking utensils, stoves, refrigerators, ovens, ranges, dishwashers,
disposals, water heaters, incinerators, furniture, fixtures and furnishings,
and all maintenance supplies used in connection with each Vessel, all
specifically designed installations and furnishings, and all furniture,
furnishings and personal property of every nature whatsoever now or hereafter
owned by the Mortgagor or in which the Mortgagor has any rights or interest and
located in or on, or attached to, or used or intended to be used or which are
now or may hereinafter be appropriated for use on or in connection with the
operation of each Vessel, or in connection with any construction being
conducted or which may be conducted thereon, and all extensions, additions,
accessions, improvements, betterments, renewals, substitutions, and
replacements to any of the foregoing, all of which (to the fullest extent
permitted by law) shall be conclusively deemed appurtenances to each Vessel,
and all other appurtenances to each Vessel appertaining or










(11)                            Use for ITB vessels.  For Chemical Pioneer and Charleston, delete
“referred to individually as” and “and collectively as the “Vessels” and note that chart below
will only have one row and no reference to “Tug” or “Barge”.


 


5





















 


belonging thereto, whether now owned or hereafter acquired, whether on
board or not, and all additions, improvements and replacements hereafter made
in or to each Vessel.


 


TO HAVE AND TO HOLD ALL and singular the above-described Vessels
unto Mortgagee, its successors and assigns forever.


 


Provided, however, that if the Secured Obligations are
paid and performed in full in accordance with the terms of the Credit
Agreement, [the Guaranty,](12) the Hedge Agreements, this Mortgage and the
other Loan Documents, and the termination or expiration of all Commitments and
all other commitments of the Secured Parties to any Borrower pursuant to any
Loan Document, then this Mortgage shall cease and, in such event, at the
expense of the Mortgagor, the Mortgagee agrees to execute all documents as the
Mortgagor may reasonably require to discharge this Mortgage under the laws of
the United States; otherwise, it shall remain in full force and effect.
Mortgagor agrees to perform and to observe the terms, covenants and agreements
contained in this Mortgage, the Credit Agreement[, the Guaranty](13), and in
the other Loan Documents to which it is a party, and to hold each Vessel
subject thereto.










(12)         Use for Chemical Pioneer.


(13)         Use for Chemical
Pioneer.


 


Nothing herein shall be deemed or construed to subject
to the Lien hereof any property other than the whole of the vessel or the
Vessels as the term is used in Chapter 313 of Subtitle III of Title 46 U.S.C. §
31301 et seq. (as
the same may from time to time be amended hereafter, or any reenactment or
recodification thereof, “Chapter 313”).


 


The terms and conditions of this Mortgage are as
follows:


 


ARTICLE I



Particular Representations, Warranties and Covenants of Mortgagor


 


The Mortgagor hereby represents, warrants, covenants
and agrees with the Mortgagee as follows:


 


1.             Mortgagor
is and shall continue to be a citizen of the United States within the meaning
of Section 2 of the Shipping Act, 1916, as amended (46 App. U.S.C. § 802),
entitled to own and operate each Vessel in the coastwise trade under its marine
documents, which marine documents shall be maintained in full force and effect
by the Mortgagor; each Vessel is duly documented in the name of the Mortgagor
under the United States flag with the National Vessel Documentation Center and
Mortgagor will at its own expense cause each Vessel to remain so documented.
All limited liability company action necessary for the execution, delivery,
validity and performance of this Mortgage and the other Loan Documents to which
Mortgagor is a party have been duly taken and this Mortgage constitutes the
legal, valid and binding obligation of Mortgagor enforceable in accordance with
its terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles


 


6





















 


(whether enforcement is sought by proceedings in equity or at law).
Mortgagor is a limited liability company duly organized and is and shall
continue to be validly existing and in good standing under the laws of the
State of Delaware and is authorized to do business and is in good standing in
any other state wherein Mortgagor is required to be qualified to do business,
except where the failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect.  This
Mortgage is given in good faith and with no intent to hinder or defraud any
existing or future creditor of the Mortgagor or lienor of any Vessel.


 


2.             Mortgagor
lawfully owns and possesses each Vessel free of all Liens, whatsoever, except
for (i) Liens which secure Mortgagee, its successors or assigns, and (ii) Liens
specifically permitted in accordance with Section 7.2.3 of the Credit
Agreement.  Mortgagor shall warrant and
defend title to and possession of all and every part of each Vessel for the
benefit of Mortgagee against all Persons whomsoever.


 


3.             Mortgagor
shall comply in all material respects with, and not permit any Vessel to be
operated in any material respect contrary to, any provision of any law, treaty,
convention, rule, regulation or order of the United States, any State, and/or
of any department or agency thereof, and shall not operate any Vessel outside
of the navigation limits of the insurance carried pursuant to Section 11 of
this Article I, will cause this Mortgage immediately to be duly filed and
recorded in accordance with Chapter 313, and will comply with and satisfy all
of the other provisions of Chapter 313. 
Mortgagor shall do every thing necessary to establish and maintain this
Mortgage as a valid and enforceable first preferred mortgage (within the
meaning of Chapter 313) on each Vessel, prior to all other Liens and encumbrances
(including, but not limited to, paying and discharging all debts, damages and
liabilities whatsoever which have given or may give rise to maritime or
possessory Liens on or claims enforceable against such Vessel).  Mortgagor will not do, or suffer or permit to
be done, anything which could reasonably be expected to injuriously affect the
documentation of any Vessel under the laws and regulations of the United
States.


 


4.             Neither
Mortgagor nor the master of any Vessel, or anyone acting in its or their behalf,
has or shall have any right, power of authority to create, incur or permit to
be placed or imposed or continued upon any Vessel any Lien whatsoever, except
as specifically permitted by Section 7.2.3 of the Credit Agreement, and in
no event shall any Lien be imposed or placed or continued upon any Vessel which
would  be prior to or on a parity with or
which  could reasonably be expected to
impair the Lien of this Mortgage; provided that the right of Mortgagor to create or permit the
existence of any Lien pursuant to Section 7.2.3 of the Credit Agreement
shall in no event be construed as permitting any libel, attachment, or other
seizure of any Vessel under process or color of legal authority to remain
undissolved or undischarged, or in any respect modify or alter any obligation
of Mortgagor under Section 7 of this Article I.


 


5.             Mortgagor
shall pay and discharge before the same shall become delinquent, all taxes,
assessments, governmental charges, fines and penalties lawfully imposed upon
the Vessels and upon any income therefrom; provided that
Mortgagor may omit to pay any such taxes, assessments, governmental charges,
fines or penalties that are being contested in good faith and with due
diligence and by appropriate legal proceedings; provided that the nonpayment
thereof will not subject any Vessel to arrest, detention, attachment,
forfeiture or loss; and provided


 


7





















 


further, however, that Mortgagor will pay or cause to be
paid all such taxes, assessments, or charges forthwith upon the commencement of
proceedings to foreclose any Lien which is attached as security therefor.
Mortgagor shall indemnify and save Mortgagee and the Administrative Agent, the
Letter of Credit Issuer and each Lender harmless from and against any
liability, loss, damage, cost or expense of any kind that may be imposed upon
Mortgagee or such Lender in connection with any such contest and any
determination resulting therefrom, and the right of Mortgagor to contest the
validity of any claim contemplated by this Section 5 shall in no event be
construed as permitting any libel, attachment, or other seizure of any Vessel
under process or color of legal authority to remain undissolved or
undischarged, or in any respect modify or alter any obligation of Mortgagor
under Section 7 of this Article I.


 


6.             Mortgagor
will cause a properly certified copy of this Mortgage to be exhibited to any
and all Persons having business with any Vessel which could reasonably be
expected to give rise to any Lien thereon other than Liens for stevedores’ and
crews wages, salvage and general average, and to any representative of the
Mortgagee on demand. A notice of this Mortgage shall be prominently displayed
aboard each Vessel in the pilot house, and in the chart room, and in the
Master’s cabin of each Vessel, printed in plain type of such size that it shall
cover a space not less than six (6) inches wide by nine (9) inches high, which
said notice shall read as follows:


 


Notice of Mortgage


 


This vessel is owned by [NAME OF MORTGAGOR ALL CAPS],
a Delaware limited liability company, and is covered by an Amended and Restated
First Preferred [Fleet] [Ship] Mortgage in favor of KEYBANK NATIONAL
ASSOCIATION, as Collateral Agent, as trustee, for the Lenders under a Second Amended
and Restated Credit Agreement dated as of November 3, 2004 among U.S. SHIPPING
PARTNERS L.P., U.S. SHIPPING OPERATING LLC, [NAME OF MORTGAGOR ALL CAPS], and
others, said Amended and Restated First Preferred [Fleet] [Ship] Mortgage
having been executed under authority of the Ship Mortgage Act, 1920, as
amended, recodified at 46 U.S.C. § 31301 et seq. Under
the terms of said Amended and Restated First Preferred [Fleet] [Ship] Mortgage,
neither the Mortgagor nor the Master, nor any agent of this Vessel nor any
other Person has any right, power or authority to create, incur or permit to be
imposed upon this Vessel any Lien whatsoever other than those liens
specifically permitted pursuant to Section 7.2.3 of such Second Amended
and Restated Credit Agreement.


 


[provided, however, that upon the conversion of Mortgagor to a
corporation, the required notice to be posted pursuant to this section shall
read as follows:


 


Notice of Mortgage


 


This vessel is owned by USCS CHEMICAL PIONEER INC., a
Delaware corporation, and is covered by an Amended and Restated


 


8





















 


First Preferred Ship Mortgage, as amended, in favor of
KEYBANK NATIONAL ASSOCIATION, as Collateral Agent, as trustee, for the Lenders
under a Second Amended and Restated Credit Agreement dated as of November 3,
2004 among U.S. SHIPPING PARTNERS LP, U.S. SHIPPING OPERATING LLC, USCS
CHEMICAL PIONEER INC. (as successor by conversion to USCS CHEMICAL PIONEER
LLC), and others, said Amended and Restated First Preferred Ship Mortgage
having been executed under authority of the Ship Mortgage Act, 1920, as
amended, recodified at 46 U.S.C. § 31301 et seq. Under
the terms of said Amended and Restated First Preferred Ship Mortgage, as
amended, neither the Mortgagor nor the Master, nor any agent of this Vessel nor
any other Person has any right, power or authority to create, incur or permit
to be imposed upon this Vessel any Lien whatsoever other than those liens
specifically permitted pursuant to Section 7.2.3 of such Second Amended
and Restated Credit Agreement.](14)










(14)         Use
for Chemical Pioneer.


 


7.             Subject
to the provisions of Section 23, if any Vessel shall be libeled, arrested,
attached, detained, seized or levied upon or taken into custody under process
or under color of any authority, Mortgagor shall forthwith notify Mortgagee by
telecopy, confirmed by letter, and forthwith discharge or release such Vessel
therefrom, and in any event within fifteen (15) days after such libel,
attachment, detention, seizure, levy or taking into custody; provided, however,
that if the Mortgagor or any charterer of such Vessel shall invoke the benefits
of 46 App. U.S.C. § 181 to § 186, inclusive, as amended, providing for the
limitation of the liability of ship owners, then and in that event, the release
and discharge of such Vessel shall be effected within five (5) days from the
date of the order of the district court for the payment into the registry of
the court of the amount of the value of petitioner’s interest in such Vessel
and its pending freight, if any, or an equivalent as accepted by the court; and
provided, further,
that in any such proceeding to limit liability, such Vessel shall not be
surrendered or offered to be surrendered to a trustee as provided in 46 App.
U.S.C. § 185(b), without the written consent of Mortgagee first had and
obtained.  If Mortgagor shall fail or
neglect to release such Vessel from libel, arrest, attachment, detainment,
seizure or levy, Mortgagee or any Person acting on behalf of Mortgagee may, but
shall not be obligated to, furnish security to release such Vessel and by so
doing shall not be deemed to have cured the default of Mortgagor and the cost
of same shall be charged against Mortgagor and be promptly repaid to Mortgagee
with interest thereon at a rate equal to the Alternate Base Rate plus the
Applicable Margin for Base Rate Loans plus a margin of 2% upon any overdue
principal amount of the indebtedness outstanding under the Credit Agreement and
with costs and the interest thereon shall constitute a debt secured by the Lien
of this Mortgage.


 


8.             Mortgagor
shall (i) at all reasonable times and (unless an Event of Default shall have
occurred and is continuing in which case no notice is required) upon reasonable
notice to Mortgagor afford Mortgagee or its representatives complete
opportunity to inspect or survey each Vessel and its cargoes and papers
(including each Vessel’s logs), (ii) at the reasonable


 


9





















 


request of Mortgagee, deliver for inspection copies of any and all
contracts and documents relating to each Vessel, whether on board or not, and
(iii) certify upon Mortgagee’s request, but not more often than quarterly, that
all wages and other claims whatsoever, which might have given rise to a Lien
upon any Vessel, have been paid or are not overdue.


 


9.             (a)           Mortgagor shall not, without the
prior written consent of Mortgagee, sell, lease, demise, charter (except as
permitted by the Credit Agreement), or further mortgage any Vessel or any
interest therein; provided that Mortgagor may
demise or bareboat charter any Vessel to [USS Chartering LLC](15) or another
Borrower pursuant to a Bareboat Charter in substantially the form of a [USS
Chartering Lease](16).  Any such written
consent to any one sale, lease, demise, charter or mortgage shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed sale, lease, demise, charter or mortgage of any Vessel (or any
interest therein). Any such sale, mortgage, charter or transfer of such Vessel
or any interest therein shall be subject to the provisions of this Mortgage and
the Lien hereof.










(15)         Use
“USCS Chemical Chartering LLC” for Chemical Pioneer and Charleston.


 (16)        Use “Chemical Chartering Lease” for Chemical Pioneer and
“USCS Chartering Lease” for Charleston.


 


(b)           Mortgagor
shall not, except as herein expressly permitted, change the name or flag of any
Vessel or make any substantial change in any Vessel’s structure without the
written consent of Mortgagee first had and obtained in its sole and absolute
discretion, and any such written consent to any change of name, flag or
structure shall not be construed to be a waiver of this provision with respect
to any subsequent proposed change of name, flag or structure.  In the event of Mortgagee’s consent to any
change of name or flag of the Vessel, such change shall not be undertaken
unless and until all filings, recordations or other actions necessary to
perfect and protect the Lien created by this Mortgage and to enable the
Mortgagee to exercise and enforce its rights and remedies hereunder with
respect to such Vessel after giving effect to such change of name or flag shall
have been completed (including, without limitation, opinions of counsel as to
the perfected status of the Mortgagee after giving effect to such change of
name or flag, if required by Mortgagee).


 


10.           From
time to time Mortgagor shall execute and deliver such other and further
instruments and assurances as:  (i) may
be required to effect the purposes of this Mortgage and to secure from time to
time obligations of the Mortgagor under any Hedge Agreement with a Secured
Hedge Counterparty; (ii) necessary to maintain and effectuate this Mortgage as
a valid and enforceable first preferred mortgage (within the meaning of Chapter
313) on each Vessel, prior to all other Liens and encumbrances; (iii) necessary
for operation of each Vessel by Mortgagee; and (iv) necessary to effectuate
sales as hereinafter provided in paragraph (c) of Section 7 of Article II.


 


11.           (a)           So long as any of the Secured
Obligations secured hereby remain outstanding or any Commitment or any other
commitment of the Secured Parties to any Borrower pursuant to any Loan Document
remains outstanding, Mortgagor, at its expense and at no expense to the
Mortgagee, shall keep each Vessel insured against (i) risks of fire, explosion
and marine perils, and against all other risks insured under the form of policy
known as “American Institute Hull Clauses (June 2, 1977),” or equivalent
including, but not limited to,


 


10





















 


strikes, riots, and civil commotion coverage, (ii) risks covered by
protection and indemnity insurance (including, without limitation, coverage
against third party claims for pollution liability including statutory and
governmental clean-up liabilities) and (iii) such other risks and liabilities,
including employees’ compensation, from time to time reasonably specified by
Mortgagee.  The Mortgagor will keep the
Vessels insured, in lawful money of the United States and in markets reasonably
acceptable to the Mortgagee, for not less than (A) in the case of the insurance
referred to in clause (i) above, [for the integrated tug and barge,](17) the
higher of (x) [$33,000,000](18) [$32,000,000](19) [$48,000,000](20) for
the first 12-month period occurring after the date hereof, reducing by
$4,000,000 on each of the next five (5) anniversary dates thereafter, and (y)
the full insurable value of such Vessels, and (B) in the case of the insurance
referred to in clause (ii) above, in an amount customarily carried by a vessel
engaged in the same or similar trade, but not less that $3,000,000,000 per
incident with a $900,000,000 pollution sublimit per incident; provided, however,
that any protection and indemnity insurance shall be in an amount not less than
the amount of insurance against total loss. 
Policy deductibles shall not exceed $150,000 for the first 12-month
period occurring after the date hereof and $250,000 thereafter.










(17)         Use for ITB vessels.


(18)         Use
for the Chemical Pioneer.


(19)         Use
for the ITB vessels.


(20)         Use for the
Charleston.


 


(b)           The
policy or policies of insurance shall be issued by underwriters or associations
having an A.M. Best & Company, Inc. rating of A- or higher, or if such
underwriter or association is not rated by A.M. Best & Company, Inc.,
having the financial stability and size deemed appropriate by a reputable
insurance broker, and shall contain terms customarily imposed on vessels
engaged in the same or similar type of trade. The Mortgagor shall furnish to
the Mortgagee, annually, not later than ninety (90) days after the end of
Mortgagor’s fiscal year, a detailed certificate or opinion signed by a firm of
marine insurance brokers reasonably satisfactory to the Mortgagee that the
insurance coverages in place and the amounts thereof are prudent and reasonable
taking into account existing industry practices, and the risks associated with
the trade of the Vessels and comply with Mortgagor’s obligations under this
Section 11. Cover notes and/or certificates for all insurance coverages
provided for herein shall be furnished to the Mortgagee upon execution of this
Mortgage and delivered to Mortgagee whenever requested but, in all events, no
less than annually on or before January 15 of each year and at the time such
insurance coverages are renewed, extended or a new insurance policy substituted
therefor. All policies required hereunder shall contain provisions that the
same may not be cancelable or materially modified until thirty (30) days following
delivery to Mortgagee of written notice of intent to cancel (except for war
risk, in which case notice shall be given to the extent required by the
policies).  Any language contained in the
printed policy or insurance certificate which relieves the insurance carrier
from responsibility to the Mortgagee in the event such carrier fails to provide
such notice must be deleted.


 


(c)           All
insurance and the policies, except protection and indemnity insurances,
evidencing the same shall by their terms be taken out in the joint names of
Mortgagor and Mortgagee, and shall by their terms be payable to them as their
respective interests may appear.  The
interest of Mortgagee is hereby declared to be the outstanding amount of the


 


11





















 


Secured Obligations, whether contingent or absolute, due or to be
become due.  The Mortgagor shall not
declare or agree with the underwriters that any Vessel is a constructive or
compromised, agreed or arranged total loss without the prior written consent of
the Mortgagee. The proceeds of all insurance, except protection and indemnity
insurances, shall be paid to Mortgagor and Mortgagee jointly and shall be
deposited in the Restricted Loss Proceeds Account as provided in the Cash
Collateral Control Agreement.  All
proceeds arising as a result of a total loss, actual or constructive, as
constructive total loss is defined in the policy or policies of hull insurance
procured hereunder, or as a result of a requisition, condemnation, or taking
shall be paid to the Mortgagee for application to the payment of the Secured
Obligations as provided in Section 3(h)(i) of the Cash Collateral Control
Agreement.


 


(d)           Mortgagor
agrees to renew all insurance policies or cause or procure the same to be
renewed before the relevant policies or contracts expire and to procure that
the insurers or a firm of independent marine insurance brokers shall promptly
confirm in writing to the Mortgagee as and when each such renewal is effected.  The Mortgagor agrees to cause such insurers
or independent marine insurance brokers to agree (x) to advise the Mortgagee
promptly of any failure to renew or other event which could reasonably be
expected to cause a lapse in coverage and of any default in payment of any
premium and of any other act or omission on the part of the Mortgagor of which
they have knowledge and which could reasonably be anticipated to, in their
opinion, invalidate or render unenforceable, or cause the lapse of, or prevent
the renewal or extension of, in whole or in part, the insurance on any Vessel
and (y) to mark their records and advise the Mortgagee at least thirty days
prior to the expiration date of any of the insurance policies, that such
insurance policies have been renewed or replaced with new insurance which
complies with the provisions hereof.


 


(e)           Mortgagor
warrants that it will maintain all such insurance unimpaired by any act, breach
of warranty or otherwise, and that it will not be guilty of or permit any act
of omission or commission which will in any way invalidate, void or suspend any
insurance herein provided to be maintained. 
Mortgagor shall also procure and maintain breach of warranty or
Mortgagee’s interest insurance in favor of Mortgagee on each of the above
policies unless the Administrative Agent shall otherwise agree in writing with
the Mortgagor.  Mortgagor shall pay for
or defend against with appropriate proceedings diligently pursued if reasonably
disputed any loss of or damage to any Vessel by any cause whatsoever and any
third-party claims whatsoever which would constitute a Lien against any Vessel
not covered by insurance or for which no reimbursement or incomplete
reimbursement is secured from the insurance.


 


12.           Mortgagor
shall, at its own expense, at all times keep each Vessel tight, strong, in good
seaworthy condition working order and in a good and efficient state of repair
and fit for its intended use and perform all ordinary maintenance on each
Vessel and make all reasonably proper renewals and replacements necessitated by
wear, tear, normal depreciation and casualty so as to comply in all material
respects with the provisions of all laws, regulations and requirements
(statutory or otherwise) from time to time applicable to vessels registered
under the flag of the United States and engaged in the service in which each
Vessel is engaged.  In the event of
damage to any Vessel less than a total loss, actual or constructive, as
constructive total loss is defined in the policy or policies of hull insurance
procured hereunder, the Mortgagor shall make and pay for the repairs
necessitated thereby, and in that event Mortgagor shall pay the


 


12





















 


amount of the deductible average provided in the insurance, and if
Mortgagor has paid for such repairs, Mortgagor shall be entitled to receive the
proceeds of insurance applicable to the repaired damage in the manner and to
the extent provided in the Cash Collateral Control Agreement; and if Mortgagor
does not make such repairs, Mortgagor nevertheless shall remain bound for the
amount of the deductible average provided in such insurance.  Mortgagor will keep each Vessel in such
condition as would entitle it to the highest classification and rating for
vessels of the same age and type in the American Bureau of Shipping, or another
classification society of like standing approved by the Mortgagee.  Mortgagor covenants that each Vessel shall,
at all times comply in all material respects with all laws, treaties and conventions,
and rules and regulations issued thereunder, applicable to such Vessel, its
operation and trade, and shall have on board as and when required thereby,
valid certificates showing compliance therewith.  Mortgagor will not make, or permit to be
made, any substantial change in the structure, type or speed of any Vessel or
change its rig without the prior written approval of Mortgagee.


 


13.           Without
limiting the generality of any other provision contained herein or in any other
Loan Document, Mortgagor will comply in all material respects with and satisfy
in all material respects all of the provisions of any applicable law,
regulation, proclamation or order concerning financial responsibility for
liabilities imposed on each Vessel with respect to pollution by any applicable
state or nation or political subdivision thereof, including, without being
limited to, the United States Oil Pollution Act of 1990, as at any time
amended, or by any applicable international treaty or convention, and will
maintain all certificates or other evidence of financial responsibility as may
be required by any such applicable law, regulation, proclamation, order, treaty
or convention with respect to each Vessel’s cargo or the trade in which each
Vessel is from time to time engaged.


 


14.           The
Mortgagor agrees to keep books of record and account in accordance with
generally accepted accounting principles and to make said books of record and
account available to Mortgagee during normal business hours and (unless an
Event of Default shall have occurred and is continuing in which case no notice
is required) upon reasonable notice to Mortgagor when requested to do so by
Mortgagee and to furnish Mortgagee with any and all information and statements
as Mortgagee may reasonably request.


 


15.           The
entry into and performance by the Mortgagor of each of this Mortgage and the
other Loan Documents to which Mortgagor is a party, does not, and will not
violate in any respect (i) any applicable law or regulation of any governmental
or official authority or body, or (ii) any agreement, contract or other
undertaking to which the Mortgagor is a party or which is binding on the
Mortgagor or any of its assets.


 


16.           All
consents, licenses, approvals and authorizations (including any approvals of
the U.S. Maritime Administration) required for the entry into, performance,
validity and enforceability of this Mortgage and the other Loan Documents to
which Mortgagor is a party have been obtained and are in full force and effect,
except for those consents, licenses, approvals and authorizations the failure
of which to obtain could not reasonably be expected to have a Material Adverse
Effect.


 


17.           Except
for the filing with the National Vessel Documentation Center, it is not
necessary for the legality, validity, enforceability or admissibility in
evidence of this Mortgage


 


13





















 


that it, or any document relating hereto, be registered, filed,
recorded or enrolled with any court or authority in any relevant jurisdiction
or that, except for the recording fee payable to the U.S. Coast Guard, any
stamp, registration or similar taxes or fee be paid on or in relation to this
Mortgage and the Loan Documents.


 


18.           The
Mortgagor will cause each Vessel, upon documentation with the National Vessel
Documentation Center and at all times thereafter, to be operationally
seaworthy; provided, that the Mortgagor shall not be deemed to be in violation
of the foregoing with respect to any Vessel during such time as such Vessel is
in drydock or is undergoing necessary repairs as permitted or required by the
Credit Agreement.


 


19.           The
Mortgagor will submit or cause each Vessel to be submitted to such periodic
surveys as may be required for inspection purposes and to supply or to cause to
be supplied to the Mortgagee at its request, copies of all survey reports
concerning such Vessel.


 


20.           The
Mortgagor will promptly furnish and cause to be furnished to the Mortgagee all
such information as it may from time to time reasonably request regarding each
Vessel, its employment, position and engagements, particulars of all towages
and salvages and copies of all charters and other contracts for its employment
or otherwise concerning the matters addressed by this Mortgage.


 


21.           The
Mortgagor agrees to notify the Mortgagee in writing of:


 


(i)                                     any accident to any Vessel involving
repairs the cost of which will or is likely to exceed ONE MILLION DOLLARS
($1,000,000);


 


(ii)                                  any occurrence which has or is likely to
render any Vessel a total loss or a constructive total loss;


 


(iii)                               any requirement or recommendation made by
any insurer or classification society or by any competent authority with which
there is not prompt compliance with the reasons therefor;


 


(iv)                              any arrest of any Vessel or the exercise
or purported exercise of any Lien on any Vessel or its earnings; and


 


(v)                                 any occurrence of an event of default
specified in Article II hereof or an event which with notice, lapse of time or
both will constitute an event of default specified therein.


 


22.           In
the event that at any time and from time to time this Mortgage, any other Loan
Document or any provisions hereof or thereof shall be deemed invalidated in
whole or in part by reason of any present or future law or any decision of any
court, or if the documents at any time held by Mortgagee shall be reasonably
deemed by Mortgagee insufficient to carry out the true intent and spirit of
this Mortgage and each other Loan Document, then Mortgagor, forthwith upon the
reasonable request of Mortgagee, will execute and deliver, on its own behalf,
such other and further assurances and documents as may be reasonably necessary
to more effectively


 


14





















 


subject each Vessel to the payment of the Secured Obligations, as
provided in this Mortgage and each other Loan Document and the performance of
the terms and provisions of this Mortgage and each other Loan Document and do
such things as Mortgagee in its sole discretion may reasonably deem to be
necessary to carry out the true intent of this Mortgage.


 


23.           In
the event of the requisition (whether of title or use), condemnation,
sequestration, seizure or forfeiture of any Vessel by any governmental or
purported authority or by anyone else, the Lien of this Mortgage shall be
deemed to attach to, and to Mortgagor’s claim for, any compensation, purchase
price, reimbursement or award therefor payable from any source (including any
insurance proceeds in respect thereof), and any payments in respect thereof
shall be paid to Mortgagee and applied in accordance with the terms of the Credit
Agreement.  Mortgagor shall promptly
execute and deliver to Mortgagee such documents and do and perform such acts as
in the opinion of Mortgagee acting reasonably may be necessary or useful to
facilitate or expedite the collection by Mortgagee of such compensation,
purchase price, reimbursement or award.


 


24.           Further
Assurances.  If this Mortgage, or any
provisions hereof, shall be deemed invalid in whole or in part for any reason,
or if the documents at any time held by Mortgagee shall be deemed by Mortgagee
for any reason insufficient to carry out the true intent and spirit of this
Mortgage, then from time to time Mortgagor will duly execute and deliver, on
its own behalf, any and all such other and further assurances and documents as
in the judgment of Mortgagee acting reasonably may be necessary, useful or
desirable more effectually to subject each Vessel to the Lien of this Mortgage
or to obtain or maintain the full benefits of this Mortgage.  Upon the failure of Mortgagor so to do,
Mortgagee may execute any and all such other and further assurances and
documents for and in the name and stead of Mortgagor.


 


ARTICLE II



Events of Default and Remedies of Mortgage


 


1.             In
the event that Mortgagor fails to procure and/or maintain insurance, as
provided in Section 11 of Article I above, Mortgagee may, at its option,
without any obligations so to do, and without waiver of any of its rights
hereunder, procure such insurance as it deems necessary to protect its security
and the cost of the same shall be charged against Mortgagor and be promptly
repaid to Mortgagee with interest thereon at the Alternate Base Rate plus the
Applicable Margin for Base Rate Loans plus a margin of 2%, and such insurance
costs and the interest thereon shall constitute a debt secured by the Lien of
this Mortgage.


 


2.             In
the event that any Vessel shall be arrested or detained by a marshal or other
officer of any court of law, equity, or admiralty jurisdiction, or by any
governmental or other authority, on a claim for which Mortgagor is alleged to
be liable, and shall not be released from arrest or detention as and within the
time prescribed by the provisions of Section 7 of Article I above, Mortgagor
hereby authorizes and empowers Mortgagee, as its duly appointed representative,
in the name of Mortgagor, or its successors or assigns, to apply for, claim and
receive, or take possession of such Vessel with all rights and powers
Mortgagor, its successors or assigns may have, possess, and exercise in any
such event. The power hereby granted shall be irrevocable and may be exercised
not only by said representatives of Mortgagee, but also by an


 


15





















 


appointee or appointees of such representatives, with full power of
substitution, to the same extent as if such appointee or appointees had been
named as one of the attorneys above named by express designation. Mortgagor
also authorizes and empowers any Person duly acting under the provisions of
this Section 2 of Article II to appear in the name of Mortgagor, its successors
or assigns, in any court where a suit may be pending against Mortgagor, or
against any Vessel because of or on account of any alleged Lien against such
Vessel and from which it has not been released, and to take such proceedings as
such Person may deem proper for the defense of such suit and for the release of
such Vessel therefrom.  All expenditures
or liabilities made or incurred by them, or any of them, in the premises, in
good faith, shall be debts due from Mortgagor to Mortgagee, and shall be
promptly repaid by Mortgagor to Mortgagee with interest thereon at the
Alternate Base Rate plus the Applicable Margin for Base Rate Loans plus a
margin of 2%, and shall be secured by the Lien of this Mortgage.


 


3.             In
the event Mortgagor fails properly to comply with the provisions of Section 12
of Article I above, Mortgagee may, at its option, without any obligation so to
do and without waiver of any of its rights hereunder, perform such maintenance
and make such repairs, renewals and replacements and the cost of the same shall
be charged against Mortgagor and be promptly repaid to Mortgagee with interest
thereon at the Alternate Base Rate plus the Applicable Margin for Base Rate
Loans plus a margin of 2%, and all such expenditures and the interest thereon
shall constitute a debt from Mortgagor to Mortgagee secured by the Lien of this
Mortgage.


 


4.             In
the event that Mortgagee, though without any obligation so to do, employs an
attorney to protect any Vessel or to prevent the impairment of Mortgagee’s security
represented by any Vessel and/or makes any reasonable expenditure for any other
matter in any instance where Mortgagor is obligated by this Mortgage to employ
such attorney and/or make such expenditure shall be charged against Mortgagor
and be promptly repaid to Mortgagee with interest thereon at the Alternate Base
Rate plus the Applicable Margin for Base Rate Loans plus a margin of 2%, and
all such expenditures and the interest thereon shall constitute a debt from
Mortgagor to Mortgagee secured by the Lien of this Mortgage.


 


5.             In
the event that Mortgagee should make any expenditure or incur any costs which
Mortgagor is obligated by this Mortgage so to do, such expenditure or costs
shall be charged against Mortgagor and be repaid promptly to Mortgagee with
interest thereon at the Alternate Base Rate plus the Applicable Margin for Base
Rate Loans plus a margin of 2% and shall constitute a debt from Mortgagor to
Mortgagee secured by the Lien of this Mortgage.


 


6.             The
following events are events of default (“Events of Default”):


 


(a)           An
Event of Default under and as defined in the Credit Agreement shall occur and
be continuing; or


 


(b)           Failure
by Mortgagor in the performance or observance of any of its obligations
hereunder if such failure shall continue unremedied for a period of thirty (30)
days following the date of written notice thereof to Mortgagor from the
Mortgagee; or


 


(c)           an
event of actual or constructive total loss or an agreed, or arranged, or
compromised total loss of any Vessel shall occur; provided, that it
shall not be an Event of


 


16





















 


Default under this clause (c) so long as Mortgagor (i) has insurance on
the Vessel with respect to such event, (ii) shall promptly file a claim for
such insurance with respect to such event and (iii) shall diligently continue
to pursue such insurance claim in good faith using appropriate proceedings.


 


7.             In
case of the occurrence of any Event of Default specified in Section 6 of this
Article II and its continuance for the period, if any, specified with reference
thereto in said section, then, and in each and every case, such default
subsisting, in addition to the remedies specified in the Credit Agreement [and
Guaranty](21), Mortgagee:










(21)         Use for Chemical Pioneer.


 


(a)           May
retake any or all of the Vessels without legal process at any time wherever it
may be, and, without being responsible in any manner for loss or damage to
Mortgagor or any other Person, and Mortgagor, or other Person in possession,
shall forthwith surrender possession of such Vessel or Vessels, as the case may
be, to Mortgagee, upon demand; Mortgagee then shall retake or may hold, lay up,
lease, operate, manage and control or otherwise use such Vessel or Vessels, as
the case may be, in any service as Mortgagee may elect and may insure such
Vessel or Vessels, as the case may be, and make all necessary or proper repairs
and useful alterations, additions, betterments and improvements thereto as to
it may seem judicious and shall be entitled to collect and receive all tolls,
earnings, income, rents, issues and profits of or arising out of the operation
or management of such Vessel or Vessels, as the case may be, and after
deducting all expenses of operation and/or repairs, maintenance, alterations,
additions, betterments and improvements and all payments for taxes, insurance,
as well as just and reasonable compensation for its own services, and for all
its agents, attorneys and employees, Mortgagee shall apply the net money
arising, as aforesaid, as provided by Section 9 of this Article II;


 


(b)           May
retake any or all of the Vessels without legal process wherever it may be and
without being responsible in any manner for loss or damage to Mortgagor or to
any other Person, and Mortgagor or any other Person in possession shall
forthwith, surrender possession of such Vessel or Vessels, as the case may be,
upon demand of Mortgagee, and Mortgagee may sell such Vessel or Vessels, as the
case may be, at public auction free from any and all claims of or by Mortgagor
in law, in equity, in admiralty or by statute, which said auction shall be made
at a time and place and upon such notice as may be required by law; if not
governed by any applicable provisions of law, such auction shall be made at
such time and place as Mortgagee may fix, after notice of the time, place and
terms of said auction, together with a description of the property to be
auctioned, has been published for six (6) consecutive days (except Sunday)
preceding the date for such auction in a newspaper printed in the English
language and customarily published on each business day and of general
circulation in the County of New York, State of New York, or in a newspaper
published in the county or counties in which the place of auction is located if
other than the said county.  Mortgagee
and its successors or assigns hereby are appointed the true and lawful
attorneys irrevocable of Mortgagor in its name and stead to make all necessary
transfers of property thus sold, and for that purpose it or they will execute
all necessary instruments of assignment and transfer, Mortgagor hereby
ratifying and confirming all that its said attorneys shall lawfully do by
virtue hereof; and Mortgagee shall have


 


17





















 


the right to become the purchaser hereunder if the Mortgagee is the
high bidder at the public auction;


 


(c)           May
proceed to protect and enforce its rights under this Mortgage, including all
rights and remedies arising by reason of the provisions of Chapter 313, and all
acts amendatory thereof and supplement thereto, by suit or suits in equity or
actions at law, or by suit in admiralty in rem or in personam, whether for
specific performance of any covenant or agreement contained herein or for any
foreclosure hereunder or for the enforcement of any proper legal or equitable
remedy or remedy in admiralty as Mortgagee, being advised by counsel, shall
deem most effectual to protect and enforce the rights aforesaid; in connection
with any such proceeding, Mortgagee shall be entitled, as a matter of right, to
the appointment of a receiver of the mortgaged property and of tolls, rents,
income, revenues, profits and earnings thereof; and shall be entitled as a
matter of right and not as a matter of discretion to:


 


(i)                                     the appointment of a receiver or
receivers of Mortgagor’s interest in the Vessel and Mortgagor’s interest in the
hire, earnings, issues, revenues, freights, incomes and profits due or to
become due and arising from the operation thereof; and


 


(ii)                                  a decree ordering and directing the sale
and disposal of each Vessel after the appropriate admiralty proceeding; and


 


(d)           May
proceed personally against Mortgagor in any court of competent jurisdiction to
recover, with interest thereon at the Alternate Base Rate plus the Applicable
Margin for Base Rate Loans plus a margin of 2%, any damages which Mortgagee may
sustain by reason of any infraction by Mortgagor of any Secured Obligations
contained in Sections 1 through 20, inclusive, of Article I above.


 


Mortgagee, as a condition precedent to exercising the
power of sale hereby granted or seeking to sell pursuant to judicial
proceedings, shall be required to give the notice required under the Credit
Agreement. Each and every power or remedy herein conferred on Mortgagee shall be
cumulative and in addition to all other powers or remedies now or hereinafter
existing in admiralty, in equity, in law or by statute (including the Delaware
Uniform Commercial Code) and may be exercised as often as may be deemed
expedient by Mortgagee. No delay or omission by Mortgagee shall impair any
right, power or remedy and no waiver of any default shall waive any other
default.


 


8.             If
at any time after one or more Events of Default enumerated in Section 6 of this
Article II shall have occurred and before any Vessel shall have been sold
pursuant to any provision of this Article II (whether or not proceedings for
foreclosure shall have been commenced and/or prosecuted in any court),
Mortgagor shall make good such default or defaults, including without limitation,
payment of any past due installment of principal and interest of the Secured
Obligations secured by the Lien of this Mortgage, and reimbursement of any
advances and expenditures made by Mortgagee in accordance with the provisions
of Sections 1, 2, 3, 4 and 5 of this Article II, with interest thereon,
together with attorneys’ fees and costs, then, and in every such case,
Mortgagee shall waive such default or defaults and its or their consequences
and shall rescind any action theretofore taken by it, including without
limitation,


 


18





















 


the acceleration of payment of the Secured Obligations secured by this
Mortgage; but no waiver shall extend to or affect any subsequent default or
impair any right consequent thereon.


 


9.             The
net proceeds of any judicial or other sale, of any charter, management or other
use of any Vessel by Mortgagee, of any claim for damages to any Vessel and of
any insurance received by Mortgagee (except to the extent that such insurance
proceeds are to be paid to Mortgagor in accordance with any provisions of this
Mortgage or the Cash Collateral Control Agreement) shall be held and applied by
Mortgagee from time to time as follows:


 


(i)                                     first: 
to the payment and satisfaction of all costs and expenses including,
without limitation, attorneys’ fees, incurred by the Mortgagee and by the
Administrative Agent in the enforcement and administration of this Mortgage and
of any of the other Transaction Documents;


 


(ii)                                  second: 
to the payment and satisfaction of all the other Secured Obligations
consisting of costs, expenses, interest or fees on a pro rata basis;


 


(iii)                               third: 
to the payment and satisfaction of all other Secured Obligations on a
pro rata basis; and


 


(iv)                              fourth: 
to the Mortgagor or such other Person as may be legally entitled
thereto.


 


Should there not be any funds or insufficient funds to
liquidate all valid claims of Mortgagee, then Mortgagor shall remain bound to
Mortgagee for any unpaid amount or balance due and shall be liable to pay said
amount to Mortgagee with interest thereon as provided in this Mortgage, but, if
after payment in full, any amount remains, it shall be paid to the Person or
entity entitled thereto.


 


10.           If
an Event of Default has occurred, which has not been cured pursuant to
provisions hereof, Mortgagor shall not at any time insist upon, plead in any
manner whatever, claim or take the benefit or advantage of, any stay or
extension, valuation or appraisement law for the purpose of preventing or
hindering the enforcement or foreclosure of this Mortgage, and it covenants
that it will not hinder, delay or impede the execution of any power herein
granted and declared to Mortgagee, but that it will suffer and permit the
execution of every such power as though no such law or laws had been made or
enacted, nor after any sale or sales will it claim or exercise any right under
any statute or otherwise to redeem the property so sold or any part thereof.


 


11.           Without
prejudice to any other rights and remedies of Mortgagee arising under this
Mortgage or the other Loan Documents, Mortgagor hereby agrees and undertakes to
indemnify Mortgagee against all obligations and liabilities whatsoever and
whensoever incurred by Mortgagee in good faith in the enforcement of its rights
hereunder or under any other Loan Documents.


 


19





















 


12.           (a)           Mortgagor hereby irrevocably appoints
Mortgagee its attorney-in-fact until the termination of this
Mortgage as herein provided to do in its name all acts which Mortgagor, or its
successors or assigns, could do in relation to each Vessel, including, without
limitation, to demand, collect, receive, compromise, settle and sue for
(insofar as Mortgagee lawfully may), all freights, hire, earnings, issues, revenues,
income and profits of such Vessel, and all amounts due from underwriters under
the insurance as payment for losses or as return premiums or otherwise, salvage
awards and recoveries, recoveries in general average or otherwise, and all
other sums due or to become due to Mortgagor or arising from such Vessel, and
to make, give and execute in the name of Mortgagor, acquittances, receipts,
releases, or other discharges for the same, whether under seal or otherwise, to
take possession of, sell or otherwise dispose of or manage or employ such
Vessel, to execute and deliver charters and a bill of sale for such Vessel, and
to endorse and accept in the name of Mortgagor all checks, notes, drafts,
warrants, agreements and all other instruments in writing with respect to the
foregoing and execute any necessary instruments for the U.S. Department of
Homeland Security necessary to consummate such sale or transfer; provided,
that Mortgagee shall take no action under the power of attorney granted hereby,
unless an Event of Default has occurred and Mortgagor has received prompt
written notice of such Event of Default.


 


(b)           The
exercise by or on behalf of Mortgagee of the power granted in this Section 12
shall not require any Person dealing with Mortgagee to conduct any inquiry as
to whether any such Event of Default has occurred and is continuing, nor shall
such Person be in any way affected by notice that any such Event of Default has
not occurred and is not continuing, and the exercise by Mortgagee of such power
shall, with regard to such Person, be conclusive evidence of the Mortgagee’s
right to exercise the same.


 


(c)           Wherever
and whenever herein any right, power or authority is granted or given to
Mortgagee, such right, power or authority may be exercised in all cases by
Mortgagee or such lawful agent or agents as it may appoint, and the act or acts
of such agent or agents when taken shall constitute the act of Mortgagee
hereunder.


 


13.           The
powers conferred on Mortgagee by this Mortgage are solely to protect its interest
and the interests of the Secured Parties in the Vessels and shall not impose
any duty upon it to exercise such powers. The exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other power or
remedy.  No notice to or demand on
Mortgagor in any instance shall entitle Mortgagor to any other or further
notice or demand in similar or other circumstances.  No delay or omission by Mortgagee in the exercise
of any right or power or in the pursuance of any remedy occurring upon an Event
of Default shall impair any such right, power or remedy or be construed to be a
waiver of any default on the part of Mortgagor or to be an acquiescence
therein, nor shall the acceptance by Mortgagee of any security or of any
payment of or on account of any past Event of Default or any advances after any
past Event of Default be construed to be a waiver of any right to take
advantage of any future Event of Default or of any past Event of Default not
completely cured thereby.  Except for the
safe custody of any part of the Vessels in its possession (subject to standards
of care governing the Mortgage hereunder) and the accounting for moneys
actually received by it hereunder, Mortgagee shall have no duty as to any part
of the Vessels whether or not Mortgagee or any Secured Party has or is deemed
to have


 


20





















 


knowledge of such matters, or as to the taking of any necessary steps
to preserve rights against any parties or any other rights pertaining to the
Vessels.


 


ARTICLE III



Possession Until Default


 


Until an Event of Default shall have occurred and
shall have continued for the time, if any, specified with reference thereto in
Article II above, Mortgagee shall permit Mortgagor and Mortgagor shall have the
right to possess, use, manage, operate and enjoy each Vessel.


 


ARTICLE IV



Miscellaneous Provisions


 


1.             All
covenants and agreements of Mortgagor herein contained shall bind Mortgagor,
its successors and assigns forever, and shall inure to the benefit of Mortgagee
and its successors and assigns forever. Following any assignment of this
Mortgage by Mortgagee, any reference herein to “Mortgagee” shall be deemed to
refer to the assignee.


 


2.             The
total amount of this Mortgage is One Hundred Eighty-Five Million Five Hundred
Thousand Dollars ($185,500,000), plus interest, expenses, costs, premium (if
any), indemnities, termination payments and other amounts (including attorneys
fees and expense) as provided herein, and in the other Loan Documents, and
performance of the Mortgage, Credit Agreement[,Guaranty](22) and Hedge
Agreements covenants and termination payments under the Hedge Agreements. The
discharge amount of this Mortgage is the same as the total amount.
Notwithstanding the foregoing or any other statement contained herein regarding
the maturity of this Mortgage, this Mortgage shall remain in full force and
effect until the payment in full of the Secured Obligations and the termination
or expiration of all Commitments and all other commitments of the Secured
Parties to any Borrowers pursuant to any Loan Document and until the full and
final performance by Mortgagor of all of its covenants contained in this
Mortgage and the other Loan Documents.










(22)         Use for Chemical
Pioneer.


 


3.             The
interest of the Mortgagor in the Vessels and the interest mortgaged by this
Mortgage is that of one-hundred percent (100%) absolute and sole
ownership.


 


4.             Any
notice or demand which by any provision of this Mortgage is required or
permitted to be given, delivered or served on Mortgagor may be given, delivered
or served by being deposited, first class postage prepaid, in a post office
letter box addressed (until another address is filed by Mortgagor in writing
with Mortgagee for the purpose of this section), or may be delivered by
pre-paid courier or by facsimile as follows: [NAME OF MORTGAGOR ALL CAPS], c/o
U.S. Shipping Partners L.P., 399 Thornall Street, Edison, NJ 08837, Attention:  Paul Gridley, telephone:  732-635-2700; facsimile:  732-635-1940. 
Any notice or demand which by any provision of this Mortgage is required
or permitted to be given, delivered or served on


 


21





















 


Mortgagee may be given, delivered or served by being deposited, postage
prepaid, in a post office box addressed (until another address is filed by
Mortgagee in writing with Mortgagor for the purposes of this section) or may be
delivered by courier or by facsimile as follows:  KeyBank National Association, as Collateral
Agent under the Credit Agreement, Preston Commons West Tower, 8117 Preston
Road, Ste. 440, Dallas, TX 75225, Attention: 
Thomas Rajan, telephone: 
214-414-2580; facsimile: 
214-414-2621.  Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted and
receipt electronically confirmed.


 


5.             In
the event of any casualty, accident, loss or other occurrence which gives rise
to a preferred maritime lien against any Vessel within the meaning of 46 U.S.C.
§ 31301, et seq.,
and § 31341 et
seq., or any other claim against any Vessel which primes the preferred
ship mortgage herein granted, except for Liens arising and accruing in the
ordinary course of business but not yet due, or in the event that Mortgagor
receives notice that any third party claims or contends that he or some other
party holds a preferred maritime lien or a claim against the Vessel which
primes the Lien of the Mortgage herein granted, and if any such Lien or claim
is not covered in full by insurance maintained by the Mortgagor or the
Mortgagor’s insurance company has issued a reservation of rights with respect
to any such Lien or claim, then, and in any such events, Mortgagor will give
Mortgagee immediate notice thereof.


 


6.             If
any provision of this Mortgage, or any obligation, right or remedy created by
this Mortgage be declared invalid in any legal proceeding, no other valid
obligation, right or remedy created by this Mortgage shall be affected thereby.


 


7.             Nothing
in this Mortgage, express or implied, is intended to confer upon any Person
other than the parties hereto and their respective successors, permitted
assigns and other transferees any rights or remedies under or by reason of this
Mortgage.


 


8.             This
instrument may, for convenience, be executed in any number of original
counterparts, each of which shall be deemed an original and all of which taken
together shall be and constitute one instrument. Any word importing the
singular shall as well include the plural and any pronoun importing gender
shall include the masculine, feminine or neuter.


 


9.             Anything
herein to the contrary notwithstanding, it is intended that nothing herein
shall waive the preferred status of this Mortgage and that, if any provision or
portion of this Mortgage shall be construed to waive its preferred status, then
such provision or portion to such extent shall be void and of no effect without
affecting the remaining provisions, which shall remain in full force and
effect.


 


10.           The
provisions of the Credit Agreement regarding amendments are specifically
incorporated in this Mortgage by reference, with the same force and effect as
if the same were set out in this Mortgage in full. All references in such
incorporated provisions to “Borrower” or “Borrowers” shall without further
reference mean and refer to Mortgagor and all references in such incorporated
provisions to “this Credit Agreement” shall without further reference mean and
refer to this Mortgage.


 


22





















 


11.           Mortgagor
hereby indemnifies Mortgagee, its agents, if any, and each Secured Party and
saves each of them harmless from and against all liability, loss, damages,
judgments and expenses, including reasonable attorneys’ fees, disbursements,
bond expenses, printing and automated document preparation and retention
expenses and other ordinary litigation expenses, incurred in connection with
any action or proceeding to foreclose this Mortgage or in or to which Mortgagee
or any Secured Party may be made a party due to the existence of this Mortgage
or to which action or proceeding Mortgagee or any Secured Party may become a
party for the purpose of protecting the Lien of this Mortgage, except to the
extent any such liability, loss, damages, judgments and expenses arises from
any gross negligence or willful misconduct on the part, or on behalf, of
Mortgagee or such Secured Party.  All
sums paid by Mortgagee or any Secured Party to prosecute or defend the rights
herein set forth shall be deemed a part of the Secured Obligations and shall be
paid by Mortgagor to Mortgagee or such Secured Party within ten (10) days after
written demand, and if not paid within that period, shall accrue interest from
and including the date of disbursement or advance by Mortgagee or such Secured
Party to and including the date of payment by Mortgagor at the Alternate Base
Rate plus the Applicable Margin for Base Rate Loans plus a margin of 2%.


 


12.           This
Mortgage shall be governed by and construed in accordance with the provisions
of Chapter 313, and where Chapter 313 is silent, by the General Maritime Law of
the United States, and only to the extent not addressed thereby, by the laws of
the State of New York.


 


13.           To
the extent of any inconsistency between any representation, warranty or
covenant herein and in the Credit Agreement, the representation, warranty or
covenant in the Credit Agreement shall prevail.


 


14.           Survival
of Representations and Warranties. 
All representations and warranties made in any certificate furnished in
connection herewith shall be considered representations and warranties by
Mortgagor and shall survive the execution and delivery of this Mortgage.


 


[Signatures begin on following page]


 


23





















 


IN WITNESS WHEREOF, the Mortgagor has caused to be
executed by its duly authorized officer this instrument which is effective as
of the day and year first above written.


 


	
   

  	
  [NAME OF
  MORTGAGOR ALL CAPS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Paul Gridley 

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


S-1





















 


	
   

  	
  COLLATERAL
  AGENT, as trustee:

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL
  ASSOCIATION, not in its individual capacity,
  but solely as collateral agent, as trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


S-2





















 


ACKNOWLEDGMENT


 


	
  STATE OF NEW YORK)

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF NEW YORK)

  	
  )

  



 


BE IT REMEMBERED, that on the     day
of               ,
2004, before me, the undersigned, a Notary Public, duly qualified,
commissioned, sworn and acting in and for the County and State aforesaid,
personally appeared Paul Gridley, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the foregoing Amended and Restated First Preferred Ship Mortgage and
acknowledged to me that he executed the same in his capacity as Chief Executive
Officer for [NAME OF MORTGAGOR ALL CAPS], the limited liability company
described in the foregoing Amended and Restated First Preferred Ship Mortgage,
and that by his signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.


 


Witness my hand and official seal.


 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  
	
   

  	
   

  
	
  My Commission expires:

                 ,
  20

  	
   

  



 


S-3





















 


ACKNOWLEDGMENT


 


	
  STATE OF OHIO

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF CUYAHOGA

  	
  )

  



 


BEFORE ME, a Notary Public in and for said County and
State, personally appeared the above named KEYBANK NATIONAL ASSOCIATION,                             ,
its                                           ,
who acknowledged that he/she did sign the foregoing instrument and that the
same is his/her free act and deed personally and as such officer.


 


IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal at                         ,
Ohio, the     day of October, 2004.


 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  
	
   

  	
   

  
	
  My Commission expires:

                 ,
  20  

  	
   

  



 


S-4





















 


EXHIBIT
A


 


[FORM OF CREDIT
AGREEMENT]


 





















 


EXHIBIT
B


 


[FORM OF NOTES]


 





















 


EXHIBIT
C


 


[HEDGING CONFIRMATIONS]


 





















 


EXHIBIT
D(23)


 


[FORM OF GUARANTY]


 










(23)         Use for Chemical
Pioneer.


 























 


EXHIBIT H


 


FORM OF PLEDGE AGREEMENT AND
IRREVOCABLE PROXY


 


THIS PLEDGE AGREEMENT (this “Pledge
Agreement”), dated as of November 3, 2004, made by [U.S. SHIPPING PARTNERS
L.P.] [U.S. SHIPPING OPERATING
LLC] [USCS CHEMICAL PIONEER LLC] [USS CHARTERING LLC] [USCS CHARLESTON
CHARTERING LLC], a Delaware limited [partnership] [liability
company] (together
with its permitted successors and assigns, the “Pledgor”),
in favor of KEYBANK
NATIONAL ASSOCIATION, acting in its capacity as collateral agent (in
such capacity including in its capacity as a securities intermediary (either
directly or indirectly through its affiliate McDonald Investments, Inc.), as
defined in the U.C.C. (as defined below), and together with its successors and
assigns in such capacities, the “Collateral Agent”)
under the Credit Agreement referenced below for the benefit of the Secured
Parties (as defined below).


 


W I  T  N  E
S  S  E  T  H:


 


WHEREAS, pursuant to a Second Amended and Restated
Credit Agreement, dated as of November 3, 2004 (together with all
amendments, supplements, restatements and other modifications, if any, from
time to time thereafter made thereto, the “Credit
Agreement”), among the Pledgor, [U.S. Shipping Partners L.P., a
Delaware limited partnership,] [U.S. Shipping Operating LLC,] ITB Baltimore LLC, ITB Groton LLC,
ITB Jacksonville LLC,
ITB Mobile LLC,
ITB New York LLC, ITB
Philadelphia LLC, [USS
Chartering LLC,]
USCS Chemical Chartering LLC, [USCS Chemical Pioneer LLC, USCS Charleston
Chartering LLC,] USCS Charleston LLC, and USCS ATB LLC, each a Delaware limited
liability company (each of the foregoing entities individually a “Borrower” and collectively, the “Borrowers”), the various financial
institutions as are or may become parties thereto (collectively, the “Lenders”), Canadian Imperial Bank of
Commerce, as letter of credit issuer (in such capacity together with its
successors in such capacity, the “Letter of Credit Issuer”) and as
administrative agent for the Lenders (in such capacity together with its
successors in such capacity, the “Administrative Agent”), and the
Collateral Agent, the Lenders have extended Commitments to make Credit
Extensions to the Borrowers;


 


WHEREAS, the Borrowers have entered into or may enter
into certain Hedge Agreements with Secured Hedge Counterparties, pursuant to
the terms of the Credit Agreement;


 


WHEREAS, as a condition precedent to the making of the
Loans and the issuance of the Letters of Credit under the Credit Agreement, and
to the extension of financial accommodations under the Hedge Agreements
referred to above, the Pledgor is required to execute and deliver this Pledge
Agreement;


 


WHEREAS, the Pledgor has duly authorized the
execution, delivery and performance of this Pledge Agreement;


 


WHEREAS, it is in the best interests of the Pledgor to
execute this Pledge Agreement inasmuch as the Pledgor will derive substantial
direct and indirect benefits from the Loans made


 





















 


from time to time to, and the Letters of Credit issued on behalf of,
the Borrowers by the Lenders and/or the Letter of Credit Issuer pursuant to the
Credit Agreement and the financial accommodations made from time to time to the
Borrowers by Secured Hedge Counterparties pursuant to the Hedge Agreements; and


 


WHEREAS, the Pledgor is the sole member [or
shareholder](1) of each of the Pledged Interests Issuers (as defined below).










(1)           Use
for Pledge by U.S. Shipping Operating LLC.


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and in order to
induce the Lenders and the Letter of Credit Issuer to make Loans to, and/or
issue or participate in Letters of Credit for the account of, the Borrowers
pursuant to the Credit Agreement and to induce the Secured Hedge Counterparties
to extend financial accommodations pursuant to the Secured Hedge Agreements,
the Pledgor hereby agrees, for the benefit of each Secured Party, as follows:


 


ARTICLE
I

DEFINITIONS


 


SECTION 1.1         Certain Terms.  The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):


 


“Administrative Agent”
is defined in the first recital.


 


“Collateral”
is defined in Section 2.1.


 


“Collateral Agent”
is defined in the preamble.


 


“Credit Agreement”
is defined in the first recital.


 


“Distributions”
means all cash distributions made in respect of the Pledged Interests, whether
or not income, return of capital or otherwise, and all other distributions
(whether similar or dissimilar to the foregoing) on or with respect to any
Pledged Interests or other rights or interests constituting Collateral.


 


[“Guaranty”
means that certain Guaranty in favor of the Collateral Agent executed and
delivered by Pledgor dated as of even date herewith.](2)










(2)           Use for Pledge by
Chemical Pioneer and any other Pledgor that delivers a Guaranty.


 


“Indemnified Parties”
is defined in Section 6.5(a).


 


“Lender” is
defined in the first recital.


 


2





















 


“Letter of Credit Issuer”
is defined in the first recital.


 


“Pledge Agreement”
is defined in the preamble.


 


“Pledged Interests Issuer”
and “Pledged Interests Issuers” means
each Person identified in Item B of Attachment 1
hereto as the issuer of the Pledged Interests identified opposite the name of
such Person.


 


“Pledged Interests”
means all member interests, general or limited partnership interests, stock or
other ownership interests of any Pledged Interests Issuer; all member interests,
general or limited partnership interests, stock or other ownership interests
issued by Pledgor’s subsidiaries; all registrations, certificates, articles or
agreements governing or representing any such interests; all options and other
rights, contractual or otherwise, at any time existing with respect to such
interests; and all distributions, cash, instruments and other property now or
hereafter received, receivable or otherwise distributed in respect of or in
exchange for any or all of such interests.


 


“Pledged Note Issuer”
means each Person identified in Item A of Attachment
1 hereto as the issuer of the Pledged Notes identified opposite the
name of such Person.


 


“Pledged Notes”
means all promissory notes of any Pledged Note Issuer in the form or substantially
in the form of Exhibit A hereto which
are delivered by the Pledgor to the Collateral Agent as Pledged Property
hereunder, as such promissory notes, in accordance with Section 7.2, are amended, modified or
supplemented from time to time and together with any promissory note of any
Pledged Note Issuer taken in extension or renewal thereof or substitution
therefor.


 


“Pledged Property”
means all Pledged Interests, all Pledged Notes, and all other pledged
partnership or membership interests or promissory notes, all other securities,
all assignments of any amounts due or to become due, and all other instruments
which are now being delivered by the Pledgor to the Collateral Agent or may
from time to time hereafter be delivered by the Pledgor to the Collateral Agent
for the purpose of pledge under this Pledge Agreement or any other Loan
Document or Hedge Agreement; and all proceeds of any of the foregoing.


 


“Pledgor” is
defined in the preamble.


 


“Secured Hedge Agreements”
means each Hedge Agreement entered into by a Borrower with a Secured Hedge
Counterparty.


 


“Secured Obligations”
is defined in Section 2.2.


 


“Secured Party”
means, as the context may require, any and all of the Administrative Agent, the
Collateral Agent, any Secured Hedge Counterparty, the Letter of Credit Issuer,
and any Lender, and each of their respective successors, transferees and
assigns.


 


“Securities Act”
is defined in Section 6.2.


 


“U.C.C.” means
the Uniform Commercial Code, as in effect in the State of New York, as the same
may be amended from time to time.


 


3





















 


SECTION 1.2         Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.


 


SECTION 1.3         U.C.C. Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings.


 


ARTICLE
II

PLEDGE


 


SECTION 2.1         Grant of Security Interest.  The Pledgor hereby pledges, hypothecates,
assigns, charges, mortgages, delivers, and transfers to the Collateral Agent,
for its benefit and the ratable benefit of each of the Secured Parties, and
hereby grants to the Collateral Agent, for its benefit and the ratable benefit
of each of the Secured Parties, a continuing security interest in all of the
Pledgor’s right, title and interest, whether now owned or hereafter arising or
acquired, in and to the following property (the “Collateral”):  (a) all Pledged Notes; (b) all other Pledged
Notes issued from time to time; (c) all Pledged Interests; (d) all other
Pledged Interests issued from time to time; (e) all other Pledged Property,
whether now or hereafter delivered to the Collateral Agent in connection with
this Pledge Agreement, including, without limitation, all rights in any organic
documents of the Pledged Interests Issuers (including, without limitation, any
voting and management rights arising thereunder or at law), all rights to
profits, income, surplus, compensation, return of capital, distributions and
other reimbursements and payments from the Pledged Interests Issuers (including
upon dissolution) in respect of all stock, membership or other equity interests
now owned or hereafter acquired by the Pledgor in the Pledged Interests Issuers
and in respect of the Pledgor’s accounts, general intangibles and other rights
to payment or reimbursement now existing or hereafter acquired from the Pledged
Interests Issuers existing or arising from loans, advances or other extensions
of credit or services rendered by the Pledgor to or for the account of the
Pledged Interests Issuers; (f) all Distributions, interest, and other payments
and rights with respect to any Pledged Property; and (g) all proceeds of any of
the foregoing.


 


SECTION 2.2         Security for Obligations.  This Pledge Agreement secures the
indefeasible payment and performance in full of all Obligations now or
hereafter existing under the Credit Agreement, the Notes, [the Guaranty,](3)
the Secured Hedge Agreements and each other Loan Document, whether for
principal, interest, costs, fees, expenses, or otherwise, and all other
obligations of any Borrower or any other Loan Party to any Secured Party
pursuant to any of the Transaction Documents, now or hereafter owing, howsoever
created, arising or evidenced, whether direct or indirect, primary or
secondary, fixed or absolute or contingent, joint or several, regardless of how
evidenced or arising, including, without limitation, all Hedging Obligations
arising under any Hedge Agreement between any Borrower and any Affiliate of any
Borrower, on the one hand, and any Secured Hedged Counterparty, on the other hand,
howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent or now or hereafter










(3)           Use for Pledge by
Chemical Pioneer and any other Pledgor that delivers a Guaranty.


 


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existing or due or to become due (all such Obligations and such other
obligations of the Borrowers being collectively referred to as the “Secured Obligations”).


 


SECTION 2.3         Delivery of Pledged Property.


 


(a)           All
certificates or instruments representing or evidencing any Collateral,
including all Pledged Interests and all Pledged Notes, shall be delivered to
and held by or on behalf of (and, in the case of the Pledged Notes, endorsed to
the order of) the Collateral Agent pursuant hereto, shall be in suitable form
for transfer by delivery, and shall be accompanied by all necessary
endorsements or instruments of transfer or assignment, duly executed in blank.


 


(b)           To
the extent any of the Collateral constitutes a “certificated security” (as
defined in Section 8-102(a)(4) of the U.C.C.), an “uncertificated security” (as
defined in Section 8-102(a)(18) of the U.C.C.) or a “security entitlement” (as
defined in Section 8-102(a)(17) of the U.C.C.), the Pledgor shall cause the
issuer thereof or the securities intermediary thereof to take all actions
necessary or as requested by the Collateral Agent to grant “control” (as
defined in Section 8-106 of the U.C.C.) of such Collateral to the Collateral
Agent over such Collateral.


 


SECTION 2.4         Distributions on Pledged Interests.  In the event that any Distribution is to be
paid on any Pledged Interests at a time when no Event of Default has occurred
and is continuing, such Distribution or payment may be paid directly to the
Pledgor.  If any such Event of Default
has occurred and is continuing, then any such Distribution or payment shall be
paid directly to the Collateral Agent, for its benefit and the ratable benefit
of each of the Secured Parties; provided that the Collateral Agent shall
release upon request by MLP any Distribution paid directly to the Collateral
Agent pursuant hereto that is required by the MLP to permit the MLP to make
(and solely for the purpose of making) Distributions to the MLP’s unitholders
to the extent such Distributions are permitted to be made by the MLP on the
date of such release pursuant to Section 7.2.6(b) of the Credit Agreement; provided further, that such Distribution or
payment may continue to be paid to Pledgor solely for the purpose of paying the
operating expenses of the MLP and its Subsidiaries (including, without
limitation, reimbursing General Partner for operating expenses) incurred in the
ordinary course of business as long as concurrently with such payment or
Distribution, a notice setting forth in reasonable detail the amount and purpose
of such Distribution or payment is provided to the Collateral Agent.


 


SECTION 2.5         Continuing Security Interest.  This Pledge Agreement shall create a
continuing security interest in the Collateral and shall: (a) remain in full
force and effect until indefeasible payment in full in cash of all Secured
Obligations and the termination or expiration of all Commitments and all other
commitments of the Secured Parties to the Borrowers under the Loan Documents,
including, without limitation, the Secured Hedge Agreements, and the
termination or expiration of all Letters of Credit; (b) be binding upon the
Pledgor and its successors, transferees and assigns; and (c) inure, together
with the rights and remedies of the Collateral Agent hereunder, to the benefit
of the Collateral Agent and each other Secured Party and their respective
successors, transferees, and assigns. 
Without limiting the generality of the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any Note or any Loan held by it as
provided in Section 10.11.1 of the
Credit Agreement and any Secured Hedge Counterparty may assign or otherwise
transfer (in whole or in part) its interest pursuant to any Secured Hedge
Agreement, and any successor or assignee thereof shall


 


5





















 


thereupon become vested with all of the rights and benefits in respect
thereof granted to such Secured Party under any such Loan Document including
any Secured Hedge Agreement (including this Pledge Agreement), or otherwise,
subject, however, to any contrary provisions in such assignment or transfer,
and as applicable to the provisions of Section
10.11.1 and Article IX of
the Credit Agreement.  Upon the
indefeasible payment in full of all Secured Obligations and the termination or
expiration of all Commitments and any other commitments of any Secured Party to
any Borrower under the Loan Documents, including, without limitation, the
Secured Hedge Agreements and the termination or expiration of all Letters of
Credit, the security interest granted herein shall terminate and all rights to
the Collateral shall revert to the Pledgor. 
Upon any such payment and termination or expiration, the Collateral
Agent will, at the Pledgor’s sole expense, deliver to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all
certificates and instruments representing or evidencing all Pledged Interests
and all Pledged Notes, together with all other Collateral held by the
Collateral Agent hereunder, and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.


 


SECTION 2.6         Security Interest Absolute.  All rights of the Collateral Agent
and the other Secured Parties and the security interests granted to the
Collateral Agent and the other Secured Parties hereunder, and all obligations
of the Pledgor hereunder, shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement or any other
Transaction Document; (b) the failure of any Secured Party or any other holder
of any Note, (i) to assert any claim or demand or to enforce any right or
remedy against any Borrower or any other Person under the provisions of the
Credit Agreement, any other Transaction Document or otherwise, or (ii) to
exercise any right or remedy against any other guarantor of, or collateral
securing, any Secured Obligations; (c) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Secured Obligations
or any other extension, compromise or renewal of any Secured Obligation; (d)
any reduction, limitation, impairment or termination of any Secured Obligations
for any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Pledgor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations; (e) any amendment to, rescission, waiver,
or other modification of, or any consent to departure from, any of the terms of
the Credit Agreement or any other Transaction Document; (f) any addition,
exchange, release, surrender, or non-perfection of any collateral (including
the Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Borrower, any other
Loan Party, any surety or any guarantor.


 


SECTION 2.7         Waiver of Subrogation.  Until one year and one day after the
indefeasible payment in full of all Obligations and the termination or
expiration of all Commitments and all other commitments of the Secured Parties
under the Loan Documents, including, without limitation, the Secured Hedge Agreements,
and the termination or expiration of all Letters of Credit, the Pledgor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against any Borrower or any other Loan Party that arise from the


 


6





















 


existence, payment, performance or enforcement of the Pledgor’s
obligations under this Pledge Agreement or any other Loan Document or Secured
Hedge Agreement, including any right of subrogation, reimbursement, exoneration
or indemnification, any right to participate in any claim or remedy of any
Secured Party against any Borrower or any other Loan Party or any collateral
which any Secured Party now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including the right to take or receive from any Borrower or any other Loan
Party, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights.  If any amount shall be paid to the Pledgor in
violation of the preceding sentence and the Secured Obligations shall not have
been indefeasibly paid in full in cash and all Commitments and all other
commitments by any Secured Party to any Borrower under the Loan Documents,
including, without limitation, the Secured Hedge Agreements, have not expired
or terminated and all Letters of Credit have not expired or terminated, then
such amount shall be deemed to have been paid to the Pledgor for the benefit
of, and held in trust for, the Collateral Agent (on behalf of the Secured
Parties), and shall forthwith be paid to the Collateral Agent to be credited
and applied upon the Secured Obligations, whether matured or unmatured.  The Pledgor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
the Credit Agreement and that the waiver set forth in this Section is knowingly
made in contemplation of such benefits.


 


ARTICLE
III

REPRESENTATIONS AND WARRANTIES


 


SECTION 3.1         Warranties, etc.  The Pledgor represents and warrants unto
each Secured Party, as of the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Interests and each pledge and
delivery of Pledged Notes) by the Pledgor to the Collateral Agent of any
Collateral, as set forth in this Article III.


 


SECTION 3.2         Ownership, No Liens, etc.  The Pledgor is the legal and beneficial owner
of, and has good and valid title to (and has full right and authority to
pledge and assign) the Collateral, free and clear of all Liens, security
interests, options, or other charges or encumbrances, except any Lien or
security interest granted pursuant hereto in favor of the Collateral Agent and
except as permitted by the Credit Agreement.


 


SECTION 3.3         Valid Security Interest.  The delivery of the Collateral to the
Collateral Agent is effective to create a valid, perfected security interest in
the Collateral and subject to the limitations contained in Section 9-315 of the
UCC, all proceeds thereof and securing the Secured Obligations and such
security interest shall be a first priority security interest in the
Collateral.  No filing or other action
will be necessary to perfect or protect such security interest.  The Pledgor owns no real property.


 


SECTION 3.4         As to Pledged Interests.  The Pledged Interests constitute one hundred
percent (100%) of the Pledgor’s interest in the Pledged Interests Issuer and
one hundred percent (100%) of the total membership and/or other equity interests
in the Pledged Interests Issuer.  After
giving effect to the consummations of the transactions contemplated by the
Contribution Agreement, the Pledgor has no Subsidiaries other than the Pledged
Interests Issuers.  The Pledged Interests
are duly registered in the permanent ownership records of the Pledged Interests


 


7





















 


Issuer maintained in the principal office of such issuer.  Such registration continues valid and genuine
and has not been altered.  All Pledged
Interests have been duly authorized and validly issued and registered, are
fully paid and non-assessable, and were not issued in violation of the
preemptive rights, if any, of any Person or of any agreement by which the
Pledgor or any Pledged Interest Issuer is bound.  All documentary, stamp or other taxes or fees
owing in connection with the registration, issuance, transfer or pledge of
Collateral have been paid.  No restrictions
or conditions exist with respect to the registration, transfer, voting or
capital of any Pledged Interests.  The
Pledgor has no outstanding rights, rights to subscribe, options, warrants or
convertible securities outstanding or any other rights outstanding whereby any
Person would be entitled to acquire any member interests or other equity
interests of any Pledged Interests Issuer. 
All requisite formalities for the granting of a security interest in the
Pledged Interests required pursuant to the organic documents of the Pledgor or
the Pledged Interests Issuers have been complied with on or prior to the
execution and delivery of this Pledge Agreement.


 


SECTION 3.5         As to Pledged Notes.  Each Pledged Note has been duly authorized,
executed, endorsed, issued and delivered, and is the legal, valid and binding
obligation of the issuers thereof, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and
general principles of equity, and is not in default.


 


SECTION 3.6         Authorization, Approval, etc.  No authorization, approval, or other action
by, and no notice to or filing with, any governmental authority, regulatory
body or any other Person is required (a) for the pledge by the Pledgor of any
Collateral pursuant to this Pledge Agreement or for the execution, delivery,
and performance of this Pledge Agreement by the Pledgor; or (b) for the
perfection of or for the exercise by the Collateral Agent of the voting or
other rights provided for in this Pledge Agreement, or for the remedies in
respect of the Collateral pursuant to this Pledge Agreement, except as may be
required in connection with a disposition of such Pledged Interests by laws and
regulations affecting the offering and sale of securities generally.


 


SECTION 3.7         Delivery
of Certificates.  All membership or
other equity interests in each Pledged Interests Issuer that are represented by
certificates have been delivered to the Collateral Agent, together with
transfer documents as required in this Pledge Agreement, and the Pledgor hereby
covenants and agrees that any certificates or instruments evidencing any
membership or other equity interests in each Pledged Interests Issuer hereafter
received by the Pledgor will be held in trust for the Collateral Agent and
promptly delivered to the Collateral Agent.


 


SECTION 3.8         State of Organization, Formation or Incorporation;
Location, Name.  (a) The first
paragraph of this Pledge Agreement lists the true legal name of the Pledgor as
registered in the jurisdiction in which the Pledgor is formed, (b) the
Pledgor’s state of formation, its identification number as designated by the
state of its formation, and its place(s) of business (or, if it has more than
one place of business, its chief executive office) are as set forth on Attachment 2 hereto, (c) the Pledgor’s
location within the meaning of Section 9-307 of the U.C.C. is the State of
Delaware and (d) the Pledgor is not now and has not been known by any trade
name.


 


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ARTICLE
IV

COVENANTS


 


SECTION 4.1         Certain
Covenants.  The Pledgor hereby
covenants and agrees that, so long as any portion of the Secured Obligations
shall remain unpaid or any Secured Party shall have any outstanding Commitment
or any other commitment to any Borrower under any Loan Document, including,
without limitation, any Secured Hedge Agreement, or any Letter of Credit shall
remain outstanding, the Pledgor will perform the obligations set forth in this Article
IV.


 


SECTION 4.2         Protect Collateral; Further Assurances, etc.  Except as permitted by Sections 7.2.10 and
7.2.11 of the Credit Agreement, the Pledgor will not sell, assign (by operation
of law or otherwise), transfer, pledge, or encumber in any other manner or
otherwise dispose of the Collateral.  The
Pledgor will warrant and defend the right and title herein granted to the
Collateral Agent in and to the Collateral (and all right, title, and interest
represented by the Collateral) against the claims and demands of all Persons
whomsoever.  The Pledgor agrees that at
any time, and from time to time, at the reasonable expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary, or that the Collateral Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.  The Pledgor agrees that
without the prior written consent of the Collateral Agent, in its sole and
absolute discretion, it will not permit the Pledged Interests Issuer, or vote
its interest in the Pledged Interests in a way that allows any Pledged
Interests Issuer, except as permitted by Section
4.7(a), to make any amendments to the articles of organization or
operating agreement, limited liability company agreement or other organic
agreement of any Pledged Interests Issuer. 
The Pledgor agrees that, upon the acquisition after the date hereof by
the Pledgor of any Collateral, with respect to which the security interest
granted hereunder is not perfected automatically upon such acquisition, the
Pledgor will take such actions with respect to such Collateral or any part thereof
as required by the Loan Documents.


 


SECTION 4.3         Certificates,
etc.


 


(a)           The Pledgor agrees that all
certificates or other instruments evidencing Pledged Interests delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed
undated blank transfer powers, in substantially the form attached hereto as Attachment 3, or other equivalent instruments
of transfer acceptable to the Collateral Agent acting reasonably.  The Pledgor will, from time to time upon the
reasonable request of the Collateral Agent, promptly deliver to the Collateral
Agent duly executed undated blank transfer powers in substantially the form
attached hereto as Attachment 3,
instruments, and similar documents, reasonably satisfactory in form and
substance to the Collateral Agent, with respect to the Collateral as the
Collateral Agent may reasonably request and will, from time to time upon the
request of the Collateral Agent after the occurrence of any Default or Event of
Default, promptly transfer any Pledged Interests into the name of any nominee
designated by the Collateral Agent.


 


(b)           The Pledgor agrees that (i) the
Collateral Agent may notify any Pledged Interests Issuer of the existence of
this Pledge Agreement by having such Pledged


 


9





















 


Interests Issuer acknowledge the Notice of Pledge
Agreement attached hereto as Attachment 4
immediately after the execution and delivery of this Pledge Agreement and (ii)
it will keep, at its address so indicated below its signature hereto, all of
its records concerning the Collateral, which records will be of such character
as will enable the Collateral Agent or its designees to determine at any time
the status thereof.


 


SECTION 4.4         Continuous Pledge.  Subject to Section 2.4,
the Pledgor will, at all times, keep pledged to the Collateral Agent pursuant
hereto all Pledged Interests and all other Collateral, all Distributions with
respect thereto, and all other Collateral and other securities, instruments,
proceeds, and rights from time to time received by or distributable to the
Pledgor in respect of any Collateral, free and clear of all Liens, security
interests, options, or other charges or encumbrances, except any Lien or
security interest granted pursuant hereto in favor of the Collateral Agent and
except as permitted by the Credit Agreement.


 


SECTION 4.5         Voting Rights; Distributions, Irrevocable Proxy,
etc.  The Pledgor agrees:


 


(a)           if any Event of Default shall have
occurred and be continuing, promptly upon receipt thereof by the Pledgor upon
the request of the Collateral Agent, to deliver (properly endorsed where
required hereby or requested by the Collateral Agent) to the Collateral Agent
all Distributions, all interest, all principal, all other cash payments, and
all proceeds of the Collateral, all of which shall be held by the Collateral
Agent as additional Collateral for use in accordance with Section 6.4; provided  that
the Collateral Agent shall release upon request by MLP any Distribution paid
directly to the Collateral Agent pursuant hereto that is required by MLP to
permit MLP to make (and solely for the purpose of making) Distributions to the
MLP’s unitholders to the extent such Distributions are permitted to be made by
the MLP on the date of such release pursuant to Section 7.2.6(b) of the Credit
Agreement; provided further, that such
Distribution or payment may continue to be paid to Pledgor solely for the
purpose of paying the operating expenses of the MLP and its Subsidiaries
(including, without limitation, reimbursing General Partner for operating
expenses) incurred in the ordinary course of business as long as concurrently
with such payment or Distribution, a notice setting forth in reasonable detail
the amount and purpose of such Distribution or payment is provided to the
Collateral Agent; and


 


(b)           if any Event of Default shall have
occurred and be continuing and the Collateral Agent has notified the Pledgor of
the Collateral Agent’s intention to exercise its voting power under this Section 4.5, (i) the Collateral Agent may
exercise (to the exclusion of the Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged Interests or other
shares of capital stock constituting Collateral, AND THE PLEDGOR HEREBY GRANTS THE COLLATERAL
AGENT AN IRREVOCABLE PROXY, EXERCISABLE UNDER SUCH CIRCUMSTANCES, TO VOTE THE
PLEDGED INTERESTS AND SUCH OTHER COLLATERAL, WITH SUCH PROXY TO REMAIN VALID
UNTIL THE INDEFEASIBLE PAYMENT IN FULL OF ALL SECURED OBLIGATIONS, THE
TERMINATION OR EXPIRATION OF ALL COMMITMENTS AND THE


 


10





















 


TERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT, and (ii) promptly to deliver to the
Collateral Agent such additional proxies and other documents as may be
necessary to allow the Collateral Agent to exercise such voting power and other
incidental rights.


 


All Distributions, interest, principal, cash payments,
and proceeds which may at any time and from time to time be held by the Pledgor
but which the Pledgor is then obligated to deliver to the Collateral Agent,
shall, until delivery to the Collateral Agent, be held by the Pledgor separate
and apart from its other property in trust for the Collateral Agent.  The Collateral Agent agrees that unless an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have given the notice referred to in Section 4.5(b),
the Pledgor shall have the exclusive right to vote and exercise all other
incidental rights of ownership with respect to all of the Pledged Interests,
and the Collateral Agent shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise such voting power and incidental rights; provided,
however, that no vote shall be cast, or
consent, waiver, or ratification given, or action taken by the Pledgor that
would cause a Default or an Event of Default, impair any Collateral or be
inconsistent with or violate any provision of the Credit Agreement or any other
Loan Document (including this Pledge Agreement).


 


SECTION 4.6         Status of Pledged Interests.  The registration of the Pledged Interests on
the permanent ownership records of the Pledged Interests Issuers shall at all
times be valid and genuine and shall not be altered.  The Pledged Interests at all times shall be
duly authorized, validly registered, fully paid, and non-assessable, and shall
not be registered in violation of the organic documents of the Pledgor or the
preemptive rights of any Person, if any, or of any agreement by which Pledgor
or any Pledged Interests Issuer is bound.


 


SECTION 4.7         Additional Undertakings.  The Pledgor will not, without the prior
written consent of the Collateral Agent:


 


(a)           enter into any agreement amending,
supplementing, or waiving any provision of any Pledged Interests or Pledged
Notes (including any Organic Document or regulations to which such Pledged
Interests relate or the underlying instrument pursuant to which such Pledged
Note is issued) or compromising or releasing or extending the time for payment
of any obligation of the maker thereof, provided
that the foregoing shall not be deemed to prohibit any amendment to an Organic
Document which would not result in impairment of any Collateral or which would
not have a Material Adverse Effect;


 


(b)           take or omit to take any action the
taking or the omission of which would result in any impairment or alteration of
any obligation of any Borrower in respect of any Pledged Interests constituting
Collateral or of the maker of any Pledged Note or other instrument constituting
Collateral;


 


(c)           cause or permit any change to be made
in its name, identity, corporate structure or state of incorporation or
formation, or any change to be made to a jurisdiction other than as represented
in (i) the location of any Collateral, (ii) the location of any


 


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records concerning any Collateral or (iii) in the
location of its place of business (or, if it has more than one place of
business, its chief executive office), unless Pledgor shall have notified the
Collateral Agent of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken all action, if any, reasonably
required by the Collateral Agent for the purpose of further perfecting or
protecting the security interest in favor of the Collateral Agent in the
Collateral;


 


(d)           permit the issuance of (i) any
additional membership or other equity interests or units of any class of member
interests or units of any Pledged Interests Issuer (unless immediately upon
such issuance the same are pledged and delivered to the Collateral Agent
pursuant to the terms hereof), (ii) any securities convertible voluntarily
by the holder thereof or automatically upon the occurrence or non-occurrence of
any event or condition into, or exchangeable for, any membership or other
equity interests or units of any Pledged Interests Issuer (unless immediately
upon such issuance the same are pledged and delivered to the Collateral Agent
pursuant to the terms hereof), or (iii) any warrants, options, contracts
or other commitments entitling any Person to purchase or otherwise acquire any
such interests or units; or


 


(e)           enter into any agreement creating, or
otherwise permit to exist, any restriction or condition upon the transfer,
voting or control of any Pledged Interests, except as contained in the Organic
Documents in effect as of the date hereof and restrictions on transfers imposed
by Federal and state securities laws;


 


provided, however,
to the extent that the same is undertaken in connection with the conversion of
USCS Chemical Pioneer LLC to a corporation (the “Conversion”) or a merger of
USS Chartering LLC and USCS Charleston Chartering LLC (the “Merger”), as
permitted under and in accordance with the terms of Section 7.2.10 of the
Credit Agreement, the Pledgor may take the actions described in clauses (a),
(b), (c) (subject to the notice requirement thereof in the case of the Merger),
(d) and (e) above without the prior written consent of the Collateral Agent so
long as:  (i) within 30 days
following the Conversion or Merger, Pledgor delivers to the Collateral Agent
all Organic Documents of the surviving entity following the consummation of the
Conversion or Merger; (ii) contemporaneously with the Conversion or
Merger, Pledgor pledges and delivers to the Collateral Agent any and all stock
or membership or other equity interests of any class of stock or member
interests or units issued to the Pledgor by the surviving entity following the
consummation of the Conversion or Merger; (iii) Pledgor takes all actions
necessary, or as reasonably requested, by the Collateral Agent, in order to
perfect, or maintain perfection of, or protect the security interest in favor
of the Collateral Agent in the Collateral, including without limitation, the
filing of U.C.C. financing statements or continuations or amendments thereto;
and (iv) the consummation of the Conversion or Merger would not impair the
Collateral Agent’s rights in the Collateral.


 


The Pledgor shall provide, or cause the relevant Pledged Interests
Issuer to provide, the Collateral Agent with a copy of any amendment or
supplement to, or modification or waiver of, any term or provision of any of
the by-laws and other Organic Documents of the Pledged Interests Issuers, provided that the Pledgor shall not enter
into any such amendment, supplement, modification or waiver other than any
amendment, modification, supplement, or waiver which


 


12





















 


would not result in impairment of any Collateral or which would not
have a Material Adverse Effect without the prior written consent of the
Collateral Agent.


 


SECTION 4.8         Filings.  The Pledgor hereby authorizes the Collateral
Agent to file U.C.C. financing statements, continuations and amendments with
respect to the Collateral describing the collateral property as “all personal
property” or words of similar import, and to file U.C.C. financing statements,
and continuations and amendments thereto, and other similar documents with
respect to the Collateral without its signature (to the extent permitted by
applicable law).


 


ARTICLE
V

THE COLLATERAL AGENT


 


SECTION 5.1         Collateral Agent Appointed Attorney-in-Fact.  The Pledgor hereby irrevocably appoints the
Collateral Agent as the Pledgor’s attorney-in-fact, with full authority in the
place and stead of the Pledgor and in the name of the Pledgor or otherwise,
from time to time in the Collateral Agent’s discretion, to take any action and
to execute any instrument which the Collateral Agent acting reasonably may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including, without limitation: (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper in
connection with clause (a) above; (c)
to file any claims or take any action or institute any proceedings which the
Collateral Agent acting reasonably may deem necessary or advisable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and (d) to perform the
affirmative obligations of the Pledgor hereunder (including all obligations of
the Pledgor under Section 4.7).  The Pledgor hereby acknowledges, consents and
agrees that the power of attorney granted pursuant to this Section 5.1 is irrevocable and coupled with
an interest.


 


SECTION 5.2         Collateral Agent May Perform.  If the Pledgor fails to perform any agreement
contained herein, then the Collateral Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Pledgor pursuant
to Section 6.5, and the Collateral
Agent may from time to time take any other action which the Collateral Agent
reasonably deems necessary for the maintenance, preservation or protection of
any of the Collateral or of its security interest therein.


 


SECTION 5.3         Collateral Agent Has No Duty.  The powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers.  Except for the exercise of
reasonable care over any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral or responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Property, whether or not the Collateral
Agent has or is deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.


 


13





















 


SECTION 5.4         Reasonable Care.  The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, that the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuation of any Default or Event of Default, but failure of the
Collateral Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.


 


SECTION 5.5         Collateral
Agent.  Notwithstanding any right,
power or remedy granted to the Collateral Agent herein, or at law, in equity,
admiralty or otherwise, the Collateral Agent will not take any action that
causes a violation of Section 2 or Section 9 of the Shipping Act of 1916, as
amended (the “Shipping Act”).  The Collateral Agent represents and warrants
unto each Secured Party that as of the date hereof it is a United States
Citizen within the meaning of Section 2 of the Shipping Act.  The Collateral Agent agrees that if to the
actual knowledge of its officers directly involved in the transactions the
subject of this Agreement the Collateral Agent is not or ceases to be a United
States citizen within the meaning of Section 2 of the Shipping Act, it will
resign as Collateral Agent in accordance with the provisions of the Loan
Documents.


 


ARTICLE
VI

REMEDIES


 


SECTION 6.1         Certain Remedies.  If any Event of Default shall have occurred
and be continuing:


 


(a)           The Collateral Agent may exercise in
respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all of the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may, without notice except as specified below
or, as required to be provided by the U.C.C., sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem commercially
reasonable.  The Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days’
prior notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification.  The Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.


 


(b)           The Collateral Agent may (i) transfer
all or any part of the Collateral into the name of the Collateral Agent or its
nominee, with or without disclosing that such Collateral is subject to the lien
and security interest hereunder, (ii) notify the parties obligated on any of
the Collateral to make payment to the Collateral Agent of any amount due or to
become due thereunder, (iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or any part
thereof, or compromise or


 


14





















 


extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party with
respect thereto, (iv) endorse any checks, drafts, or other writings in the
Pledgor’s name to allow collection of the Collateral, (v) take control of any
proceeds of the Collateral, and (vi) execute (in the name, place and stead of
the Pledgor) endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.


 


SECTION 6.2         Securities Laws.  (a) If the Collateral Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section 6.1, then the Pledgor agrees
that, upon the reasonable request of the Collateral Agent, the Pledgor will, at
its own expense:


 


(i)            execute and deliver, and cause each
issuer of the Collateral contemplated to be sold and the members, partners and
shareholders thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Collateral Agent (acting reasonably),
prudent to register such Collateral under the provisions of the Securities Act
of 1933, as from time to time amended (the “Securities
Act”), and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the Collateral
Agent (acting reasonably), are necessary or prudent, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; and


 


(ii)           use its commercially reasonable best
efforts to qualify the Collateral under the state securities or “Blue Sky” laws
and to obtain all necessary governmental approvals for the sale of the
Collateral, as requested by the Collateral Agent;


 


(b)           cause each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of the Securities
Act; and


 


(c)           do or cause to be done all such other
acts and things as may be necessary to make such sale of the Collateral or any
part thereof valid and binding and in compliance with applicable law.


 


The Pledgor further acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Collateral Agent or any Secured
Party by reason of the failure by the Pledgor to perform any of the covenants
contained in this Section 6.2 and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, then it shall pay, as liquidated damages and not as a penalty, an
amount equal to the value (as determined by an independent appraiser reasonably
acceptable to the Pledgor and the Administrative Agent) of the Collateral on
the date the Collateral Agent shall demand compliance with this Section.


 


15





















 


SECTION 6.3         Compliance with Restrictions.  The Pledgor agrees that in any sale of any of
the Collateral whenever an Event of Default shall have occurred and be
continuing, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority, and the Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Collateral Agent be liable nor accountable to the Pledgor for any discount
allowed by the reason of the fact that such Collateral is sold in compliance
with any such limitation or restriction.


 


SECTION 6.4         Application of Proceeds.  All cash proceeds received by the Collateral
Agent in respect of any sale of, collection from, or other realization upon,
all or any part of the Collateral shall be applied (after payment of any
amounts payable to the Collateral Agent pursuant to the Credit Agreement or Section
6.5 hereof) in whole or in part by the Collateral Agent, for its benefit
and the ratable benefit of the Secured Parties, against all or any part of the
Secured Obligations in the following order:


 


(i)            first:  to the payment and satisfaction of all costs
and expenses including, without limitation, attorneys’ fees, incurred by the
Collateral Agent and by the Administrative Agent in the enforcement and
administration of this Pledge Agreement and of any of the other Transaction
Documents;


 


(ii)           second:  to the payment and satisfaction of all the
other Secured Obligations consisting of costs, expenses, interest or fees on a
pro rata basis; and


 


(iii)          third: 
to the payment and satisfaction of all other Secured Obligations on a
pro rata basis.


 


Any surplus of such cash or cash proceeds held by the Collateral Agent
remaining after payment in full of all of the Secured Obligations, and the
termination or expiration of all Commitments and all other commitments of any
Secured Party to any Borrower under any Loan Document, including, without
limitation, any Secured Hedge Agreement, and the termination or expiration of
all Letters of Credit, shall be paid over to the Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.


 


SECTION 6.5         Expenses. 
Upon demand, the Pledgor will pay to the Collateral Agent the amount of
any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Collateral
Agent and any local counsel may incur in connection herewith, including,
without limitation, (i) the administration of this Pledge Agreement, the Credit
Agreement and each other Loan Document; (ii) the custody, preservation, use, or
operation of, or sale of, collection from, or other realization upon, any of
the Collateral; (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or any of


 


16





















 


the other Secured Party hereunder; or (iv) the failure by the Pledgor
to perform or observe any of the provisions hereof.


 


SECTION 6.6         Warranties. 
In any sale conducted pursuant hereto, the Collateral Agent may sell the
Collateral without giving any warranties or representations as to the Collateral.  The Collateral Agent may disclaim any
warranties of title or the like.  This
procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.


 


ARTICLE
VII

MISCELLANEOUS PROVISIONS


 


SECTION 7.1         Loan Document.  This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.


 


SECTION 7.2         Amendments, etc.  No amendment to or waiver of
any provision of this Pledge Agreement nor consent to any departure by the
Pledgor herefrom shall in any event be effective unless the same shall be in
writing and signed by the Collateral Agent (with the consent of the requisite
Lenders prior to the payment in full of the Credit Extensions and the
termination or expiration of the Commitments and the Letters of Credit and
thereafter with the consent of all the Secured Hedge Counterparties), and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it is given.


 


SECTION 7.3         Notices.  All notices
and other communications provided to any party hereto under this Pledge
Agreement shall be in writing or by facsimile and addressed, delivered or
transmitted to such party at its address or facsimile number set forth in the
Credit Agreement, or at such other address or facsimile number as may be
designated by such party in a notice to the other parties hereto.  Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted, with receipt electronically
confirmed.


 


SECTION 7.4         Headings.  The various
headings of this Pledge Agreement are inserted for convenience only and shall
not affect the meaning or interpretation of this Pledge Agreement or any
provisions hereof.


 


SECTION 7.5         Severability.  Any
provision of this Pledge Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Pledge Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


SECTION 7.6         Execution in Counterparts, Effectiveness, etc.  This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be executed by the
Pledgor and the Collateral Agent and be deemed to be an original and all of
which shall


 


17





















 


constitute together but one and the same agreement.  This Pledge Agreement shall become effective
when counterparts hereof executed on behalf of the Pledgor and the Collateral
Agent shall have been received by the Collateral Agent.


 


SECTION 7.7         Collateral Agent; Exculpation.  By accepting the benefits of this Pledge
Agreement, each Secured Party hereby appoints KeyBank National Association as
its collateral agent under and for purposes of this Pledge Agreement.  Each Secured Party authorizes KeyBank
National Association to act on behalf of such Secured Party under this Pledge
Agreement, to exercise such powers hereunder as are specifically delegated to
or required of the Collateral Agent by the terms hereof, together with such
powers as may be reasonably incidental thereto. 
Without limiting the provisions of the Credit Agreement, neither the
Collateral Agent nor the directors, officers, employees or agents thereof shall
be liable to any Secured Party (and each Secured Party will hold the Collateral
Agent harmless) for any action taken or omitted to be taken by it under this
Pledge Agreement, or in connection herewith or therewith, except for the
willful misconduct or gross negligence of the Collateral Agent, or responsible
for any recitals or warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Pledge Agreement, or for the
creation, perfection or priority of any Liens purported to be created by this
Pledge Agreement, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, or to make any inquiry
respecting the performance by the Pledgor of its obligations hereunder.


 


SECTION 7.8         Binding
on Successors, Transferees and Assigns; Assignment.  In addition to, and not  in limitation of, but subject to the
provisions of, Section 2.5, this Pledge Agreement shall be binding
upon the Pledgor and its successors, transferees and assigns and shall inure to
the benefit of and be enforceable by each Secured Party and each holder of a
Note and their respective successors, transferees and assigns (to the full
extent provided pursuant to Section 2.5); provided, however,
that the Pledgor may not assign any of its obligations hereunder without the
prior written consent of all Lenders.


 


SECTION 7.9         GOVERNING LAW.  THIS PLEDGE AGREEMENT SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION), EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OR PRIORITY OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.  This Pledge
Agreement, the Notes and the other Transaction Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.


 


SECTION 7.10       FORUM SELECTION AND CONSENT TO JURISDICTION.  ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF


 


18





















 


DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
COLLATERAL AGENT OR THE PLEDGOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, CITY AND STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND.  THE PLEDGOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.  THE PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.  THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. 
TO THE EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
PLEDGE AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS.


 


SECTION 7.11       WAIVER OF
JURY TRIAL.  EACH SECURED PARTY BY
ACCEPTING THE BENEFITS OF THIS PLEDGE AGREEMENT AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR THE
PLEDGOR.  THE PLEDGOR ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER TRANSACTION DOCUMENT TO WHICH
IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED


 


19





















 


PARTIES ENTERING INTO THIS PLEDGE AGREEMENT AND EACH OTHER TRANSACTION
DOCUMENT.


 


SECTION
7.12       NO ORAL AGREEMENTS.  THIS WRITTEN
PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.


 


THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.


 


SECTION 7.13       Filing as a Financing Statement.  At the option of the Collateral Agent, this
Pledge Agreement, or a carbon, photographic or other reproduction of this
Pledge Agreement or of any U.C.C. financing statement, continuations and amendments
thereto, covering all of the Collateral or any portion thereof shall be
sufficient as a U.C.C. financing statement and may be filed as such without the
signature of the Pledgor where and to the full extent permitted by applicable
law.


 


[SIGNATURES BEGIN ON FOLLOWING PAGE]


 


20





















 


IN WITNESS WHEREOF, each of the parties hereto have
caused this Pledge Agreement to be duly executed and delivered by its officers
thereunto duly authorized as of the date first above written.


 


	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  [U.S. SHIPPING PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  BY: US Shipping General Partner
  LLC, its general partner]

  
	
   

  	
  [U.S. SHIPPING OPERATING LLC]

  
	
   

  	
  [USCS CHEMICAL PIONEER LLC]

  
	
   

  	
  [USS CHARTERING LLC]

  
	
   

  	
  [USCS CHARLESTON CHARTERING LLC]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [c/o U.S. Shipping Partners L.P.](4)

  
	
   

  	
  399 Thornall Street

  
	
   

  	
  Edison, NJ 08837

  











(4)           Do not use for
Pledge Agreement delivered by U.S. Shipping Partners L.P.


 


S-1





















 


	
   

  	
  COLLATERAL
  AGENT:

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


S-2





















 


EXHIBIT A


 


PROMISSORY NOTE


 




	
  $

  	
  , 2004

  






 


FOR VALUE RECEIVED, the undersigned,               ,
a                
(the “Maker”), promises to pay to the
order of                       ,
a            (the “Payee”), [in equal         
installments, commencing          ,
20   to and including             ,
20  ,] the principal sum of                                        
UNITED STATES DOLLARS (U.S.$           ),
representing the aggregate principal amount of an intercompany loan made by the
Payee to the Maker.


 


The unpaid principal amount of this promissory note
(this “Note”) from time to time
outstanding shall bear interest at a rate of interest equal to             ,
which the Maker represents to be a lawful and commercially reasonable rate,
payable           , and all
payments of principal of and interest on this Note shall be payable in lawful
currency of the United States of America. 
All such payments shall be made by the Maker to an account established
by the Payee at                
and shall be recorded on the grid attached hereto by the holder hereof
(including the Collateral Agent as pledgee). 
Upon notice from the Collateral Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement, hereinafter defined) or an Event
of Default (as defined in the Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day funds,
to such other account as the Collateral Agent shall direct in such notice.


 


This Note is one of the Pledged Notes referred to in,
and evidences Indebtedness incurred pursuant to Section 7.2.2 of the Second
Amended and Restated Credit Agreement, dated as of November   ,
2004 (together with all amendments and other modifications, if any, from time
to time hereafter made thereto, the “Credit
Agreement”), among U.S. Shipping Partners L.P., a Delaware limited
partnership, U.S. Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC,
ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC,
USS Chartering LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC,
USCS Charleston Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a
Delaware limited liability company (collectively, the “Borrowers”), the various financial
institutions as are or may become parties thereto (collectively, the “Lenders”), Canadian Imperial Bank of
Commerce, as letter of credit issuer and as administrative agent for the
Lenders, and KeyBank National Association,
as collateral agent (in such capacity, together with its successors in such
capacity, the “Collateral Agent”) for
the Secured Parties (as defined in the Credit Agreement).  Upon the occurrence and continuance of an
Event of Default under the Credit Agreement, and notice thereof by the
Collateral Agent to the Maker, the Collateral Agent shall have all rights of
the Payee to collect and accelerate, and enforce all rights with respect to,
the Indebtedness evidenced by this Note. 
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.


 


Reference is made to the Credit Agreement for a
description of the Pledge Agreement pursuant to which this Note has been
pledged to the Collateral Agent as security for the Obligations outstanding
from time to time under the Credit Agreement and each other Loan Document.


 


Exhibit A-1





















 


In addition to, but not in limitation of, the
foregoing, the Maker further agrees to pay all reasonable expenses, including
reasonable attorneys’ fees and legal expenses, incurred by the holder
(including the Collateral Agent as pledgee) of this Note endeavoring to collect
any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.


 


THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY
CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANY OTHER JURISDICTION).


 


THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED ON THIS NOTE.  THE
MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.


 


	
   

  	
  [Name of Maker]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Pay to the order of KeyBank National Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


Exhibit A-2





















 


GRID


 


Intercompany Loans made by                
to         and payments of principal of such
Loans.


 


	
  Date

  	
   

  	
  Amount of

  Intercompany Loan

  	
   

  	
  Amount of

  Principal

  Payment

  	
   

  	
  Outstanding

  Principal

  Balance

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Exhibit A-3





















 


Attachment 1

to

Pledge Agreement


 


ITEM A.  PLEDGED NOTES


 


Pledged Note Issuer Description


 


None.


 


ITEM B.  PLEDGED INTERESTS


 


	
  Pledged Interests Issuer

  	
   

  	
  Authorized

  Interests

  	
   

  	
  Outstanding

  Interests

  	
   

  	
  % of Interests Pledged

  	
   

  
	
  [U.S. Shipping
  Operating LLC](5)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of U.S. Shipping Operating LLC

  	
   

  
	
  [USCS Chemical
  Chartering LLC](6)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USCS Chemical Chartering LLC

  	
   

  
	
  [USS Chartering
  LLC](7)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USS Chartering LLC

  	
   

  











(5)           For
Pledge by U.S. Shipping Partners L.P.


(6)           For
Pledge by USCS Chemical Pioneer LLC.


(7)           For Pledge by U.S.
Shipping Operating LLC.


 


Attachment 1-1





















 


	
  Pledged Interests Issuer

  	
   

  	
  Authorized

  Interests

  	
   

  	
  Outstanding

  Interests

  	
   

  	
  % of Interests Pledged

  	
   

  
	
  [ITB Baltimore
  LLC](8)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB Baltimore LLC

  	
   

  
	
  [ITB Groton LLC](9)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB Groton LLC

  	
   

  
	
  [ITB
  Jacksonville LLC](10)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB Jacksonville LLC

  	
   

  
	
  [ITB Mobile LLC](11)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB Mobile LLC

  	
   

  











(8)           For Pledge by USS Chartering LLC.


 


(9)           For Pledge by USS Chartering LLC.


 


(10)         For Pledge by USS Chartering LLC.


 


(11)         For Pledge by USS Chartering LLC.


 


Attachment 1-2





















 


	
  Pledged Interests Issuer

  	
   

  	
  Authorized

  Interests

  	
   

  	
  Outstanding

  Interests

  	
   

  	
  % of Interests Pledged

  	
   

  
	
  [ITB New York
  LLC](12)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB New York LLC

  	
   

  
	
  [ITB Philadelphia
  LLC](13)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of ITB Philadelphia LLC

  	
   

  
	
  [USCS ATB LLC](14)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USCS ATB LLC

  	
   

  
	
  [USCS Charleston
  Chartering LLC](15)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USCS Charleston Chartering LLC

  	
   

  











(12)         For Pledge by USS Chartering LLC.


 


(13)         For Pledge by U.S. Shipping Operating
LLC.


 


(14)         For Pledge by U.S. Shipping Operating
LLC.


 


(15)         For Pledge by U.S. Shipping Operating
LLC.


 


Attachment 1-3





















 


	
  Pledged Interests Issuer

  	
   

  	
  Authorized

  Interests

  	
   

  	
  Outstanding

  Interests

  	
   

  	
  % of Interests Pledged

  	
   

  
	
  [USCS Chemical
  Pioneer LLC](16)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USCS Chemical Pioneer LLC

  	
   

  
	
  [USCS Charleston
  LLC](17)

  	
   

  	
  100

  membership

  units

  	
   

  	
   

   

  	
   

  	
  100% of all of the membership interests owned by the
  Pledgor, being 100% of the membership units of USCS Charleston LLC

  	
   

  











(16)         For Pledge by U.S. Shipping Operating
LLC.


 


(17)         For Pledge by USCS Charleston
Chartering LLC.


 


Attachment 1-4





















 


Attachment 2

to

Pledge Agreement 


 


State of Organization,
Formation or Incorporation, Etc.


 


PLEDGOR:  [U.S. SHIPPING
PARTNERS L.P. LLC] [U.S. SHIPPING OPERATING LLC] [USCS CHEMICAL PIONEER LLC]
[USS CHARTERING LLC] [USCS CHARLESTON CHARTERING LLC]


 


STATE OF FORMATION:  Delaware


 


STATE IDENTIFICATION NUMBER:  [         ]


 


CHIEF EXECUTIVE OFFICE:  [c/o U.S.
Shipping Partners L.P.,](18) 399 Thornall Street, Edison, NJ 08837


 


TRADE NAMES:  None










(18)         Do not use for Pledge
Agreement delivered by U.S. Shipping Partners L.P.


 


Attachment 2-1





















 


Attachment 3

to

Pledge Agreement


 


FORM OF TRANSFER
POWER


 


FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _____________________________ (___________)
[membership interests] [stock] in [______], a Delaware [limited liability
company] [corporation] (the “Issuer”),
represented by the attached Certificate No. _________ herewith and do hereby
irrevocably constitute and appoint ____________________ as attorney to transfer
the said [membership interests] [stock] on the books of the Issuer with full
power of substitution in the premises.


 


	
   

  	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  IN PRESENCE OF:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


Attachment 3-1





















 


Attachment 4

to

Pledge Agreement


 


FORM OF NOTICE OF PLEDGE AGREEMENT


 


	
  TO:

  	
   

  	
  [U.S. Shipping Operating LLC]

  
	
   

  	
   

  	
  [USCS Chemical Chartering LLC]

  
	
   

  	
   

  	
  [USS Chartering LLC]

  
	
   

  	
   

  	
  [ITB Baltimore LLC]

  
	
   

  	
   

  	
  [ITB Groton LLC]

  
	
   

  	
   

  	
  [ITB Jacksonville LLC]

  
	
   

  	
   

  	
  [ITB Mobile LLC]

  
	
   

  	
   

  	
  [ITB New York LLC]

  
	
   

  	
   

  	
  [ITB Philadelphia LLC]

  
	
   

  	
   

  	
  [USCS ATB LLC]

  
	
   

  	
   

  	
  [USCS Charleston Chartering LLC]

  
	
   

  	
   

  	
  [USCS Chemical Pioneer LLC]

  
	
   

  	
   

  	
  [USCS Charleston LLC]

  



 


Notice is hereby given that, pursuant to a Pledge
Agreement, dated as of November 3, 2004 (the “Pledge
Agreement”), between [U.S.
SHIPPING PARTNERS L.P., a
Delaware limited partnership] [U.S. SHIPPING
OPERATING LLC] [USCS CHEMICAL PIONEER LLC]  [USS CHARTERING LLC]
[USCS CHARLESTON CHARTERING LLC], [a Delaware limited liability
company] (the “Pledgor”), in favor of KEYBANK NATIONAL
ASSOCIATION, as collateral agent (in such capacity, together with
its successors in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined in the Pledge
Agreement), the Pledgor has pledged and assigned to the Collateral Agent, and
granted to the Collateral Agent a continuing security interest in, all right,
title and interest of the Pledgor, whether now existing or hereafter arising or
acquired, in, to and under that certain Amended and Restated Limited Liability
Company Agreement, dated as of November 3, 2004 (the “Operating Agreement”), of                           ,
a Delaware limited liability company (the “Pledged
Interests Issuer”), including, without limitation:


 


The Pledgor’s rights, now existing or hereafter
arising or acquired, to receive from time to time its share of profits, income,
surplus, compensation, return of capital, distributions and other
reimbursements and payments from the Pledged
Interests Issuer (including, without limitation, specific
properties of the Pledged Interests Issuer
upon dissolution and otherwise), in respect of any and all of the following:


 


(1)           All membership and other equity
interests now owned or hereafter acquired by the Pledgor in the Pledged Interests Issuer as
a result of exchange offers, direct investments or contributions or otherwise;


 


Attachment 4-1





















 


(2)           The Pledgor’s accounts, general
intangibles and other rights to payment or reimbursement, now existing or
hereafter arising or acquired, from the Pledged Interests Issuer, existing or arising from
loans, advances or other extensions of credit by the Pledgor from time to time
to or for the account of the Pledged
Interests Issuer, or from services rendered by the Pledgor
from time to time to or for the account of the Pledged Interests Issuer; and


 


(3)           The proceeds of and from any and all
of the foregoing.


 


Pursuant to and subject to the terms of the Pledge
Agreement, the Pledged Interests Issuer
is hereby authorized and directed to (a) register the Pledgor’s pledge to
the Collateral Agent of the Pledgor’s membership and other equity interests on
the Pledged Interests Issuer’s
books, (b) to make direct payment to the Collateral Agent of any amounts
due or to become due the Pledgor under the Operating Agreement, if so notified
by the Collateral Agent, and (c) permit the Collateral Agent to exercise
(to the exclusion of the Pledgor) the voting power and all other incidental
rights of ownership with respect to such membership or other equity interests
in accordance with the terms of the Pledge Agreement.


 


Attachment 4-2





















 


The Collateral Agent hereby requests the Pledged Interests Issuer to
indicate the Pledged Interests Issuer’s
acceptance of this Notice and consent to and confirmation of its terms and
provisions by signing a copy hereof and returning the same to the Collateral
Agent.


 


	
  Dated:
           , 2004

  	
  KEYBANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Preston Commons West Tower

  
	
   

  	
   

  	
  8117 Preston Road, Ste. 440

  
	
   

  	
   

  	
  Dallas, TX 75225

  
	
   

  	
  Attention:

  	
  Thomas Rajan

  
	
   

  	
  Telephone:

  	
  214-414-2580

  
	
   

  	
  Facsimile:

  	
  214-414-2621

  



 


Attachment
4-3





















 


ACKNOWLEDGMENT


 


[NAME OF PLEDGED INTERESTS ISSUER], a Delaware limited liability
company  (the “Pledged
Interests Issuer”), hereby (a) acknowledges and consents to the
assignment by [U.S. SHIPPING PARTNERS L.P., a Delaware limited partnership] [U.S.
SHIPPING OPERATING LLC] [USCS CHEMICAL PIONEER LLC]  [USS CHARTERING LLC]
[USCS CHARLESTON CHARTERING LLC], [a Delaware limited liability
company] (the “Pledgor”), of its right,
title and interest in, to and under that certain Amended and Restated Limited
Liability Company Agreement, dated as of November 3, 2004 (the “Operating Agreement”), of the Pledged
Interests Issuer pursuant to the terms of the Pledge Agreement, dated as of
November 3, 2004 (the “Pledge Agreement”),
made by the Pledgor for KEYBANK NATIONAL ASSOCIATION, as collateral agent (in such
capacity, together with its successors in such capacity, the “Collateral Agent”) for the Secured Parties
(as defined in the Pledge Agreement), (b) confirms that the Pledged Interests
Issuer has reviewed the Pledge Agreement and this notice of assignment, (c) has
registered the Pledgor’s pledge to the Collateral Agent of the Pledgor’s
membership interests on the Pledged Interests Issuer’s books, (d) upon notice
from the Collateral Agent, the Pledged Interests Issuer agrees to make direct
payment to the Collateral Agent of any amounts due or to become due the Pledgor
under the Operating Agreement, (e) agrees to recognize the Collateral Agent (to
the exclusion of the Pledgor) as the sole Person entitled to exercise the
voting power and all other incidental rights of ownership with respect to such
membership or other equity interests in accordance with the terms of the Pledge
Agreement, and (f) agrees to comply with instructions provided by the
Collateral Agent without further consent by the Pledgor.


 


	
  Dated: 
                 ,
  2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF PLEDGED
  INTERESTS ISSUER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Telecopy:

  	
   

  



 


Attachment 4-4





















 


EXHIBIT I-1


 


FORM OF SECURITY AGREEMENT


 


THIS SECURITY AGREEMENT (this “Security
Agreement”), dated as of November 3, 2004,
made by [U.S. SHIPPING PARTNERS L.P.] [U.S. SHIPPING OPERATING
LLC] [USCS CHARLESTON CHARTERING LLC], a Delaware limited [partnership] [liability company] (the
“Grantor”), in favor of KEYBANK NATIONAL
ASSOCIATION, acting in its capacity as collateral agent (in such
capacity including in its capacity as a securities intermediary (either
directly or indirectly through its affiliate McDonald Investments, Inc. (the “Securities Intermediary”)), as defined in the
U.C.C. (as defined below), and together with its successors and assigns in such
capacities, the “Collateral Agent”)
under the Credit Agreement referenced below for the benefit of the Secured
Parties (as defined below).


 


W I T N E S S E T H:


 


WHEREAS, pursuant to a Second Amended and Restated Credit
Agreement, dated as of November 3, 2004 (together with all amendments,
supplements, restatements and other modifications, if any, from time to time
thereafter made thereto, the “Credit Agreement”),
by and among [Grantor,](1) [U.S. Shipping Partners L.P., a Delaware limited
partnership, U.S. Shipping Operating LLC,] ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC,
USS Chartering LLC, USCS Chemical Chartering LLC, USCS
Chemical Pioneer LLC, USCS Charleston LLC, USCS ATB LLC and [USCS Charleston
Chartering LLC](2), each a Delaware limited liability company (each of the
foregoing entities individually a “Borrower”
and collectively, the “Borrowers”), the
various financial institutions as are or may become parties thereto
(collectively, the “Lenders”), Canadian
Imperial Bank of Commerce, as letter of credit issuer (in such capacity together
with its successors in such capacity, the “Letter of Credit Issuer”) and
as administrative agent for the Lenders (in such capacity together with its
successors in such capacity, the “Administrative Agent”), and the
Collateral Agent, the Lenders and the Letter of Credit Issuer have extended
Commitments to make Credit Extensions to the Borrowers;










(1)           Use only if Grantor is a Borrower.


 


(2)           Use appropriate combination of
entities.


 


WHEREAS, the Borrowers have entered into or may enter into
certain Hedge Agreements with Secured Hedge Counterparties, pursuant to the
terms of the Credit Agreement;


 


[WHEREAS, the Grantor is a wholly-owned [direct] [indirect]
subsidiary of MLP;](3)










(3)           Use for Security Agreement delivered
by a Subsidiary that is not a Borrower.


 


Exhibit I-1-1





















 


[WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered that certain Guaranty (the “Guaranty”) dated as of even date herewith in
favor of the Collateral Agent;](4)










(4)           Use for Security
Agreement delivered by a Subsidiary that is not a Borrower.


 


WHEREAS, as a condition precedent to the making of the Loans
and the issuance of the Letters of Credit under the Credit Agreement, and to
the extension of financial accommodations under the Hedge Agreements referred
to above, the Grantor is required to execute and deliver this Security
Agreement;


 


WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Security Agreement; and


 


WHEREAS, it is in the best interests of the Grantor to
execute this Security Agreement inasmuch as the Grantor will derive substantial
direct and indirect benefits from the Loans made from time to time to, and the
Letters of Credit issued on behalf of, the Borrowers by the Lenders and/or the
Letter of Credit Issuer pursuant to the Credit Agreement and the financial
accommodations made from time to time to the Borrowers by Secured Hedge
Counterparties pursuant to the Secured Hedge Agreements.


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in order to induce the Lenders
and the Letter of Credit Issuer to make Loans (including the initial Loans) to,
and/or issue or participate in Letters of Credit for the account of, the
Borrowers pursuant to the Credit Agreement and to induce the Secured Hedge
Counterparties to extend financial accommodations pursuant to the Secured Hedge
Agreements, the Grantor hereby agrees, for the benefit of each Secured Party,
as follows:


 


ARTICLE I

DEFINITIONS


 


SECTION 1.1       Certain
Terms. The
following terms (whether or not underscored) when used in this Security
Agreement, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and plural
forms thereof):


 


“Administrative Agent”
is defined in the first recital.


 


“Borrower” and
“Borrowers” are defined in the first recital.


 


“Collateral”
is defined in Section 2.1.


 


“Collateral Account”
is defined in Section 4.1.2(b).


 


“Collateral Agent”
is defined in the preamble.


 


Exhibit I-1-2





















 


“Computer Hardware and
Software Collateral” means: (a) all computer and other electronic
data processing hardware, integrated computer systems, central processing
units, memory units, display terminals, printers, features, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral devices
and other related computer hardware, in each case, whether now owned or leased
or hereafter acquired by the Grantor; (b) all software programs (including both
source code, object code and all related applications and data files), whether now
owned, licensed or leased or hereafter acquired by the Grantor, designed for
use on any of the computers and electronic data processing hardware described
in clause (a) above; (c) all firmware
associated therewith; (d) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses
(a) through (c); and (d) all
rights with respect to all of the foregoing, including, without limitation, any
and all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.


 


“Copyright Collateral”
means all copyrights of the Grantor, whether statutory or common law,
registered or unregistered, now or hereafter in force throughout the world
including, without limitation, all of the Grantor’s right, title and interest
in and to all copyrights registered in the United States Library of Congress or
anywhere else in the world, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, the right to sue for
past, present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and
all proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages and proceeds of suit.


 


“Credit Agreement”
is defined in the first recital.


 


“Equipment” is
defined in clause (a) of Section 2.1.


 


“Grantor” is
defined in the preamble.


 


[“Guaranty” is
defined in the fourth recital.](5)










(5)           Use for Security
Agreement delivered by a Subsidiary that is not a Borrower.


 


“Indemnified Parties”
is defined in Section 6.2(a).


 


“Intellectual Property
Collateral” means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.


 


“Inventory” is
defined in clause (b) of Section 2.1.


 


Exhibit I-1-3





















 


“Lenders”
is defined in the first recital.


 


“Letter of Credit Issuer” is defined in the first
recital.


 


“Patent Collateral”
means: (a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing anywhere
in the world, in each case, of the Grantor; (b) all patent licenses of the
Grantor; (c) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in clauses (a) and (b);
and (d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to sue third
parties for past, present or future infringements of any patent or patent
application, and for breach or enforcement of any patent license, and all rights
corresponding thereto throughout the world.


 


“Receivables”
is defined in clause (c) of Section 2.1.


 


“Related Contracts”
is defined in clause (c) of Section 2.1.


 


“Secured Hedge Agreements”
means each Hedge Agreement entered into by a Borrower and a Secured Hedge
Counterparty.


 


“Secured Obligations”
is defined in Section 2.2.


 


“Secured Party”
means, as the context may require, any and all of the Administrative Agent, the
Collateral Agent, any Secured Hedge Counterparty, the Letter of Credit Issuer
and any Lender, and each of their respective successors, transferees and
assigns.


 


“Securities Intermediary”
is defined in the preamble.


 


“Security Agreement”
is defined in the preamble.


 


“Trade Secrets Collateral”
means common law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of the Grantor (all of the
foregoing being collectively referred to as a “Trade
Secret”), whether or not any Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating or referring in any way to any Trade Secret, all Trade
Secret licenses, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any Trade Secret license.


 


“Trademark Collateral”
means: (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, certification
marks, collective marks, logos, other source of business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of a like nature, in each case, of the Grantor (all of the
foregoing items in this clause (a)
being collectively referred to as a “Trademark”),
now existing anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and all


 


Exhibit I-1-4





















 


applications in connection therewith, whether pending or in preparation
for filing, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any foreign country; (b) all
Trademark licenses of the Grantor; (c) all reissues, extensions or renewals of
any of the items described in clauses (a)
and (b); (d) all of the goodwill of the
business connected with the use of, and symbolized by the items described in, clauses (a) and (b);
and (e) all proceeds of, and rights associated with, the foregoing, including
any claim by the Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or Trademark
license, or for any injury to the goodwill associated with the use of any
Trademark or for breach or enforcement of any Trademark license.


 


“U.C.C.”
means the Uniform Commercial Code, as in effect in the State of New York, as
the same may be amended from time to time.


 


SECTION 1.2       Credit
Agreement Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.


 


SECTION 1.3       U.C.C.
Definitions.
Unless otherwise defined herein or the context otherwise requires, terms for
which meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.


 


ARTICLE II

SECURITY INTEREST


 


SECTION 2.1       Grant of
Security. The
Grantor hereby pledges, hypothecates, assigns, charges, mortgages, delivers and
transfers to the Collateral Agent for its benefit and the ratable benefit of
each of the Secured Parties, and hereby grants to the Collateral Agent for its
benefit and the ratable benefit of each of the Secured Parties, a continuing
security interest in all of the Grantor’s right, title and interest, whether
now existing or hereafter arising or acquired, in and to the following property
(the “Collateral”):


 


(a)           all equipment in all of its forms of
the Grantor, wherever located (including, without limitation, all equipment,
instruments, devices and machinery located on or associated with or used in
connection with the Vessels), and all machinery, apparatus, installation
facilities and other tangible personal property, and all parts thereof and all accessions,
additions, attachments, improvements, substitutions, replacements and proceeds
thereto and therefore (any and all of the foregoing being referred to as the “Equipment”);


 


(b)           all inventory in all of its forms of
the Grantor, wherever located (including, without limitation, all items used in
connection with the Vessels constituting inventory and all food products,
restaurant dinnerware and tableware, kitchen supplies and utensils, restaurant
supplies, and all raw materials and materials used or consumed in the operation
or maintenance of the Vessels, including fuel and oil used therefore),
including (i) all oil, gas, fuel, and other hydrocarbons and all products and
substances derived therefrom, all raw materials and work in process therefore,
finished goods


 


Exhibit I-1-5





















 


thereof, and materials used or consumed in the
manufacture or production thereof, (ii) all goods in which the Grantor has an
interest in mass or a joint or other interest or right of any kind (including
goods in which the Grantor has an interest or right as consignee), and (iii)
all goods which are returned to or repossessed by the Grantor, and all
accessions thereto, products thereof and documents therefore (any and all such
inventory, materials, goods, accessions, products and documents being referred
to as the “Inventory”);


 


(c)           all accounts, money, payment
intangibles, deposit accounts, bank accounts, securities accounts (including,
without limitation, the Collateral Accounts and the Restricted Loss Proceeds
Account (as defined in the Cash Collateral Control Agreement) and all amounts
on deposit therein and all Cash Equivalent Investments carried therein and all
proceeds thereof), contracts, each Charter and each other Transaction Document to
which it is a party), contract rights, all rights constituting a right to the
payment of money, chattel paper, documents, documents of title, instruments,
letters of credit, letter-of-credit rights and general intangibles of the
Grantor, whether or not earned by performance or arising out of or in
connection with the sale or lease of goods or the rendering of services,
including all moneys due or to become due in repayment of any loans or
advances, and all rights of the Grantor now or hereafter existing in and to all
security agreements, guaranties, leases, agreements and other contracts
securing or otherwise relating to any such accounts, money, payment
intangibles, deposit accounts, bank accounts, securities accounts, contracts,
contract rights, rights to the payment of money, chattel paper, documents,
documents of title, instruments, letters of credit, letter-of-credit rights,
investment property and general intangibles (any and all such accounts, money,
payment intangibles, deposit accounts, contracts, contract rights, rights to
the payment of money, chattel paper, documents, documents of title,
instruments, letters of credit, letter-of-credit rights and general intangibles
being referred to as the “Receivables”,
and any and all such security agreements, guaranties, leases, agreements and
other contracts being referred to as the “Related
Contracts”); provided that a Related Contract
that by its terms requires consent of the other parties thereto to the
mortgage, pledge, assignment or grant of security interest contained herein
with respect to such Related Contract is expressly excepted and excluded from
such mortgage, pledge, assignment or grant of security interest to the extent
such mortgage, pledge, assignment or security interest would be prohibited thereby,
provided further however that such exception and exclusion will not affect or
limit in any way the grant of a mortgage, pledge, assignment and/or security
interest in and to the proceeds thereof and such exception and exclusion are
only to the extent that (i) such consent has not been obtained, (ii) such
consent is not rendered ineffective by Section 9-408 of the UCC or any other
similar statute, and (iii) such consent requirement is otherwise enforceable
under applicable law (it being understood that nothing herein contained shall
be deemed a waiver of the provisions of Section 9-408 of the UCC or any other
similar statute);


 


(d)           all Intellectual Property Collateral
of the Grantor;


 


(e)           all books, correspondence, credit
files, records, invoices, tapes, cards, computer runs, writings, data bases,
information, paper and documents and other property


 


Exhibit I-1-6





















 


relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the foregoing in
this Section 2.1;


 


(f)            all governmental approvals,
including any permits, to the extent a security interest may be granted
therein; provided that any governmental approval that by its terms or by
operation of law would be void, voidable, terminable or revocable if mortgaged,
pledged or assigned hereunder is expressly excepted and excluded from the terms
of this Security Agreement, including the grant of security interest in this Section
2.1;


 


(g)           all interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect the Grantor against fluctuations
in interest rates or currency exchange rates and all commodity hedge, commodity
swap, exchange, forward, future, floor, collar or cap agreements, fixed price
agreements and all other agreements or arrangements designed to protect the
Grantor against fluctuations in commodity prices (including, without
limitation, any Hedge Agreement);


 


(h)           to the extent not included in the
foregoing, all bank accounts and supporting obligations, and all boilers,
engines, machinery, masts, spars, boats, anchors, cables, chains, rigging,
tackle, capstans, outfit, tools, pumps and pumping equipment, drills, apparel,
furniture, fittings, equipment, drilling equipment, spare parts, and all other
appurtenances thereunto appertaining or belonging, whether now owned or
hereafter acquired, and also any and all additions, improvements, renewals and
replacements hereafter made in or to any Purchased Asset or any part thereof,
including all items and appurtenances aforesaid;


 


(i)            all of the Grantor’s other property
and rights of every kind and description and interests therein, including,
without limitation, all other “Accounts”, “Certificated Securities”, “Chattel
Paper”, “Commercial Tort Claims”, “Commodity Accounts”, “Commodity Contracts”,
“Deposit Accounts”, “Documents”, “Equipment”, “Fixtures”, “General
Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”,
“Letters of Credit”, “Letter-of-Credit Rights”, “Money”, “Proceeds”,
“Securities”, “Securities Account”, “Security Entitlements” and “Uncertificated
Securities” as such terms are defined in the U.C.C.; and


 


(j)            all accessions, substitutions,
replacements, products, offspring, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in clauses (a), (b), (c), (d),
(e), (f), (g), (h) and (i) of this Section
2.1, proceeds of insurance, and proceeds deposited from time to time in any
Collateral Account or lock boxes of the Grantor, and, to the extent not
otherwise included, all payments under insurance (whether or not the Collateral
Agent is the loss payee thereof), or any condemnation award, indemnity,
warranty or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral).


 


Exhibit I-1-7





















 


SECTION 2.2       Security for
Obligations.
This Security Agreement secures the indefeasible payment and
performance in full of all Obligations now or hereafter existing under the
Credit Agreement, the Notes, [the Guaranty,](6) the Secured Hedge Agreements
and each other Loan Document, whether for principal, interest, costs, fees,
expenses, or otherwise, and all other obligations of the Borrowers and each
other Loan Party to any Secured Party pursuant to any of the Transaction
Documents, now or hereafter owing, howsoever created, arising or evidenced,
whether direct or indirect, primary or secondary, fixed or absolute or
contingent, joint or several, regardless of how evidenced or arising,
including, without limitation, all Hedging Obligations arising under any Secured
Hedge Agreement, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing or due or to
become due (all such Obligations and such other obligations of the Borrowers
and each other Loan Party being referred to as the “Secured
Obligations”).










(6)           Use if Grantor is
not a Borrower.


 


SECTION 2.3       Continuing
Security Interest. This Security Agreement shall create a continuing security interest
in the Collateral and shall: (a) remain in full force and effect until
indefeasible payment in full in cash of all Secured Obligations and the
termination or expiration of all Commitments and all other commitments of the
Secured Parties to any Borrower pursuant to any Loan Document, including,
without limitation, any Secured Hedge Agreement, and the termination or
expiration of all Letters of Credit; (b) be binding upon the Grantor and its
successors, transferees and assigns; and (c) inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the
Collateral Agent and each other Secured Party and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any Note, any Loan or any Commitment
held by it as provided in Section 10.11.1
of the Credit Agreement and any Secured Party may assign or otherwise transfer
(in whole or in part) its rights and obligations pursuant to any Secured Hedge
Agreement, and any successor or assignee thereof shall thereupon become vested
with all of the rights and benefits in respect thereof granted to such Secured
Party under any such Loan Document or Secured Hedge Agreement (including this
Security Agreement), or otherwise, subject, however, to any contrary provisions
in such assignment or transfer, and as applicable to the provisions of Section 10.11.1 and Article IX of the Credit Agreement. Upon the
indefeasible payment in full of all Secured Obligations and the termination or
expiration of all Commitments and any other commitments of any Secured Party to
the Borrowers under all Loan Documents, including, without limitation, all
Secured Hedge Agreements, and the termination or expiration of all Letters of
Credit, the security interest granted herein shall terminate and all rights to
the Collateral shall revert to the Grantor. Upon any such payment and
termination or expiration, the Collateral Agent will, at the Grantor’s sole
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.


 


SECTION 2.4       Grantor
Remains Liable. Anything herein to the contrary notwithstanding (a) the Grantor shall
remain liable under the contracts and agreements included in the Collateral to
the extent set forth therein, and shall perform all of its duties and
obligations


 


Exhibit I-1-8





















 


under such contracts and agreements, to the same extent as if this
Security Agreement had not been executed; (b) the exercise by the Collateral
Agent of any of its rights hereunder shall not release the Grantor from any of
it duties or obligations under any contracts and agreements included in the
Collateral; and (c) neither the Collateral Agent nor the Securities
Intermediary nor any other Secured Party shall have any obligation or liability
under any such contracts or agreements included in the Collateral by reason of
this Security Agreement, nor shall the Collateral Agent or the Securities
Intermediary or any other Secured Party be obligated to perform any of the
obligations or duties of the Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.


 


SECTION 2.5       Security
Interest Absolute. All rights of the Collateral Agent and the other Secured
Parties and the security interests granted to the Collateral Agent and the
other Secured Parties hereunder, and all obligations of the Grantor hereunder,
shall be absolute and unconditional, irrespective of (a) any lack of validity
or enforceability of the Credit Agreement or any other Transaction Document;
(b) the failure of any Secured Party or any other holder of any Note (i) to
assert any claim or demand or to enforce any right or remedy against any
Borrower or any other Loan Party or any other Person under the provisions of
the Credit Agreement or any other Transaction Document or otherwise, or (ii) to
exercise any right or remedy against any other guarantor of, or collateral
securing, any Secured Obligations; (c) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Secured Obligations
or any other extension, compromise or renewal of any Secured Obligation; (d)
any reduction, limitation, impairment or termination of any Secured Obligations
for any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Grantor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations; (e) any amendment to, rescission, waiver,
or other modification of, or any consent to departure from, any of the terms of
the Credit Agreement or any other Transaction Document; (f) any addition,
exchange, release, surrender, or non-perfection of any collateral (including
the Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Borrower, any other Loan
Party, any surety or any guarantor.


 


SECTION 2.6       Waiver of
Subrogation.
Until one year and one day after the indefeasible payment in full of all
Obligations and the termination or expiration of all Commitments and all other
commitments of any Secured Party to any Borrower under the Loan Documents,
including, without limitation, the Secured Hedge Agreements, and the
termination or expiration of all Letters of Credit, the Grantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against any [other](7) Borrower or any other Loan Party that arise from
the existence, payment, performance or enforcement of the Grantor’s obligations
under this Security Agreement or any other Loan Document, including, without










(7)           Delete if Grantor is
not a Borrower.


 


Exhibit I-1-9





















 


limitation, any Secured Hedge Agreement, including any right of
subrogation, reimbursement, exoneration or indemnification, any right to
participate in any claim or remedy of any Secured Party against any Borrower or
any other Loan Party or any collateral which any Secured Party now has or
hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take
or receive from any Borrower or any other Loan Party, directly or indirectly,
in cash or other property or by set-off or in any manner, payment or security
on account of such claim or other rights. If any amount shall be paid to the Grantor
in violation of the preceding sentence and the Secured Obligations shall not
have been indefeasibly paid in full in cash or all Commitments and all other
commitments by any Secured Party to any Borrower under the Loan Documents,
including, without limitation, the Secured Hedge Agreements, have not expired
or terminated and all Letters of Credit have not expired or terminated, then
such amount shall be deemed to have been paid to the Grantor for the benefit
of, and held in trust for, the Collateral Agent (on behalf of the Secured
Parties), and shall forthwith be paid to the Collateral Agent to be credited
and applied upon the Secured Obligations, whether matured or unmatured. The
Grantor acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that the waiver
set forth in this Section is knowingly made in contemplation of such benefits.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES


 


SECTION 3.1       Representations
and Warranties of the Grantor. The Grantor hereby represents and warrants unto each
Secured Party as set forth in this Article III.


 


SECTION 3.1.1    Location of Collateral, etc. All of the Equipment, Inventory and
lock boxes of the Grantor are located at the places specified in Item A, Item B
and Item C, respectively, of Schedule I hereto. None of the Equipment
and Inventory has, within the four months preceding the date of this Security
Agreement, been located at any place other than as set forth on Schedule III hereto. The place(s) of business
of the Grantor or, if the Grantor has more than one place of business, the
chief executive office of the Grantor, and the office where the Grantor keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, is set forth on Schedule
II hereto. The Grantor has not been known by any legal name
different from the one set forth on the signature page hereto, and the Grantor
has not been the subject of any merger or other corporate reorganization. None
of the Receivables is evidenced by a promissory note or other instrument (other
than a promissory note or instrument that has been delivered to the Collateral
Agent (with appropriate endorsements)). The Grantor is not a party to any
Federal, state or local government contract, other than those contracts that
have been disclosed to the Collateral Agent within five (5) days after
execution thereof by the Grantor. The “location” of the Grantor within the
meaning of Section 9.307 of the U.C.C. is the State of Delaware.


 


SECTION 3.1.2    Ownership, No Liens, Validity, etc. The Grantor owns the Collateral free
and clear of any Lien, security interest, charge or encumbrance except for the
security interest created by this Security Agreement and except as permitted by
the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or


 


Exhibit I-1-10





















 


any part of the Collateral is on file in any recording office, except such
as may have been filed in favor of the Collateral Agent relating to this
Security Agreement and except for any filings permitted by Section
7.2.3 of the Credit Agreement. This Security Agreement creates a
valid security interest in the Collateral, securing the payment of the Secured
Obligations, and except for the proper filing of a Uniform Commercial Code
Financing Statement with the Secretary of State of the State of Delaware, all
filings and other actions necessary to perfect and protect such security
interest have been duly taken and such security interest shall be a first
priority security interest. The Grantor owns no real property except such real
property that is encumbered by a Lien in favor of the Collateral Agent for the
benefit of the Secured Parties.


 


SECTION 3.1.3    Possession and Control. The Grantor has exclusive possession
and control of the Equipment and Inventory.


 


SECTION 3.1.4    Negotiable Documents, Instruments and
Chattel Paper.
The Grantor has, contemporaneously herewith, delivered to the Collateral Agent
possession of all originals of all negotiable documents and instruments and
chattel paper currently owned or held by the Grantor (duly endorsed in blank,
if requested by the Collateral Agent).


 


SECTION 3.1.5    Intellectual Property Collateral. The Grantor does not own or have any
interest in any Intellectual Property Collateral as of the Effective Date,
other than the Computer Hardware and Software Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect: (a) the Grantor is the owner of the
entire and unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted rights of any
third party; and (b) the Grantor has performed and will continue to perform all
acts and has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in full force
and effect throughout the world, as applicable. The Grantor owns directly or is
entitled to use by license or otherwise, all patents, Trademarks, Trade
Secrets, copyrights, licenses, technology, know-how, processes and rights with
respect to any of the foregoing used in, necessary for or of material
importance to the conduct of its business.


 


SECTION 3.1.6    [Intentionally Blank].


 


SECTION 3.1.7    Validity, etc. This Security Agreement constitutes the
legal, valid and binding obligations of the Grantor enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally, by general equitable
principles (whether enforcement is sought by proceedings in equity or at law)
and an implied covenant of good faith and fair dealing.


 


SECTION 3.1.8    Authorization, Approval, etc. No authorization, approval, or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required (a) for the grant of a security
interest by the Grantor in any Collateral pursuant to this Security Agreement
or for the due execution, delivery, or performance of this Security Agreement
by the Grantor; or (b) for the perfection of or the exercise by the Collateral
Agent’s rights hereunder except the filing of financing statements under the
UCC which filings


 


Exhibit I-1-11





















 


were made on or prior to the Closing Date and the filing of
continuation statements and other amendments to financing statements as
required under the UCC.


 


SECTION 3.1.9    Compliance with Laws. The Grantor is in compliance with the
requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every governmental authority, the non-compliance with which could reasonably be
expected to have a Material Adverse Effect or could reasonably be expected to
materially adversely affect the value of the Collateral or the worth of the
Collateral as collateral security.


 


SECTION 3.1.10 State of Formation; Name. (a) The first paragraph of this
Security Agreement lists the true legal name of the Grantor as registered in
the jurisdiction in which the Grantor is formed; (b) the Grantor’s state of
formation and identification number as designated by such state are set forth
on Schedule II hereto; and (c) the
Grantor is not now and has not been known by any trade name.


 


SECTION 3.1.11 Bank Accounts. The Grantor does not have any deposit accounts,
securities accounts, collateral accounts or any other accounts with any Person
other than the Collateral Agent (collectively, the “Other
Accounts”) except for the deposit accounts with the Persons
identified in Item D of Schedule 1 hereto. The Grantor has taken or
will have taken on or about December 15, 2004, all actions necessary to grant
“control” (within the meaning of Section 9.104(a) or Section 9.106(c), as
applicable, of the U.C.C.) of each Other Account to the Collateral Agent,
including but not limited to, the execution of control agreements in form and
substance satisfactory to the Collateral Agent.


 


SECTION 3.1.12 [Representations and
Warranties in Credit Agreement. The Grantor hereby represents and
warrants unto each Secured Party that each representation and warranty
contained in Article VI of the Credit Agreement or in any other Loan Document
is true and correct as of the date hereof as if such representation or warranty
was set forth in full in the Security Agreement and made by the Grantor with
respect to the Grantor.](8)










(8)           Use for Security Agreement delivered
by a Subsidiary that is not a Borrower.


 


SECTION 3.1.13 [Benefit to Grantor. The Grantor represents that it is in the best
interests of the Grantor to execute this Security Agreement inasmuch as the
Grantor will derive substantial direct and indirect benefits from the Loans
made from time to time to, and the Letters of Credit issued on behalf of, the
Borrowers by the Lenders and/or Letter of Credit Issuer pursuant to the Credit
Agreement, and the financial accommodations made from time to time to the
Borrowers by the Secured Hedge Counterparties pursuant to the Hedge Agreements,
the Grantor is willing to secure the obligations of the Borrowers and the other
Loan Parties under the Credit Agreement, any Note, the Guaranty, any Secured
Hedge Agreement, and the other Loan Documents, and the Grantor agrees that the
Secured Parties are relying on this representation in agreeing to make Credit
Extensions to the Borrowers.](9)










(9)           Use for Security
Agreement delivered by a Subsidiary that is not a Borrower.


 


Exhibit I-1-12





















 


ARTICLE IV

COVENANTS


 


SECTION 4.1       Certain
Covenants of the Grantor. The Grantor hereby covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid or any
Secured Party shall have any outstanding Commitment or any other commitment to
any Borrower under any Loan Document, including, without limitation, any
Secured Hedge Agreement, or any Letter of Credit shall remain outstanding, the
Grantor will perform the obligations set forth in this Article IV.


 


SECTION 4.1.1    As to Equipment and Inventory. The Grantor shall


 


(a)           keep all of the Equipment and
Inventory (other than Inventory sold in the ordinary course of business or used
in the conduct of the business) within the United States of America where all
representations and warranties set forth in Article
III shall be true and correct in all material respects, and all
action required pursuant to the first sentence
of Section 4.1.8 shall have been
taken with respect to the Equipment and Inventory;


 


(b)           cause all Equipment to be maintained
and preserved in the same condition, repair and working order as on the date
hereof, ordinary wear and tear excepted, and in accordance with any
manufacturer’s manual; and forthwith, or in the case of any loss or damage to
any of the Equipment, as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other improvements in
connection therewith so that its business carried on in connection therewith
may be properly conducted at all times unless the Grantor determines in good
faith that the continued maintenance of any of its properties is no longer
economically desirable; and promptly furnish to the Collateral Agent a
statement respecting any loss or damage to any of the material Equipment; and


 


(c)           pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside.


 


SECTION 4.1.2    As to Receivables.


 


(a)           The Grantor shall (i) keep its
place(s) of business, its chief executive office and the office where it keeps
its records concerning the Receivables, located at the address set forth in Schedule
II hereto, or, upon thirty (30) days’ prior written notice to the
Collateral Agent, at such other locations in a jurisdiction where all actions
required by the first sentence of Section 4.1.8 shall have been taken with
respect to the Receivables; (ii) hold and preserve such records; and (iv)
permit representatives of the Collateral


 


Exhibit I-1-13





















 


Agent at any time during normal business hours to
inspect and make abstracts from such records.


 


(b)           Upon written notice by the Collateral
Agent to the Grantor pursuant to this Section
4.1.2(b) during the occurrence and continuance of an Event of
Default under the Credit Agreement, (i) all proceeds of Collateral received by
the Grantor during such Event of Default shall be delivered in kind to the
Collateral Agent for deposit to a deposit account of the Grantor maintained
with the Collateral Agent, and (ii) all deposit accounts and bank accounts of
the Grantor not then maintained at the Collateral Agent and all amounts on
deposit therein or Cash Equivalent Investments carried therein will be
transferred to one or more deposit or bank accounts of the Grantor maintained
at the Collateral Agent (any deposit or bank accounts of the Grantor maintained
at the Collateral Agent, including those described in clauses (i) and (ii)
above referred to herein as a “Collateral Account”). With respect to any
proceeds described in clause (i) above,
(x) the Grantor shall not commingle any such proceeds, and shall hold separate
and apart from all other property, all such proceeds in express trust for the
benefit of the Secured Parties until delivery thereof is made to the Collateral
Agent, and (y) no funds, other than proceeds of Collateral, will be deposited
in any Collateral Account designated for the purpose of holding such proceeds.


 


(c)           The Collateral Agent shall have the
right to apply any amount in any Collateral Account to the payment of any
Secured Obligations which are due and payable. Subject to the rights of the
Collateral Agent, the Grantor shall have the right, with respect to and to the
extent of collected funds in any Collateral Account, as long as no Event of
Default has occurred and is continuing, to require the Collateral Agent (i) to
invest the amounts on deposit thereon in Cash Equivalent Investments provided
that, in the case of certificated securities, the Collateral Agent shall retain
possession thereof as Collateral and, in the case of uncertificated securities,
the Collateral Agent may take such actions, including registration of such
securities in its name, as it shall determine is necessary to perfect its
security interest therein, and (ii) to close such Collateral Account.


 


SECTION 4.1.3    As to Collateral.


 


(a)           Until such time as an Event of
Default shall have occurred and be continuing and the Collateral Agent shall
have notified the Grantor of the revocation of such power and authority (provided that subject to the rights and
remedies of the Collateral Agent hereunder, the Grantor shall be permitted to
use inventory consisting of spares for the operation of the Vessels), the
Grantor (i) will, at its own expense, endeavor to collect, as and when due, all
amounts due with respect to any of the Collateral, including the taking of such
action with respect to such collection as the Collateral Agent may reasonably
request or, in the absence of such request, as the Grantor may deem advisable,
and (ii) may grant, in the ordinary course of business, to any party obligated
on any of the Collateral, any rebate, refund or allowance to which such party
may be lawfully entitled, and may accept, in connection therewith, the return
of goods, the sale or lease of which shall have given rise to such Collateral. Without
limiting the generality of the foregoing, the Collateral Agent shall be
entitled upon the occurrence and continuation


 


Exhibit I-1-14





















 


of an Event of Default to notify any parties obligated
on any of the Collateral to make payment to the Collateral Agent for deposit to
the Collateral Account of any amounts due or to become due thereunder and may
enforce collection of any of the Collateral by suit or otherwise and surrender,
release, or exchange all or any part thereof, or compromise or extend or renew
for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby. The Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make payment
to the Collateral Agent for deposit to the Collateral Account of any amounts
due or to become due thereunder.


 


(b)           Without limiting the generality of
the foregoing clause (a), the Collateral
Agent is authorized, upon the occurrence and continuation of an Event of
Default, to endorse, in the name of the Grantor, any item, howsoever received
by the Collateral Agent, representing any payment on or other proceeds of any
of the Collateral.


 


SECTION 4.1.4    As to Intellectual Property Collateral.


 


(a)           The Grantor shall not, unless it
shall either (i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that any of
the Patent Collateral is of negligible economic value to the Grantor, or (ii)
have a valid business purpose to do otherwise, do any act, or omit to do any
act, whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable.


 


(b)           The Grantor shall not, and the
Grantor shall not permit any of its licensees to, unless it shall either (i)
reasonably and in good faith determine (and notice of such determination shall
have been delivered to the Collateral Agent) that any of the Trademark
Collateral is of negligible economic value to the Grantor, or (ii) have a valid
business purpose to do otherwise, (A) fail to continue to use any of the
Trademark Collateral in order to maintain all of the Trademark Collateral in
full force free from any claim of abandonment for non-use, (B) fail to maintain
consistent with past practices the quality of products and services offered
under all of the Trademark Collateral, (C) fail to employ all of the Trademark
Collateral registered with any Federal or state or foreign authority with an
appropriate notice of such registration, (D) adopt or use any other Trademark
which is confusingly similar or a colorable imitation of any of the Trademark
Collateral, (E) use any of the Trademark Collateral registered with any Federal
or state or foreign authority except for the uses for which registration or
application for registration of all of the Trademark Collateral has been made,
and (F) do or permit any act or knowingly omit to do any act whereby any of the
Trademark Collateral may lapse or become invalid or unenforceable.


 


(c)           The Grantor shall not, unless it
shall either (i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that any of
the Copyright Collateral or any of the Trade Secrets Collateral is of
negligible economic value to the Grantor, or (ii) have a valid business purpose
to do otherwise, do or permit any act or knowingly omit to do any act whereby
any of the Copyright Collateral or any of the Trade Secrets Collateral may
lapse or become invalid


 


Exhibit I-1-15





















 


or unenforceable or placed in the public domain except
upon expiration of the end of an unrenewable term of a registration thereof.


 


(d)           The Grantor shall notify the
Collateral Agent immediately if it knows that any application or registration
relating to any material item of the Intellectual Property Collateral may
become abandoned or dedicated to the public or placed in the public domain or
invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any foreign counterpart thereof or any court) regarding the
Grantor’s ownership of any of the Intellectual Property Collateral, its right
to register the same or to keep and maintain and enforce the same.


 


(e)           In no event shall the Grantor or any
of its agents, employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof,
unless it promptly informs the Collateral Agent, and upon request of the
Collateral Agent executes and delivers any and all agreements, instruments,
documents and papers as the Collateral Agent may reasonably request to evidence
the Collateral Agent’s security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of the Grantor relating
thereto or represented thereby.


 


(f)            The Grantor shall take all
reasonable and necessary steps, including in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and taxes
(except to the extent that dedication, abandonment or invalidation is permitted
under the foregoing clauses (a), (b) and (c)).


 


(g)           The Grantor shall, (i) contemporaneously
herewith, execute and deliver to the Collateral Agent any document reasonably
required to acknowledge or register or perfect the Collateral Agent’s interest
in any part of the Grantor’s existing Intellectual Property Collateral, (ii)
provide written notice to the Collateral Agent within ten (10) Business Days
after acquiring ownership or other rights with respect to any new Intellectual
Property Collateral, and (iii) within thirty (30) days after request by the
Collateral Agent, provide any document reasonably required to acknowledge or
register or perfect the Collateral Agent’s interest in any part of such new
Intellectual Property Collateral.


 


SECTION 4.1.5    As
to Other Bank Accounts. The Grantor shall not establish or deposit any
monies, securities or any other assets in any Other Account not identified in Item
D of Schedule 1 hereto, unless the Grantor has taken all actions
necessary to grant “control” (within the meaning of Section 9.104(a) or Section
9.106(c), as applicable, of the U.C.C.) of such Other


 


Exhibit I-1-16





















 


Account to the Collateral Agent, including but not limited to, the
execution of a control agreement in form and substance satisfactory to the
Collateral Agent.


 


SECTION 4.1.6    Commercial
Tort Claims. If at any time the Grantor shall acquire or otherwise have
rights with respect to a Commercial Tort Claim which the Grantor reasonably
believes, based upon then-current information, is likely to result in a
judgment in favor of the Grantor in excess of $250,000, it shall promptly
notify the Collateral Agent thereof in a writing (such writing to be in form
and substance satisfactory to the Collateral Agent) signed by it containing
brief details thereof to the Collateral Agent and take such other actions as
necessary or desirable or reasonably requested by the Collateral Agent to grant
and perfect a Lien in such Commercial Tort Claim in favor of the Collateral
Agent.


 


SECTION 4.1.7    Transfers and Other Liens. The Grantor shall not: (a) sell, assign
(by operation of law or otherwise) or otherwise dispose of any of the
Collateral, except Inventory in the ordinary course of business or as permitted
by the Credit Agreement (provided, that the Grantor may use or dispose of cash
in the ordinary course of business for purposes permitted by the Credit
Agreement subject to, both before and after the occurrence of an Event of
Default, the rights and remedies of the Collateral Agent and the Secured
Parties granted pursuant to this Security Agreement including, without
limitation, the right of the Collateral Agent to require all deposit and bank
accounts of the Grantor and cash carried therein to be deposited into one or
more Collateral Accounts maintained at the Collateral Agent); or (b) create or
suffer to exist any Lien or other charge or encumbrance upon or with respect to
any of the Collateral to secure Indebtedness of any Person, except for the
security interest created by this Security Agreement and except for Liens and
other charges or encumbrances permitted by the Credit Agreement.


 


SECTION 4.1.8    Further Assurances, etc. The Grantor agrees that, from time to
time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or that the Collateral Agent may reasonably request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor will: (a) at the request of the
Collateral Agent during an Event of Default, mark conspicuously each chattel
paper included in the Receivables and each Related Contract and, at the request
of the Collateral Agent, each of its records pertaining to the Collateral with
a legend, in form and substance satisfactory to the Collateral Agent,
indicating that such document, chattel paper, Related Contract or Collateral is
subject to the security interest granted hereby; (b) if any Receivable shall be
evidenced by a promissory note or other instrument, negotiable document or
chattel paper, deliver and pledge to the Collateral Agent hereunder such
promissory note, instrument, negotiable document or chattel paper duly endorsed
or accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Collateral Agent; (c) file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices (including, without limitation, any assignment of claim
form under or pursuant to the federal assignment of claims statute, 31 U.S.C. §
3726, any successor or amended version thereof or any regulation promulgated under
or pursuant to any version thereof), as may be necessary or advisable, or as
the Collateral Agent may reasonably request, in order to perfect and preserve
the security interests and other rights granted or purported to be


 


Exhibit I-1-17





















 


granted hereby; (d) furnish to the Collateral Agent, from time to time
at the Collateral Agent’s reasonable request, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail; (e) warrant and defend the right and title herein granted to
the Collateral Agent in and to the Collateral (and all right, title and
interest represented by the Collateral) against the claims and demands of all
Persons whomsoever; (f) not change its location within the meaning of Section
9.307 of the U.C.C. or its name or the state of its formation without providing
the Collateral Agent at least thirty (30) days’ prior notice to such change and
taking all actions required by the first sentence of Section 4.1.8; and
(g) upon its acquisition after the date hereof of any Collateral, with respect
to which the security interest granted hereunder is not perfected automatically
upon such acquisition, take such actions with respect to the Collateral or any
part thereof as required by the Loan Documents.  With respect to the foregoing and the grant of
the security interest hereunder, the Grantor hereby authorizes the Collateral
Agent to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
the Grantor where permitted by law.


 


SECTION 4.1.9    [Intentionally Blank].


 


SECTION 4.1.10 [Intentionally Blank].


 


SECTION 4.1.11 Filings. The Grantor hereby authorizes the
Collateral Agent to file U.C.C. financing statements, continuations and
amendments with respect to the Collateral describing the collateral property as
“all personal property” or words of similar import, and to file U.C.C.
financing statements, and continuations and amendments thereto, and other
similar documents with respect to the Collateral without its signature (to the
extent permitted by applicable law).


 


ARTICLE V

THE AGENT


 


SECTION 5.1       Collateral
Agent Appointed Attorney-in-Fact. The Grantor hereby irrevocably appoints the
Collateral Agent its attorney-in-fact, with full authority in the place and
stead of the Grantor and in the name of the Grantor or otherwise, from time to
time in the Collateral Agent’s discretion, to take any action and to execute
any instrument which the Collateral Agent acting reasonably may deem necessary
or advisable to accomplish the purposes of this Security Agreement, including,
without limitation: (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper in
connection with clause (a) above; (c)
to file any claims or take any action or institute any proceedings which the
Collateral Agent acting reasonably may deem necessary or advisable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and (d) to perform the
affirmative obligations of the Grantor hereunder (including all obligations of
the Grantor pursuant to Section 4.1.8).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 5.1 is irrevocable and coupled with an
interest.


 


Exhibit I-1-18





















 


SECTION 5.2       Collateral
Agent May Perform. If the Grantor fails to perform any agreement contained herein, then
the Collateral Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Collateral Agent incurred in
connection therewith shall be payable by the Grantor pursuant to Section 6.2, and the Collateral Agent may
from time to time take any other action which the Collateral Agent reasonably
deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.


 


SECTION 5.3       Collateral
Agent Has No Duty. In addition to, and not in limitation of, Section
2.4, the powers conferred on the Collateral Agent hereunder are
solely to protect its interest (on behalf of the Secured Parties) in the
Collateral and shall not impose any duty on it to exercise any such powers. Except
for the exercise of reasonable care over any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.


 


SECTION 5.4       Reasonable
Care. The
Collateral Agent is required to exercise reasonable care in the custody and
preservation of any of the Collateral in its possession; provided, however,
that the Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral if it takes such action
for that purpose as the Grantor reasonably requests in writing at times other
than upon the occurrence and during the continuation of any Event of Default,
but failure of the Collateral Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.


 


SECTION 5.5       Collateral Agent. Notwithstanding any right, power or remedy granted to
the Collateral Agent herein, or at law, in equity, admiralty or otherwise, the
Collateral Agent will not take any action that causes a violation of Section 2
or Section 9 of the Shipping Act of 1916, as amended (the “Shipping Act”). The
Collateral Agent represents and warrants unto each Secured Party that as of the
date hereof it is a United States Citizen within the meaning of Section 2 of
the Shipping Act. The Collateral Agent agrees that if to the actual knowledge
of its officers directly involved in the transactions the subject of this
Agreement the Collateral Agent is not or ceases to be a United States citizen
within the meaning of Section 2 of the Shipping Act, it will resign as
Collateral Agent in accordance with the provisions of the Loan Documents.


 


ARTICLE VI

REMEDIES


 


SECTION 6.1       Certain
Remedies. If
any Event of Default shall have occurred and be continuing:


 


(a)           The Collateral Agent may exercise in
respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may (i) require the Grantor to, and the
Grantor hereby agrees that it will, at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as directed
by the Collateral Agent and make it available to the Collateral Agent at a
place to be designated by the Collateral


 


Exhibit I-1-19





















 


Agent which is reasonably convenient to both parties,
and (ii) without notice except as specified below or, as required to be
provided by the U.C.C., sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially reasonable. The Grantor
agrees that, to the extent notice of sale shall be required by law, at least
ten (10) days’ prior notice to the Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.


 


(b)           All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
the Collateral Agent, be held by the Collateral Agent for its benefit and the
ratable benefit of the Secured Parties, as additional collateral security for,
or then or at any time thereafter be applied (after payment of any amounts
payable to the Collateral Agent pursuant to the Credit Agreement or Section
6.2 hereof) in whole or in part by the Collateral Agent for the
ratable benefit of the Secured Parties against all or any part of the Secured
Obligations in the following order:


 


(i)            first: to the payment and
satisfaction of all costs and expenses including, without limitation,
attorneys’ fees, incurred by the Collateral Agent and by the Administrative Agent
in the enforcement and administration of this Security Agreement and of any of
the other Transaction Documents;


 


(ii)           second: to the payment and
satisfaction of all the other Secured Obligations consisting of costs,
expenses, interest or fees on a pro rata basis; and


 


(iii)          third: to the payment and satisfaction
of all other Secured Obligations on a pro rata basis.


 


Any surplus of such cash or cash proceeds held by the
Collateral Agent remaining after payment in full of all of the Secured
Obligations, and the termination or expiration of all Commitments and all other
commitments of any Secured Party to any Borrower under any Loan Document,
including, without limitation, any Secured Hedge Agreement, and the termination
or expiration of all Letters of Credit, shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus.


 


SECTION 6.2       Expenses. The Grantor will upon demand pay to the
Collateral Agent and any local counsel the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its counsel and of
any experts and agents, which the Collateral Agent and any local counsel may
incur in connection herewith, including, without limitation, in connection with
(i) the administration of this Security Agreement and each other Transaction
Document, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights


 


Exhibit I-1-20





















 


of the Collateral Agent and any local counsel or any of the other
Secured Parties hereunder, or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof.


 


SECTION 6.3       Warranties. In any sale conducted pursuant hereto,
the Collateral Agent may sell the Collateral without giving any warranties or
representations as to the Collateral. The Collateral Agent may disclaim any
warranties of title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.


 


ARTICLE VII

MISCELLANEOUS PROVISIONS


 


SECTION 7.1       Loan
Document. This
Security Agreement is a Loan Document executed pursuant to the Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.


 


SECTION 7.2       Amendments;
etc. No
amendment to or waiver of any provision of this Security Agreement nor
consent to any departure by the Grantor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Collateral
Agent (with the consent of the requisite Lenders prior to the payment in full
of the Credit Extensions and the termination or expiration of the Commitments
and the Letters of Credit and thereafter with the consent of all the Secured
Hedge Counterparties), and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.


 


SECTION 7.3       Addresses
for Notices.
All notices and other communications provided
to any party hereto under this Security Agreement shall be in writing or by
facsimile and addressed, delivered or transmitted to such party at its address
or facsimile number set forth [in the Credit Agreement](10) [below its
signature hereto](11) or at such other address or facsimile number as may be
designated by such party in a notice to the other parties hereto. Any notice,
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted
(receipt electronically confirmed in the case of facsimile).










(10)         Use
for Security Agreement delivered by a Borrower.


(11)         Use for Security
Agreement delivered by a Subsidiary that is not a Borrower.


 


 


SECTION 7.4       Headings. The
various headings of this Security Agreement are inserted for convenience only
and shall not affect the meaning or interpretation of this Security Agreement
or any provisions hereof.


 


SECTION 7.5       Severability. Any provision of this
Security Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction,


 


Exhibit I-1-21





















 


be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
of this Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.


 


SECTION 7.6       Execution in
Counterparts, Effectiveness, etc. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be executed by the
Grantor and the Collateral Agent and be deemed to be an original and all of
which shall constitute together but one and the same agreement. This Security
Agreement shall become effective when counterparts hereof executed on behalf of
the Grantor and the Collateral Agent shall have been received by the Collateral
Agent.


 


SECTION 7.7       Collateral
Agent; Exculpation. By accepting the benefits of this Security Agreement, each Secured
Party hereby appoints KeyBank National Association as its collateral agent
under and for purposes of this Security Agreement. Each Secured Party
authorizes KeyBank National Association to act on behalf of such Secured Party
under this Security Agreement, to exercise such powers hereunder as are
specifically delegated to or required of the Collateral Agent by the terms
hereof, together with such powers as may be reasonably incidental thereto. Without
limiting the provisions of the Credit Agreement, neither the Collateral Agent
nor the directors, officers, employees or agents thereof shall be liable to any
Secured Party (and each Secured Party will hold the Collateral Agent harmless)
for any action taken or omitted to be taken by it under this Security
Agreement, or in connection herewith or therewith, except for the willful
misconduct or gross negligence of the Collateral Agent, or responsible for any
recitals or warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Security Agreement, or for
the creation, perfection or priority of any Liens purported to be created by
this Security Agreement, or the validity, genuineness, enforceability,
existence, value or sufficiency of any collateral security, or to make any
inquiry respecting the performance by the Grantor of its obligations hereunder.


 


SECTION 7.8       GOVERNING
LAW. THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE
LAW OF ANY OTHER JURISDICTION). This
Security Agreement, the Notes and the other Transaction Documents constitute
the entire understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with respect
thereto.


 


SECTION 7.9       FORUM
SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL AGENT OR THE GRANTOR
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW


 


Exhibit I-1-22





















 


YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY
SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE GRANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GRANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER
THIS SECURITY AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS.


 


SECTION 7.10     WAIVER OF
JURY TRIAL.
EACH SECURED PARTY
BY ACCEPTING THE BENEFITS OF THIS SECURITY AGREEMENT AND THE GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE SECURED
PARTIES OR THE GRANTOR. THE GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING INTO
THIS SECURITY AGREEMENT AND EACH OTHER TRANSACTION DOCUMENT.


 


SECTION 7.11     NO ORAL
AGREEMENTS.
THIS WRITTEN SECURITY
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL


 


Exhibit I-1-23





















 


AGREEMENT BETWEEN
THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.


 


THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES HERETO.


 


SECTION 7.12     Filing as a
Financing Statement. At the option of the Collateral Agent, this Security
Agreement, or a carbon, photographic or other reproduction of this Security
Agreement or of any U.C.C. financing statement, continuations and amendments
thereto, covering all of the Collateral or any portion thereof shall be
sufficient as a U.C.C. financing statement and may be filed as such without the
signature of the Grantor where and to the full extent permitted by applicable
law.


 


SECTION 7.13     [Binding
on Successors, Transferees and Assigns; Assignment. In addition to, and not
in limitation of, but subject to the provisions of, Section 2.3, this Security
Agreement shall be binding upon the Grantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Secured
Party and each holder of a Note and their respective successors, transferees
and assigns (to the full extent provided pursuant to Section 2.3); provided,
however, that the Grantor may not assign any of its obligations
hereunder without the prior written consent of all Lenders.](12)










(12)         Use for Security
Agreement delivered by a Subsidiary that is not a Borrower.


 


[SIGNATURES BEGIN ON FOLLOWING PAGE]


 


Exhibit I-1-24





















 


IN WITNESS WHEREOF, each of the parties hereto have caused
this Security Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.


 


	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  [U.S. SHIPPING PARTNERS
  L.P.

  
	
   

  	
   

  
	
   

  	
  By: US Shipping General
  Partner LLC, its general partner]

  
	
   

  	
  [U.S. SHIPPING OPERATING LLC]

  
	
   

  	
  [USCS CHARLESTON CHARTERING LLC]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Paul Gridley

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  



 


S-1





















 


	
   

  	
  COLLATERAL
  AGENT:

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


[SECURITY AGREEMENT BY
[ENTITY NAME]]


 


S-2





















 


Schedule I

to

Security Agreement


 


Item A. Location of Equipment


1.             See address on
Schedule III


 


Item B. Location of Inventory


1.             See address on
Schedule III


 


Item C. Location of Lock Boxes -


none


 


	
  Bank Name and Address

  	
   

  	
  Account Number

  	
   

  	
  Contact Person

  	
   

  
	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  



 


Item D. Other Accounts


 


[LaSalle Bank National Association


135 South LaSalle Street


Chicago, Illinois 60603


Account number 5800299942](13)










(13)         For Security
Agreement delivered by U.S. Shipping Partners L.P.


 


Schedule I-1





















 


Schedule II

to

Security Agreement


 


State of Formation, Etc.


 


	
  Grantor

  	
   

  	
  State of Formation/

  Identification Number

  	
   

  	
  Principal Place of Business/

  Chief Executive Office

  	
   

  
	
  [Insert Name of
  Grantor]

  	
   

  	
  Delaware [                ]

  	
   

  	
  [c/o U.S. Shipping Partners L.P.](14)

  399 Thornall Street

  Edison, NJ 08837

  	
   

  











(14)         Do not use for
Security Agreement executed by U.S. Shipping Partners L.P.


 


Schedule II-1





















 


Schedule III

to

Security Agreement


 


Location of Inventory:


 


399 Thornall Street


Edison, NJ 08837


 


[Insert any other addresses]


 


 


 


 


Location of Equipment:


 


399 Thornall Street


Edison, NJ 08837


 


Schedule III-1





















 


EXHIBIT I-2


FORM
OF [FIRST](1) [SECOND](2) AMENDMENT TO SECURITY AGREEMENT










(1)           Use for USCS
Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston LLC and
USCS ATB LLC LLC.


(2)           Use for ITB entities
and USS Chartering LLC.


 


THIS
[FIRST] [SECOND] AMENDMENT TO SECURITY AGREEMENT, dated as of November 3, 2004 (this “Amendment”), is entered into by and among [ITB
BALTIMORE LLC] [ITB GROTON LLC] [ITB JACKSONVILLE LLC] [ITB MOBILE LLC] [ITB
NEW YORK LLC] [ITB PHILADELPHIA LLC] [USS CHARTERING LLC] [USCS CHEMICAL
CHARTERING LLC] [USCS CHEMICAL PIONEER LLC] [USCS CHARLESTON LLC] [USCS ATB
LLC], a Delaware limited liability company (the “Grantor”), in favor of KEYBANK NATIONAL ASSOCIATION,
acting in its capacity as collateral agent (in such capacity including in its
capacity as a securities intermediary (either directly or indirectly through
its affiliate McDonald Investments, Inc.), as defined in the Uniform Commercial
Code as in effect from time to time in the State of New York (the “U.C.C.”), and together with its successors
and assigns in such capacities, the “Collateral
Agent”) under the Credit Agreement referenced below for the benefit
of the Secured Parties (as defined in the Credit Agreement).  Unless otherwise defined herein, defined
terms used herein have the same meanings as assigned to such terms in the
Credit Agreement.


W  I 
T  N  E 
S  S:


[WHEREAS, Grantor, United States Shipping LLC, [ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, ](3) USS Transport LLC, and
USS Vessel Management Inc. (collectively, the “Original
Borrowers”) have heretofore entered into that certain Credit
Agreement, dated as of September 13, 2002, by and among the Original Borrowers,
National City Bank, as collateral agent, and the other parties thereto, as
amended by that certain Amended and Restated Credit Agreement, dated as of
April 13, 2004, as amended by that First Amendment to Amended and Restated
Credit Agreement dated as of August 5, 2004 (as so amended, the “Existing Credit Facility”), by and among the
Original Borrowers, United States Shipping Master LLC, United States Chemical
Shipping LLC, USCS Chemical Transport LLC, USCS Chemical Chartering LLC, USCS
Chemical Pioneer LLC, and USCS Charleston LLC (collectively, the “Existing Borrowers”), the various commercial
lending institutions parties thereto (the “Existing
Lenders”), CIBC, as letter of credit issuer (in such capacity
together with its successors in such capacity, the “Letter of Credit Issuer”)
and as administrative agent for the Lenders, and National City Bank, as
collateral agent for the Secured Parties therein described (the “Existing Collateral 










(3)           Use
appropriate combination of entities.


 





















 


Agent”), pursuant to which the Existing Borrowers have
obtained commitments from the Existing Lenders pursuant to which loans were
made from time to time;](4)










(4)           Use
for ITB entities and USS Chartering LLC.


[WHEREAS, [Grantor,](5) United States Shipping
Master LLC, United States Shipping LLC, United States Chemical Shipping LLC, ITB Baltimore LLC, ITB Groton LLC,
ITB Jacksonville LLC,
ITB Mobile LLC,
ITB New York LLC, ITB
Philadelphia LLC, USS
Chartering LLC,  USS Transport LLC, USCS
Chemical Transport LLC, [USCS Chemical Chartering LLC, USCS Chemical Pioneer
LLC, and USCS Charleston LLC, ](6) each a Delaware limited liability company,
and USS Vessel Management Inc., a Delaware corporation (collectively, the “Existing Borrowers”), have heretofore entered
into that certain Amended and Restated Credit Agreement, dated as of April 13,
2004, as amended by that First Amendment to Amended and Restated Credit
Agreement dated as of August 5, 2004 (as so amended, the “Existing Credit Facility”), by and among the
Existing Borrowers, the commercial lending institutions parties thereto (the “Existing Lenders”), CIBC, as administrative
agent and letter of credit issuer, and National City Bank, as collateral agent
for the Secured Parties therein described (the “Existing
Collateral Agent”), pursuant to which the Existing Borrowers have
obtained commitments from the Existing Lenders pursuant to which loans were
made from time to time;](7)










(5)           Do not use with USCS
ATB LLC.


(6)           Use appropriate
combination of entities.


(7)           Use for USCS
Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston LLC and
USCS ATB LLC LLC.


 


WHEREAS, in connection with the Existing Credit
Facility, the Grantor[, a wholly-owned subsidiary of one or more of the
Existing Borrowers,](8) has heretofore executed and delivered that certain
Security Agreement [dated as of September 13, 2002, as amended by that certain
First Amendment to Security Agreement](9) dated as of [April 13, 2004](10) in
favor of the Existing Collateral Agent for the “Secured Parties” therein
identified ([as amended,](11) the “Security
Agreement”);










(8)           Use with USCS ATB
LLC.


(9)           Use with ITB
entities and USS Chartering LLC.


(10)         Use September 17,
2004 for USCS ATB LLC.


(11)         Use with ITB entities
and USS Chartering LLC.


 


WHEREAS, the Existing Credit Facility is being
amended and restated contemporaneously herewith pursuant to a Second Amended
and Restated Credit Agreement, dated as of November 3, 2004 (together with
all amendments, supplements, restatements and other modifications, if any, from
time to time thereafter made thereto, the “Credit
Agreement”), by and among Grantor, U.S. Shipping Partners L.P., a
Delaware limited partnership, U.S. 


 


 


Exhibit
I-2 - 2





















 


Shipping Operating
LLC, [ITB Baltimore LLC, ITB
Groton LLC, ITB
Jacksonville LLC, ITB Mobile
LLC, ITB New York
LLC, ITB Philadelphia LLC, USS Chartering LLC,
USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston LLC,
USCS ATB LLC](12) and USCS Charleston Chartering LLC, each a Delaware limited
liability company (each of the foregoing entities individually a “Borrower” and collectively, the “Borrowers”), the various commercial lending
institutions as are, or may from time to time become parties thereto
(individually, a “Lender” and
collectively, the “Lenders”), CIBC, as
letter of credit issuer (in such capacity together with its successors in such
capacity, the “Letter of Credit Issuer”) and as administrative agent for
the Lenders, and the Collateral Agent;










(12)         Use appropriate combination
of entities.


 


WHEREAS, contemporaneously in connection with
the execution of the Credit Agreement, all rights, titles, interests and
obligations of the Existing Collateral Agent under the Security Agreement have
been assigned by the Existing Collateral Agent to the Collateral Agent pursuant
to that certain Assignment of Liens and Security Interests dated as of even
date herewith;


WHEREAS, the Borrowers have entered into or may
from time to time enter into Hedge Agreements with certain Hedge Counterparties
as permitted under the terms of the Credit Agreement; and


WHEREAS, as a condition precedent to the making
of the Loans and the issuance of the Letters of Credit under the Credit
Agreement for the purpose of extending, renewing and continuing loans under the
Existing Credit Facility, and to the extension of financial accommodations
under the Hedge Agreements referred to above, the Grantor is required to
execute and deliver this Amendment;


WHEREAS, the Grantor has duly authorized the
execution, delivery and performance of this Amendment; and


WHEREAS, it is in the best interests of the
Grantor to execute this Amendment inasmuch as the Grantor will derive
substantial direct and indirect benefits from the extension, renewal and
continuation of the corresponding loans under the Existing Credit Facility and
from Loans made from time to time to, and the Letters of Credit issued on
behalf of, the Borrowers by the Lenders and/or the Letter of Credit Issuer
pursuant to the Credit Agreement and the financial accommodations made from
time to time to the Borrowers by Secured Hedge Counterparties pursuant to the
Hedge Agreements.


NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and in order to induce the
Lenders and the Letter of Credit Issuer to make Loans (including for the
purpose of extending, renewing and continuing loans under the Existing Credit
Facility) to, and/or issue or participate in Letters of Credit for the account
of, the Borrowers pursuant to the Credit Agreement and to induce the Secured
Hedge Counterparties to extend financial accommodations pursuant to the Secured
Hedge Agreements, 


 


Exhibit I-2 - 3





















 


the Grantor and the Collateral Agent hereby agree, for the benefit of
each Secured Party, to amend the Security Agreement as follows:


SECTION 1.           Each
reference in the Security Agreement to “Collateral Agent” shall be deemed to be
a reference to “Collateral Agent” as defined herein.


SECTION 2.           Amendment
of Recitals.  The First Recital of
the Security Agreement is hereby amended by deleting its text in its entirety
and inserting the following text in lieu thereof:


“WHEREAS, pursuant to a Second Amended and Restated Credit
Agreement, dated as of November 3, 2004 (together with all amendments,
supplements, restatements and other modifications, if any, from time to time
thereafter made thereto, the “Credit Agreement”),
by and among Grantor, U.S. Shipping Partners L.P., a Delaware limited partnership,
U.S. Shipping Operating LLC, [ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering LLC, USCS
Chemical Pioneer LLC, USCS Charleston LLC, USCS ATB LLC](13) and USCS
Charleston Chartering LLC, each a Delaware limited liability company (each of
the foregoing entities individually a “Borrower”
and collectively, the “Borrowers”), the
various financial institutions as are or may become parties thereto (collectively,
the “Lenders”), Canadian Imperial Bank
of Commerce, as letter of credit issuer (in such capacity together with its
successors in such capacity, the “Letter of Credit Issuer”) and as
administrative agent for the Lenders (in such capacity together with its
successors in such capacity, the “Administrative Agent”), and the
Collateral Agent, the Lenders and the Letter of Credit Issuer have extended
Commitments to make Credit Extensions to the Borrowers;”.










(13)         Use
appropriate combination of entities.


SECTION 3.           Amendment
of Section 1.1.  Section 1.1 of the
Security Agreement is hereby amended by adding the following new definitions in
the appropriate place:


[“Guaranty” means that certain Guaranty in
favor of the Collateral Agent executed and delivered by Grantor dated as of
even date herewith.](14)










(14)         Use
for USCS Chemical Pioneer LLC and USCS Chemical Chartering LLC.


 


“Securities Intermediary” means McDonald
Investments, Inc., an affiliate of the Collateral Agent, acting in its capacity
as securities intermediary as defined in the U.C.C.


SECTION 4.           Amendment
of Section 2.2.  Section 2.2 of the
Security Agreement is hereby amended [(a) by adding the text “the Guaranty,”
immediately after the text “the Notes,” 


 


 


Exhibit I-2 - 4


 





















 


and (b)](15)by
adding the text “and each other Loan Party” immediately after the text “of the
Borrowers” in each of the two places where such text appears.










(15)         Use
for USCS Chemical Pioneer LLC and USCS Chemical Chartering LLC.


SECTION 5.           Amendment
of Section 2.4.  Section 2.4 of the
Security Agreement is hereby amended (a) by adding the text “nor the Securities
Intermediary” immediately after the text “neither the Collateral Agent”, and
(b) by adding the text “or the Securities Intermediary” immediately after the
text “nor shall the Collateral Agent”, in each case in clause (c) thereof.


SECTION 6.           Amendment
of Section 2.5.  Section 2.5 of the
Security Agreement is hereby amended (a) by adding the text “or any other Loan
Party” immediately after the text “against any Borrower” in clause (b)(i)
thereof, and (b) by adding the text “any other Loan Party,” immediately after
the text “any Borrower” in clause (g) thereof.


SECTION 7.           Amendment
of Section 2.6.  Section 2.6 of the
Security Agreement is hereby amended by adding the text “or any other Loan
Party” immediately after (a) the text “acquire against any other Borrower”, (b)
the text “any Secured Party against any Borrower”, and (c) the text “receive
from any Borrower”.


SECTION 8.           Amendment
of Section 3.1.11.  Section 3.1.11 of
the Security Agreement is hereby amended by deleting the text [“October 31,
2002”](16) [“May 31, 2004”](17) [“September 30, 2004”](18) and inserting the
text “December 15, 2004” in lieu thereof.










(16)         Use for ITB entities
and USS Chartering LLC.


(17)         Use for Chemical
Chartering, Chemical Pioneer and Charleston.


(18)         Use for USCS ATB LLC.


 


SECTION 9.           Amendment
of Section 4.1.1.  Section 4.1.1 of
the Security Agreement is hereby amended by inserting the text “material”
immediately before the text “Equipment; and”.


SECTION 10.         Amendment
of Section 7.7.  Section 7.7 of the
Security Agreement is hereby amended by deleting the text “National City Bank”
in each place where it appears and inserting the text “KeyBank National
Association” in lieu thereof.


SECTION 11.         Amendment
of Schedule II.  Schedule II to the
Security Agreement is hereby amended by deleting the text “USS Vessel
Management Inc.” and replacing with the text “U.S. Shipping Partners L.P.” in
lieu thereof.


SECTION 12.         Reaffirmation of Representations and Warranties.  The Grantor hereby represents and warrants
unto the Collateral Agent and each Lender that all of its representations and
warranties contained in Article III of the Security Agreement are true and
correct.


SECTION 13.         Reaffirmation of Security Agreement.  This Amendment shall be deemed to be an
amendment to the Security Agreement, and the Security Agreement, as amended
hereby, 


 


 


Exhibit
I-2 - 5





















 


is hereby ratified,
approved and confirmed in each and every respect.  All references to the Security Agreement in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Security Agreement as amended hereby and as from time to time
hereafter amended, restated, supplemented or otherwise modified.


SECTION 14.         Re-Grant of Security Interest.  The Grantor hereby pledges, hypothecates,
assigns, charges, mortgages, delivers and transfers to the Collateral Agent for
its benefit and the ratable benefit of each of the Secured Parties, and hereby
grants to the Collateral Agent for its benefit and the ratable benefit of each
of the Secured Parties, a continuing security interest in all of the Grantor’s
right, title and interest, whether now existing or hereafter arising or
acquired, in and to all of the Collateral described in the Security Agreement
(as amended hereby).


SECTION 15.         Governing Law; Severability.  THIS
AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION).  Any provision of this Amendment or the
Security Agreement (as amended by this Amendment) which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Amendment or affecting the validity or enforceability of such provision in any
other jurisdiction.


SECTION 16.         NO ORAL AGREEMENTS.  THIS WRITTEN
AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.


THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES HERETO.


SECTION 17.         Execution and Counterparts, Effectiveness.  This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be executed by the Grantor
and the Collateral Agent and be deemed to be an original and all of which shall
constitute together but one and the same agreement.  This Amendment shall become effective when
counterparts hereof executed on behalf of the Grantor and the Collateral Agent
shall have been received by the Collateral Agent.


SECTION 18.         Successors and Assigns.  This terms of this Amendment shall (a) be
binding upon the Grantor and its successors, transferees and assigns; and (b)
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Collateral Agent and each other Secured Party and their
respective successors, transferees, and assigns.  Without limiting the generality of the
foregoing clause (b), any Secured Party
may assign or otherwise transfer (in whole or in part) any Note or any Loan
held by it as provided in Section 10.11.1
of the Credit Agreement and any Secured Hedge Counterparty may assign or
otherwise transfer (in whole or in part) its interest pursuant to any Secured
Hedge Agreement, and any successor or assignee thereof shall thereupon become
vested with all of the rights and benefits in respect 


 


Exhibit
I-2 - 6





















 


thereof granted to
such Secured Party under any such Loan Document including any Secured Hedge
Agreement (including this Amendment), or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and as applicable to the
provisions of Section 10.11.1 and Article IX of the Credit Agreement.


[Signatures on following pages]


 


Exhibit I-2 - 7





















 


IN
WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the day and year first
above written.


 


[ITB BALTIMORE LLC] 

[ITB GROTON LLC] 

[ITB JACKSONVILLE LLC] 

[ITB MOBILE LLC] 

[ITB NEW YORK LLC] 

[ITB PHILADELPHIA LLC] 

[USS CHARTERING LLC] 

[USCS CHEMICAL CHARTERING LLC]

[USCS CHEMICAL PIONEER LLC]

[USCS CHARLESTON LLC]

[USCS ATB LLC]


 







	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


Exhibit I-2 - 8





















 


COLLATERAL
AGENT:


 


KEYBANK NATIONAL
ASSOCIATION


 


 


	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


 


 


Exhibit
I-2 - 9










 















EXHIBIT J


 


FORM OF GUARANTY


 


THIS GUARANTY (this “Guaranty”),
dated as of November  3, 2004, made by [USCS CHEMICAL PIONEER LLC] [USCS CHEMICAL
CHARTERING LLC], a Delaware limited liability company (together with
its permitted successors and assigns, the “Guarantor”),
in favor of KEYBANK
NATIONAL ASSOCIATION, as Collateral Agent under the Credit Agreement
referred to below (in such capacity, together with its successors and assigns,
the “Collateral Agent”) for the benefit
of the Secured Parties (as defined below).


W I
T N E S S E T H:


WHEREAS, pursuant to the terms of a certain Second Amended
and Restated Credit Agreement dated as of November 3, 2004 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) by and among
[Guarantor,](1) U.S. Shipping Partners L.P., a Delaware limited partnership
(the “MLP”), U.S. Shipping Operating
LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC,
ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, [USCS Chemical
Chartering LLC, USCS Chemical Pioneer LLC,](2) USCS Charleston Chartering LLC,
USCS Charleston LLC, and USCS ATB LLC, each a Delaware limited liability
company (collectively, the “Borrowers”),
the various financial institutions as are or may become parties thereto
(collectively, the “Lenders”), Canadian
Imperial Bank of Commerce (“CIBC”), as
letter of credit issuer (the “Letter of Credit
Issuer”), CIBC, as administrative agent for the Lenders (in such
capacity together with its successors in such capacity, the “Administrative
Agent”), and the Collateral Agent, the Lenders and Letter of Credit Issuer
have extended Commitments to make Credit Extensions to the Borrowers;










(1)           Delete for Guaranty
delivered by a Subsidiary that is not a Borrower.


(2)           Delete entity that
is the Guarantor.


 


[WHEREAS, the Guarantor
is a [direct] [indirect] wholly-owned subsidiary of MLP;]  (3)










(3)           Use
for Guaranty delivered by a Subsidiary that is not a Borrower.


 


WHEREAS, the Guarantor or
one or more other Loan Parties have entered into or may enter into certain
Hedge Agreements (as defined in the Credit Agreement) with one or more Lenders
or Affiliates of a Lender (together with their respective successors and
assigns, the “Secured Hedge Counterparties”)
pursuant to the terms of the Credit Agreement (the “Secured
Hedge Agreements”);


WHEREAS, it is a condition to the funding of the Loans and
the issuance of Letters of Credit under the Credit Agreement, and to the
extension of financial accommodations under the Hedge Agreements referred to
above, that the Guarantor execute and deliver this Guaranty;


WHEREAS, the Guarantor
has duly authorized the execution, delivery and performance of this Guaranty;


 





















 


NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby acknowledged, and in
order to induce the Lenders and the Letter of Credit Issuer to enter into the
Credit Agreement and to make Credit Extensions to the Borrowers pursuant to the
Credit Agreement, and to induce the Secured Hedge Counterparties to enter into
the Secured Hedge Agreements, the Guarantor agrees, for the benefit of each
Secured Party, as follows:


ARTICLE I



DEFINITIONS


SECTION 1.1         Certain Terms.  The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):


“Administrative Agent” is defined in the first recital.


“Borrower” and “Borrowers”
is defined in the first recital.


“Collateral Agent” is defined in the preamble.


“Credit Agreement” is defined in the fourth recital.


“General Partner” means US Shipping General
Partner LLC, the sole general partner of MLP.


“Guarantor” is defined in the preamble.


“Guaranty” is defined in the preamble.


“Lenders” is defined in the first recital.


“Letter of Credit Issuer” is defined in the first
recital.


“MLP” is defined in the first recital.


“Secured Hedge Agreement” is defined in the [second](4)
recital.


“Secured Hedge Counterparty” is defined in the
[second](5) recital.










(4)           Use “third” for
Guaranty delivered by a Subsidiary that is not a Borrower.


(5)           Use “third” for
Guaranty delivered by a Subsidiary that is not a Borrower.


 


“Secured Party” means, as the context may
require, any and all of the Administrative Agent, the Collateral Agent, any
Secured Hedge Counterparty, the Letter of Credit Issuer and any Lender, and
each of their respective successors, transferees and assigns and any Affiliate
of any of the foregoing party from time to time to any Hedging Agreement with
the Borrowers or any other Loan Party.


 


2





















 


“U.C.C.” means the Uniform Commercial Code as
in effect in the State of New York, as the same may be amended from time to
time.


SECTION 1.2         Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Guaranty, including its preamble
and recitals, have the meanings provided in the Credit Agreement.


SECTION 1.3         U.C.C.
Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Guaranty, including its preamble
and recitals, with such meanings.


ARTICLE II



GUARANTY PROVISIONS


SECTION 2.1         Guaranty.  The Guarantor hereby absolutely,
unconditionally and irrevocably


(a)           guarantees the full
and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Obligations
of the Borrowers and each other Loan Party now or hereafter existing under the
Credit Agreement, the Notes, each Secured Party Hedge Agreement, and each other
Loan Document to which any Borrower or any such other Loan Party is or may
become a party, whether for principal, interest, fees, expenses or otherwise
(including all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)), and


(b)           indemnifies and
holds harmless each Secured Party and each holder of a Note for any and all
costs and expenses (including reasonable attorney’s fees and expenses) incurred
by such Secured Party or such holder, as the case may be, in enforcing any
rights under this Guaranty;


provided, however,
that the Guarantor shall be liable under this Guaranty for the maximum amount
of such liability that can be hereby incurred without rendering this Guaranty,
as it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater
amount.  This Guaranty constitutes a
guaranty of payment when due and not of collection, and the Guarantor
specifically agrees that it shall not be necessary or required that any Secured
Party or any holder of any Note exercise any right, assert any claim or demand
or enforce any remedy whatsoever against the Borrowers or any other Loan Party
(or any other Person) before or as a condition to the obligations of the
Guarantor hereunder.


SECTION 2.2         Acceleration
of Guaranty.  The Guarantor agrees
that, in the event of the dissolution or insolvency of any Borrower, the General
Partner, any other Loan Party or the Guarantor, or the inability or failure of
any Borrower, the General Partner, any other Loan Party or the Guarantor to pay
debts as they become due, or an assignment by any Borrower, the General
Partner, any other Loan Party or the Guarantor for the benefit of creditors, or
the 


 


3





















 


commencement of
any case or proceeding in respect of any Borrower, the General Partner, any
other Loan Party or the Guarantor under any bankruptcy, insolvency or similar
laws, and if such event shall occur at a time when any of the Obligations of
any Borrower and each other Loan Party may not then be due and payable, the
Guarantor will pay to the Lenders forthwith the full amount which would be
payable hereunder by the Guarantor if all such Obligations were then due and
payable.


SECTION 2.3         Guaranty
Absolute, etc.  This Guaranty shall
in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until all
Obligations of each Borrower and each other Loan Party have been indefeasibly
paid in full in cash, all obligations of the Guarantor hereunder shall have
been indefeasibly paid in full in cash and all Commitments shall have
terminated or expired and all Letters of Credit shall have terminated or
expired.  The Guarantor guarantees that
the Obligations of each Borrower and each other Loan Party will be paid
strictly in accordance with the terms of the Credit Agreement and each other
Loan Document under which they arise, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Secured Party or any holder of any Note with respect
thereto.  The liability of the Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of (a) any lack of validity, legality or enforceability of the
Credit Agreement, any Note or any other Loan Document; (b) the failure of any
Secured Party or any holder of any Note (i) to assert any claim or demand or to
enforce any right or remedy against any Borrower, any other Loan Party or any
other Person (including any other guarantor) under the provisions of the Credit
Agreement, any Note, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
Obligations of any Borrower or any other Loan Party; (c) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations of any Borrower or any other Loan Party, or any other extension,
compromise or renewal of any Obligation of any Borrower or any other Loan
Party; (d) any reduction, limitation, impairment or termination of any Obligations
of any Borrower or any other Loan Party for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to (and the Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations of any Borrower, any other Loan Party or otherwise; (e) any
amendment to, extension, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the Credit Agreement, any Note
or any other Loan Document; (f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any other guaranty, held by any
Secured Party or any holder of any Note securing any of the Obligations of any
Borrower or any other Loan Party; or (g) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, any Borrower, any other Loan Party, any surety or any guarantor.


SECTION 2.4         Reinstatement,
etc.  The Guarantor agrees that  this Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment (in whole or
in part) of any of the Obligations is rescinded or must otherwise be restored
by any Secured Party or any holder of any Note, upon the insolvency, bankruptcy
or reorganization of 


 


4





















 


any Borrower, the
General Partner, any other Loan Party or otherwise, all as though such payment
had not been made.


SECTION 2.5         Waiver, etc. The Guarantor
hereby expressly waives promptness, diligence, presentment, notice of
acceptance and any other notice with respect to any of the Obligations of any
Borrower or any other Loan Party and this Guaranty and any requirement that the
Collateral Agent, any other Secured Party or any holder of any Note protect,
secure, perfect or insure any security interest or Lien, or any property
subject thereto, or exhaust any right or take any action against any Borrower,
any other Loan Party or any other Person (including any other guarantor) or
entity or any collateral securing the Obligations of any Borrower or any other
Loan Party, as the case may be.


SECTION 2.6         Waiver
of Subrogation.  Until one year and
one day after the indefeasible payment in full in cash of all Obligations, the
termination and expiration of all Commitments and all other commitments of the
Secured Parties under the Loan Documents, including, without limitation, the
Secured Hedge Agreements, and the termination and expiration of all Letters of
Credit, the Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against any Borrower or any other Loan Party
that arise from the existence, payment, performance or enforcement of the
Guarantor’s obligations under this Guaranty or any other Loan Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the Secured
Parties against any Borrower or any other Loan Party or any collateral which the
Collateral Agent now has or hereafter acquires, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including the right to take or receive from any Borrower or any other Loan
Party, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights.  If any amount shall be paid to the Guarantor
in violation of the preceding sentence and the Obligations shall not have been
indefeasibly paid in cash in full and all Commitments and all other commitments
by any Secured Party to any Borrower under the Loan Documents, including,
without limitation, the Secured Hedge Agreements, have not been terminated or
expired and all Letters of Credit have not been terminated or expired, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for, the Secured Parties, and shall forthwith be paid to the
Secured Parties to be credited and applied upon the Obligations, whether
matured or unmatured.  The Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that the waiver
set forth in this Section 2.6 is
knowingly made in contemplation of such benefits.


SECTION 2.7         Successors,
Transferees and Assigns; Transfers of Notes, etc.  This Guaranty shall (a) be binding upon the
Guarantor, and its successors, transferees and assigns (provided that the
Guarantor may not assign any of its obligations hereunder without the prior
written consent of the Lenders in accordance with the Credit Agreement) and (b)
inure to the benefit of and be enforceable by the Collateral Agent and each
other Secured Party.


Without limiting the
generality of the foregoing clause (b), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Credit Extension held by
it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including this Guaranty) or 


 


5





















 


otherwise, subject,
however, to any contrary provisions in such assignment or transfer, and to the
provisions of Section 10.11 and Article IX of the Credit Agreement.


ARTICLE III



REPRESENTATIONS AND WARRANTIES


SECTION 3.1         Representations
and Warranties.  The Guarantor hereby
represents and warrants unto each Secured Party [that all representations and
warranties made by the Guarantor in Article VI of the Credit Agreement or in
any other Loan Document are true and correct.](6) [(a) that all representations
and warranties made by any Borrower with respect to the Guarantor as set forth
in Article VI of the Credit Agreement or any other Loan Document are true and
correct as of the date hereof as if such representations or warranties were set
forth in full in this Guaranty and made by the Guarantor and (b) as set forth
below in Sections 3.2 through Section 3.6.](7)










(6)           Use for Guaranty
delivered by a Borrower.


(7)           Use for Guaranty
delivered by a Subsidiary that is not a Borrower.


 


SECTION 3.2         [Organization, etc.  Each of the Guarantor and each Subsidiary of
the Guarantor is a partnership, limited liability company or corporation, as
the case may be, validly organized and existing and in good standing under the
laws of the State of Delaware, is duly qualified to do business and is in good
standing as a foreign partnership, limited liability company or corporation, as
the case may be, in each jurisdiction where the nature of their respective
business require such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect
and have full limited liability company, partnership or corporate, as the case
may be, power and authority and hold all requisite governmental licenses,
permits and other approvals (a) to enter into and perform their
Obligations under this Guaranty and each other Transaction Document to which
they are a party and (b) to own and hold under lease their respective
property and to conduct their respective business substantially as currently
conducted by each of them, except in the case of clause
(b), where the failure to have licenses, permits and other approvals
could not reasonably be expected to have a Material Adverse Effect.


SECTION 3.3         Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by
the Guarantor of this Guaranty and each other Transaction Document executed or
to be executed by it is within the Guarantor’s limited liability company,
partnership or corporate, as applicable, powers, have been duly authorized by
all necessary company action, and do not


(a)           contravene the
Guarantor’s or any other Loan Party’s Organic Documents;


(b)           contravene any
contractual restriction, law or governmental regulation or court decree or
order binding on or affecting the Guarantor or any other Loan Party; or


(c)           result in, or
require the creation or imposition of, any Lien on any of the Guarantor’s or
any other Loan Party’s properties (except those specifically created pursuant
to the Transaction Documents).


 


6





















 


SECTION 3.4         Validity, etc.  This Guaranty constitutes, and each other
Transaction Document executed by the Guarantor will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of the
Guarantor enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally, by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and an implied
covenant of good faith and fair dealing.


SECTION 3.5         Informed on Financial Condition.  The Guarantor has knowledge of the Borrowers’
and each other Loan Party’s financial condition and affairs and has adequate
means to obtain from the Borrowers and each other Loan Party on an ongoing
basis information relating thereto and to the Borrowers’ and such Loan Party’s
ability to pay and perform the Obligations, and agrees to assume the
responsibility for keeping, and to keep, so informed for so long as this
Guaranty is in effect.  The Guarantor
acknowledges and agrees that the Secured Parties shall have no obligation to
investigate the financial condition or affairs of any Loan Party for the
benefit of the Guarantor nor to advise the Guarantor of any fact respecting, or
any change in, the financial condition or affairs of the Borrowers or any other
Loan Party that might become known to any Secured Party at any time, whether or
not such Secured Party knows or believes or has reason to know or believe that
any such fact or change is unknown to the Guarantor, or might (or does)
materially increase the risk of the Guarantor as guarantor, or might (or would)
affect the willingness of the Guarantor to continue as a guarantor of the
Obligations.](8)










(8)           Use for Guaranty
delivered by a Subsidiary that is not a Borrower.


 


 


SECTION 3.6         Benefit
to Guarantor.  The Guarantor
represents that it is in the best interests of the Guarantor to execute this
Guaranty inasmuch as the Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to, and the Letters of Credit
issued on behalf of, the Borrowers by the Lenders and/or Letter of Credit
Issuer pursuant to the Credit Agreement, and the financial accommodations made
from time to time to the Borrowers or any Guarantor by the Secured Hedge
Counterparties pursuant to the Hedge Agreements, the Guarantor is willing to
guarantee the obligations of the Borrowers and the other Loan Parties under the
Credit Agreement, any Note, any Secured Hedge Agreement, and the other Loan
Documents, and the Guarantor agrees that the Secured Parties are relying on
this representation in agreeing to make Credit Extensions to the Borrowers.


 


ARTICLE IV



COVENANTS, ETC.


SECTION 4.1         Affirmative
Covenants.  The Guarantor covenants
and agrees that, until the indefeasible payment in full in cash of all
Obligations and the termination or expiration of all Commitments, and all other
commitments of the Secured Parties under the Loan Documents, including, without
limitation, the Secured Hedge Agreements, and all Letters of Credit, the
Guarantor will, unless the requisite number of Lenders, as set forth in the
Credit Agreement, shall otherwise consent in writing, perform, comply with and
be bound by each of 


 


7





















 


the agreements,
covenants and obligations set forth in Section 7.1 of the Credit Agreement
as if such obligations were set forth in full in this Guaranty and as if such
obligations were undertaken by the Guarantor.


SECTION 4.2         Negative
Covenants.  The Guarantor covenants
and agrees that, until the indefeasible payment in full in cash of all
Obligations and the termination or expiration of all Commitments, and all other
commitments of the Secured Parties under the Loan Documents, including, without
limitation, the Secured Hedge Agreements, and all Letters of Credit, the
Guarantor will not, without the prior written consent of the requisite number
of Lenders, as set forth in the Credit Agreement, do anything prohibited by
Section 7.2 of the Credit Agreement as if each such prohibition was set
forth in full in this Guaranty and as if each such prohibition was applicable
to the Guarantor.


ARTICLE V



MISCELLANEOUS PROVISIONS


SECTION 5.1         Loan
Document.  This Guaranty is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.


SECTION 5.2         Binding
on Successors, Transferees and Assigns; Assignment.  In addition to, and not in limitation of, but
subject to the provisions of, Section 2.7, this Guaranty shall be
binding upon the Guarantor and its successors, transferees and assigns and
shall inure to the benefit of and be enforceable by each Secured Party and each
holder of a Note and their respective successors, transferees and assigns (to
the full extent provided pursuant to Section 2.7); provided, however,
that the Guarantor may not assign any of its obligations hereunder without the
prior written consent of all Lenders.


SECTION 5.3         Amendments,
etc.  No amendment to or waiver of
any provision of this Guaranty, nor consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent (with the consent of the requisite Lenders
prior to the payment in full of the Credit Extensions and the termination or
expiration of the Commitments and the Letters of Credit and thereafter with the
consent of all the Secured Hedge Counterparties), and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.


SECTION 5.4         Addresses
for Notices to the Guarantor.  All
notices and other communications hereunder to the Guarantor shall be in writing
(including telegraphic communication) and mailed or telegraphed or delivered to
it, addressed to it at the address set forth below its signature hereto or at
such other address as shall be designated by the Guarantor in a written notice
to the Collateral Agent at the address specified in the Credit Agreement
complying as to delivery with the terms of this Section.  Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when received; any notice, if transmitted
(receipt electronically confirmed in the case of facsimile).


 


8





















 


SECTION 5.5         No
Waiver; Remedies.  In addition to,
and not in limitation of, Section 2.3
and Section 2.5, no failure on the part
of any Secured Party or any holder of a Note to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.


SECTION 5.6         Section
Captions.  Section captions used in
this Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.


SECTION 5.7         Setoff.  In addition to, and not in limitation
of, any rights of any Secured Party or any holder of a Note under
applicable law, each Secured Party and each such holder shall, upon the
occurrence of any Default described in clauses (a) through (d) of Section 8.1.9
of the Credit Agreement or any Event of Default, have the right to appropriate
and apply to the payment of the obligations of the Guarantor owing to it
hereunder, whether or not then due, and the Guarantor hereby grants to each
Secured Party and each such holder a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Guarantor then or
thereafter maintained with such Secured Party or such holder and any and all
property of every kind or description of or in the name of the Guarantor now or
hereafter, for any reason or purpose whatsoever, in the possession or control
of, or in transit to, such Secured Party, such holder or any agent or bailee
for such Secured Party or such holder; provided,
however, that any such appropriation
and application shall be subject to the provisions of Section 4.8 of the Credit
Agreement.


SECTION 5.8         Severability.  Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Guaranty
or affecting the validity or enforceability of such provision in any other
jurisdiction.


SECTION 5.9         Governing
Law, Entire Agreement, etc.  THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICT OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).  THIS GUARANTY AND THE OTHER TRANSACTION
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.


SECTION 5.10       Forum
Selection and Consent to Jurisdiction. 
ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR THE GUARANTOR SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK IN
THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW 


 


9





















 


YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT’S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OF OTHER PROPERTY MAY
BE FOUND.  THE GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK. 
THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER
TRANSACTION DOCUMENTS.


SECTION 5.11       Waiver of Jury Trial.  EACH SECURED PARTY BY
ACCEPTING THE BENEFITS OF THIS GUARANTY AND THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE SECURED PARTIES OR THE GUARANTOR.  THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE
CREDIT AGREEMENT.


SECTION 5.12       NO ORAL
AGREEMENTS.  THIS WRITTEN GUARANTY AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF 


 


10





















 


PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.


THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.


 


11





















 


                IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.


 


 


	
   

  	
  [USCS
  CHEMICAL PIONEER LLC]

  
	
   

  	
  [USCS
  CHEMICAL CHARTERING LLC],

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Paul Gridley

  
	
   

  	
  Title:Chairman and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o U.S. Shipping
  Partners L.P.

  
	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
  Edison, NJ 08837

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  732-635-1940

  
					



 


 


 


S - 1










 















EXHIBIT K-1


FORM
OF SECOND OMNIBUS ACKNOWLEDGMENT 

AND AMENDMENT OF AGREEMENTS


THIS
SECOND OMNIBUS ACKNOWLEDGMENT AND AMENDMENT OF AGREEMENTS, dated as of November 3, 2004 (this
“Second Omnibus Acknowledgment”), is
entered into by and among AMERADA HESS CORPORATION, a Delaware corporation (“Hess”), USS CHARTERING LLC, a Delaware
limited liability company (“Charter LLC”),
and KEYBANK
NATIONAL ASSOCIATION as Collateral Agent (together with its
successors in such capacity, the “Collateral Agent”).  Unless otherwise defined herein, defined
terms used herein have the same meanings as assigned to such terms in the
Second Amended and Restated Credit Agreement (as defined below).


W  I 
T  N  E 
S  S:


WHEREAS, Hess and Charter LLC entered into a
Support Agreement dated as of September 13, 2002, as amended by that
Omnibus Acknowledgment and Amendment of Agreements dated as of April 13, 2004
(said agreement, together with each of the Schedules thereto, as so amended,
the “Support Agreement”) in consideration for and in connection with the
purchase of vessels by various affiliates of Charter LLC from various
affiliates of Hess pursuant to that certain Asset Purchase Agreement dated as
of July 18, 2002 by and among Hess, Charter LLC, various affiliates of
Hess and various affiliates of Charter LLC;


WHEREAS, Hess is the charterer under a time
charter dated September 1, 2002 entered into with Charter LLC;


WHEREAS, Charter LLC, United States Shipping
Master LLC (“Shipping Master”), United States Shipping LLC,
ITB Baltimore LLC,
ITB Groton LLC,
ITB Jacksonville LLC,
ITB Mobile LLC,
ITB New York LLC,
ITB Philadelphia LLC,
USS Transport LLC, USS Vessel Management Inc., USCS Chemical Shipping, USCS
Chemical Transport LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer
LLC, and USCS Charleston LLC (collectively, the “Original
Borrowers” and individually, an “Original
Borrower”) have heretofore entered into that certain Amended and
Restated Credit Agreement, dated as of April 13, 2004, as amended by that
First Amendment to Amended and Restated Credit Agreement, dated as of August 5,
2004 (the “Existing Credit Facility”),
by and among the Original Borrowers, the commercial lending institutions
parties thereto (the “Existing Lenders”),
Canadian Imperial Bank of Commerce (“CIBC”),
as administrative agent for the Lenders, CIBC, as issuer of the letters of
credit, and National City Bank as the collateral agent (the “Existing Collateral Agent”);


WHEREAS, in connection with the Existing Credit
Facility, (i) Hess, Charter LLC and the Existing Collateral Agent have
heretofore executed and delivered that certain Consent and Agreement dated as
of September 13, 2002, as amended by that Omnibus Acknowledgment and Amendment
of Agreements dated as of April 13, 2004 (as so amended, the “Consent”) and (ii) Hess and the Existing
Collateral Agent have heretofore executed and delivered that certain Consent
and Agreement (Support Agreement) dated as of September 13, 2002 which was
also signed by CIBC, as administrative agent, and acknowledged and agreed to by
Charter LLC, as 


 


Exhibit
K-1 - 1





















 


amended by that
Omnibus Acknowledgment and Amendment of Agreements dated as of April 13,
2004 (as so amended, the “Support Consent”);


WHEREAS, Shipping Master intends to reorganize
and restructure in part by creating U.S. Shipping Partners L.P. (the “Parent”) and offering ownership of the Parent
to the public through the sale of common units representing limited partner
interests in the Parent pursuant to a Registration Statement on Form S-1 (No.
333-118141) (the “Equity Offering”);


WHEREAS, the Existing Credit Facility is being
amended and restated pursuant to a Second Amended and Restated Credit
Agreement, dated as of November 3, 2004 (as amended, supplemented, renewed,
refinanced, extended, increased, restated or otherwise modified from time to
time thereafter, the “Second Amended and Restated
Credit Agreement”), by and among Charter LLC, Parent, U.S. Shipping
Operating LLC, ITB Baltimore LLC,
ITB Groton LLC,
ITB Jacksonville LLC,
ITB Mobile LLC,
ITB New York LLC,
ITB Philadelphia LLC,
USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston LLC,
USCS Charleston Chartering LLC and USCS ATB LLC (each of the foregoing entities
individually a “Borrower” and
collectively, the “Borrowers”), the
various commercial lending institutions as are, or may from time to time,
become parties thereto (individually, a “Lender”
and collectively, the “Lenders”), CIBC,
as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative
Agent”), and as issuer of the letters of credit (in such capacity,
together with its successors in such capacity, the “Letter
of Credit Issuer”), and the Collateral Agent (the Collateral Agent,
the Lenders, the Administrative Agent, the Letter of Credit Issuer and the
counterparties to certain hedge agreements hereinafter collectively referred to
as the “Secured Parties”);


WHEREAS, KeyBank National Association has
succeeded the Existing Collateral Agent as the Collateral Agent (as defined in
each of the Consent and Support Consent) pursuant to that certain Assignment of
Liens and Security Interests, dated November 3, 2004, by and between National
City Bank, as the former collateral agent, and KeyBank National Association, as
Collateral Agent; and


WHEREAS, it is a condition to the obligations of
the Secured Parties under the Second Amended and Restated Credit Agreement that
Hess execute and deliver this Second Omnibus Acknowledgment.


NOW,
THEREFORE, in consideration of the foregoing, and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby
agree, for the benefit of each Secured Party, as follows:


SECTION 1.           Acknowledgment.  Hess hereby acknowledges (a) that the Credit
Agreement referred to in each of the Support Agreement, Consent, and Support
Consent has been amended, restated, and extended, and the loan commitments
thereunder refinanced, pursuant to the Second Amended and Restated Credit
Agreement; and (b) the refinancing, refunding, renewals and extended maturity
of the Loans as set forth in the Second Amended and Restated Credit Agreement,
the Equity Offering, and its related transactions (as contemplated by the
Contribution Agreement).


 


Exhibit
K-1 - 2





















 


SECTION 2.           Ratification. 
Hess and each of the parties hereto, if a signatory thereto, hereby
ratifies, approves, and confirms the terms and continued effectiveness of each
of the Support Agreement, Consent, and Support Consent (including without
limitation Section 4(g) thereof), each as amended by Section
3 hereof, in each and every respect following the consummation of
the transactions contemplated by the Second Amended and Restated Credit
Agreement, including the Equity Offering and its related transactions.


SECTION 3.           Amendment
of Definitions.  Each of the defined
terms “Collateral Agent,” “Lenders,” “Administrative Agent,” Letter of Credit
Issuer,” “Parent” and “Secured Parties” (and their respective plural or
singular forms, as applicable) defined in this Second Omnibus Acknowledgment is
hereby incorporated into each of the Support Agreement, Consent and Support
Consent as if defined as such therein. 
Any and all references to “Credit Agreement” in each of the Support
Agreement, Consent and Support Consent shall be deemed to be references to the
Second Amended and Restated Credit Agreement as defined herein.


SECTION 4.           Separate
Counterparts.  This Second Omnibus
Acknowledgment may be executed in separate counterparts, each of which when so
executed and delivered shall be an original but all of such counterparts shall
constitute one and the same instrument.


SECTION 5.           Severability. 
Any provision of this Second Omnibus Acknowledgment that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


SECTION 6.           Successors
and Assigns.  This Second Omnibus
Acknowledgment shall be binding upon and inure to the benefit of Hess, Charter
LLC, the Collateral Agent, the Administrative Agent, the other Secured Parties
and their respective successors and assigns including all purchasers of a
Vessel (as defined in the Support Agreement) and all owners of the equity
interests in Charter LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, and U.S. Shipping Operating
LLC, in each case following the exercise of remedies by the Collateral Agent.


SECTION 7.           Governing Law.  THIS SECOND OMNIBUS ACKNOWLEDGMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD APPLY THE LAWS OF
ANOTHER JURISDICTION.


SECTION 8.           CONSENT TO JURISDICTION.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECOND OMNIBUS
ACKNOWLEDGMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY SUCH PARTY WITH RESPECT TO THIS SECOND
OMNIBUS
ACKNOWLEDGMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK.  EACH OF THE PARTIES HERETO HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS OF THE
STATE OF NEW YORK IN THE BOROUGH OF 


 


Exhibit
K-1 - 3





















 


MANHATTAN, CITY AND STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  EACH OF THE
PARTIES HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK.  EACH OF THE PARTIES
HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  TO THE EXTENT THAT ANY PARTY HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM
ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS SECOND OMNIBUS
ACKNOWLEDGMENT.


SECTION 9.           WAIVERS OF JURY TRIAL.  EACH
PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECOND OMNIBUS ACKNOWLEDGMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY SUCH PARTY WITH RESPECT TO THIS SECOND OMNIBUS ACKNOWLEDGMENT.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH SECURED PARTY ENTERING
INTO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND THE HEDGE AGREEMENTS AND
MAKING THE CREDIT EXTENSIONS.


 


Exhibit
K-1 - 4





















 


IN WITNESS WHEREOF, the parties hereto have executed this
Second Omnibus Acknowledgment as of the date first above written.


	
  AMERADA HESS
  CORPORATION

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  
	
   

  
	
   

  



 


 


S
- 1





















 


	
  KEYBANK
  NATIONAL ASSOCIATION,

  
	
  not in its individual
  capacity but solely as 

  
	
  Collateral Agent

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  	
  Preston Commons West
  Tower

  
	
   

  	
  8117 Preston Road, Ste.
  440

  
	
   

  	
  Dallas, Texas 75225

  
			



 


S
- 2





















 


	
  USS CHARTERING LLC

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  	
  c/o U.S. Shipping
  Partners L.P.

  
	
   

  	
  399 Thornall Street

  
	
   

  	
  Edison, NJ 08837

  
			



 


S
- 3





















	
  AGREED TO AND ACCEPTED
  BY:

  
	
   

  
	
  CANADIAN
  IMPERIAL BANK OF 

  
	
  COMMERCE,
  not in its
  individual capacity 

  
	
  but solely as Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			



 


S
- 4










 















EXHIBIT K-2


FORM OF
CONSENT AND AGREEMENT

(FOR FUTURE CHARTERS)


CONSENT AND AGREEMENT (this “Consent”), dated as of                 , 20  , by and among                      (“         ”), [USCS Chemical Chartering LLC](1),
a Delaware limited liability company (together with its successors and assigns,
“Chartering LLC”), and KeyBank National
Association as Collateral Agent (together with its successors in such capacity,
the “Collateral Agent”).                   is the charterer of one or more vessels (the “Vessels”), each of which is owned by a
subsidiary of U.S. Shipping Partners L.P. (the “Vessel
Owner”), under a [time charter] [contract of affreightment] dated                 , 20   entered into with Chartering LLC (as amended,
supplemented, restated or otherwise modified and in effect, the “Charter”).  
                  acknowledges that the acquisition and
operation of the Vessels were financed or refinanced pursuant to a Second
Amended and Restated Credit Agreement, dated as of November 3, 2004 (as amended,
supplemented, renewed, refinanced, extended, increased, restated or otherwise
modified from time to time, the “Credit Agreement”), by and among
Chartering LLC, U.S. Shipping Partners L.P., U.S. Shipping Operating LLC and
the other subsidiaries of U.S. Shipping Operating LLC from time to time party
thereto, various financial institutions as lenders (collectively, together with
their respective successors and assigns the “Lenders”),
Canadian Imperial Bank of Commerce, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Administrative Agent”), and as issuer of the
letters of credit (in such capacity, together with its successors in such
capacity, the “Letter of Credit Issuer”)
and KeyBank National Association, as collateral agent (in such capacity
together with its successors in such capacity, the “Collateral
Agent”; and together with the Lenders, the Administrative Agent, the
Letter of Credit Issuer and the counterparties to certain hedge agreements
hereinafter collectively referred to as the “Secured
Parties”).










(1)           If a Loan Party
other than USCS Chemical Chartering LLC is party to the charter, use that Loan
Party’s name and make any required conforming changes throughout the Consent.


 


                       hereby acknowledges, agrees and consents to
(i) any charter pursuant to which each of the Vessels is bareboat chartered by
its respective Vessel Owner to Chartering LLC or any other subsidiary of U.S.
Shipping Partners L.P. engaged in chartering vessels, (ii) any subcharter by
Chartering LLC of the Charter to any other subsidiary of U.S. Shipping Partners
L.P. engaged in chartering and which has a bareboat charter arrangement with
the Vessel Owner of the Vessel that is to perform under the Charter, (iii) the
assignment of any, or all, or the rights and obligations of Chartering LLC
under the Charter to any other wholly-owned subsidiary of U.S. Shipping
Partners L.P. engaged in chartering vessels, (iv) the execution and delivery of
a first preferred mortgage on each of the Vessels by the respective Vessel
Owner to the Collateral Agent for the Secured Parties, and (v) the grant of a
security interest in the Charter and the assignment for collateral purposes of
the Charter to the Collateral Agent for the benefit of the Secured Parties and
the grant of a security interest in the equity interests of each Vessel Owner
and Chartering LLC for the benefit of the Secured Parties.                hereby consents to and acknowledges and agrees
that none of the matters consented to above, nor the foreclosure or exercise of
other creditor rights by the Collateral Agent or any of its nominees or any of
the Secured Parties of the rights and remedies accorded to them pursuant to the
documents granting the liens described above or otherwise under applicable law,
including without limitation the sale and the taking of ownership and control
of the Vessels, or the enforcement of the Charter, by the Collateral Agent, any
Secured Party or any new owner upon foreclosure or any exercise of secured
creditor remedies, shall constitute, in and of itself, a default or breach
under the Charter and such persons shall be entitled to perform the Charter and
enforce               ’s obligations
thereunder to the same extent as Chartering LLC and                  shall not terminate the Charter solely by
reason of such change in ownership or control. 
           acknowledges and agrees that the Collateral
Agent, on behalf of the Secured Parties, and each of the other Secured Parties
shall have the right (but not the obligation) to cure defaults by Chartering
LLC under the Charter, without assuming or being responsible for 


 


 


Exhibit
K-2 -1





















 


any of the
obligations of Chartering LLC thereunder. 
                  agrees to (A) accept performance under the
Charter by the Collateral Agent, any Secured Party, or any of their respective
nominees or transferees reasonably acceptable to             as designated as such in writing by the Collateral
Agent (each a “Transferee”) following the exercise of secured creditors
rights, (B) comply with any and all written instructions received from the
Collateral Agent or a Transferee to the extent such compliance would be
required pursuant to the Charter if such instruction were given by Chartering
LLC; (C) treat such instructions as coming directly from Chartering LLC; and
(D) with effect as of the date of receipt of such instructions, direct to the
Collateral Agent or, if the Collateral Agent has assigned the Charter to one or
more Transferees, to such Transferee(s), all communications and correspondence
arising out of or in connection with the Charter.


               hereby agrees that all maritime liens against
each of the Vessels, including those arising under operation of law, created or
purported to be created by          ,
notwithstanding the terms, dating, execution or delivery of any document,
instrument, or agreement; the time, order, method, or manner of granting, or
perfection of any such lien; the time of filing or recording of any mortgages,
or any other documents, instruments, or agreements under any applicable law;
and any provision of any applicable law to the contrary, shall be subordinated
in priority to the first preferred mortgage in and lien upon the each of the
Vessels, including all equipment and inventory appurtenant thereto.


               hereby agrees to make payments to such account
as Chartering LLC shall designate until it has been instructed otherwise by
written notice from the Collateral Agent. 
Thereafter it shall make payments to such accounts as the Collateral
Agent shall designate by written notice to                .  Chartering LLC hereby irrevocably and
unconditionally agrees that any payment made pursuant to any instruction given
unilaterally by the Collateral Agent shall constitute payment to Chartering
LLC.


                 agrees that it shall not exercise any remedy
or claim any damages as the result of any breach or default of Chartering LLC
under the Charter or otherwise without prior notice in writing to the
Collateral Agent specifying the basis therefor (hereinafter called a “Notice”)
and a reasonable opportunity to cure following receipt of a Notice by the
Collateral Agent.  If a trustee or person
exercising the powers of a trustee in any bankruptcy, insolvency or other
similar proceeding applicable to Chartering LLC rejects the Charter,                    shall, if so requested by the Collateral
Agent, execute and deliver to the Collateral Agent or any Transferee (herein
called the “Replacement Entity”), a new contract with the Replacement
Entity, provided that                   shall be required to execute a new contract
with the Replacement Entity only if the Charter has been terminated pursuant to
such rejection, the Replacement Entity undertakes to pay all amounts then
payable to                   under the Charter and any nonmonetary defaults
of Chartering LLC under the Charter prior to its termination shall have been
cured (or, if such defaults are not susceptible of cure within such time, the
Replacement Entity undertakes to pursue diligent efforts to cure) and such
Replacement Entity is reasonably satisfactory to                  .  The new contract shall contain substantially
the same terms, provisions and limitations as the Charter for the balance of
the unexpired term thereof.  This Consent
shall apply with equal effect to such new contract.


                     shall not, without the prior written consent
of the Collateral Agent, assign any of its rights or obligations under the
Charter unless it remains bound by the terms of the Charter as a primary
obligor thereunder notwithstanding such assignment.                        represents and warrants that (i) neither                     nor, to its knowledge, any other person or
entity, is in default under the Charter and no event or condition has occurred
or exists which with the lapse of time or the giving of notice or both would
constitute a default or breach by it or, to its knowledge, Chartering LLC, or any
other person or entity of any of their respective obligations under the Charter
or give rise to a right to terminate the Charter, and (ii) the Charter
constitutes its valid and binding agreement, enforceable against it in
accordance with its terms (except as the enforceability thereof may be limited
by any applicable bankruptcy, insolvency or other laws affecting creditors’
rights generally or by general principles of equity, regardless of whether such
enforceability is considered in equity or at law).                   acknowledges that it has no existing claims,
existing counterclaims, existing offsets or existing defenses against
Chartering LLC in 


 


Exhibit
K-2 -2





















 


respect of the
Charter and that the Charter has not been amended, modified or supplemented in
any manner except as noted herein.


All notices or
other communications required or permitted to be given hereunder shall be in
writing to the address set forth below or such other address as the parties
designate and shall be delivered in person, sent by overnight delivery service,
or if overnight delivery services are not readily available, mailed by first
class mail, postage prepaid, registered or certified with return receipt
requested or sent by telecopy with confirmation received.


This Consent may
be executed in separate counterparts, each of which when so executed and
delivered shall be an original but all of such counterparts shall constitute
one and the same instrument.  Neither
this Consent nor any of the terms hereof may be terminated or modified except
by an instrument in writing signed by                   , and the Collateral
Agent.  Any provision of this Consent
that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  This Consent shall be binding upon and inure
to the benefit of                 ,
Chartering LLC, the Collateral Agent, the Administrative Agent, the other
Secured Parties and their respective successors and assigns.


THIS CONSENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD APPLY THE LAWS OF
ANOTHER JURISDICTION.


 


Exhibit
K-2 -3





















IN WITNESS WHEREOF, the parties hereto have executed this
Consent as of the date first above written.


	
   

  	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  not in its individual
  capacity but solely as

  
	
   

  	
   

  	
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
  Title:

  	
   

  	
  Title:

  
	
  Address:

  	
   

  	
  Address:

  	
  Preston Commons West
  Tower

  
	
   

  	
   

  	
   

  	
  8117 Preston Road, Ste.
  440

  
	
   

  	
   

  	
   

  	
  Dallas, Texas 75225

  
						



 


 


Exhibit
K-2 -4





















 


	
   

  	
   

  	
  [USCS CHEMICAL CHARTERING
  LLC](2)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  	
  c/o U.S. Shipping
  Partners L.P.

  
	
   

  	
   

  	
   

  	
  399 Thornall Street

  
	
   

  	
   

  	
   

  	
  Edison, NJ 08837

  
						



 










(2)           If
a Loan Party other than USCS Chemical Chartering LLC is party to the charter,
use that Loan Party’s name.


 


 


Exhibit
K-2 -5










 













EXHIBIT K-3




FORM OF ACKNOWLEDGMENT OF CONSENT AND AGREEMENT


The undersigned has
previously executed and delivered that certain Consent and Agreement dated as
of April [12](1), 2004 (the “Consent”)
to the Collateral Agent (as defined in the Consent).  The undersigned has been advised that (a) the
Credit Agreement referred to in the Consent has been amended, restated, and
extended, and the loan commitments thereunder refinanced, pursuant to a Second
Amended and Restated Credit Agreement, dated as of November 3, 2004 (as
amended, supplemented, renewed, refinanced, extended, increased, restated or
otherwise modified from time to time hereafter, the “Second
Amended and Restated Credit Agreement”), by and among U.S. Shipping
Partners L.P. (the “Partnership”), U.S.
Shipping Operating LLC, ITB Baltimore LLC,
ITB Groton LLC,
ITB Jacksonville LLC,
ITB Mobile LLC,
ITB New York LLC,
ITB Philadelphia LLC,
USS Chartering LLC, USCS Chemical Chartering LLC, USCS Charleston Chartering
LLC, USCS Chemical Pioneer LLC, USCS Charleston LLC, and USCS ATB LLC (the “Borrowers”), the Lenders party thereto (the “Lenders”), Canadian Imperial Bank of
Commerce, as administrative agent for the Lenders and issuer of letters of
credit (the “Administrative Agent” and
“Letter of Credit Issuer”) and KeyBank
National Association as collateral agent (in such capacity together with its
successors, the “Collateral Agent”, and
together with the Lenders, the Administrative Agent, the Letter of Credit
Issuer and the counterparties to certain hedge agreements collectively, the “Secured Parties”), and (b) KeyBank National
Association has succeeded National City Bank as the Collateral Agent (as
defined in the Consent) pursuant to that certain Assignment of Liens and
Security Interests, dated November 3, 2004, by and between National City Bank,
as the former collateral agent, and KeyBank National Association, as Collateral
Agent.  Unless otherwise defined herein,
capitalized terms used herein have the same meanings as assigned to such terms
in the Second Amended and Restated Credit Agreement.










(1)           Use April 13, 2004 for Acknowledgment
executed by Shell Trading (US) Company and April 22, 2004 for Acknowledgment
executed by SeaRiver Maritime, Inc.


The undersigned hereby
agrees that any and all references to “Credit Agreement” in the Consent shall
be deemed to be references to the “Second Amended and Restated Credit
Agreement” as defined herein and each of the defined terms “Collateral Agent”,
“Lenders,” “Administrative Agent,” “Letter of Credit Issuer,” and “Secured
Parties” (and their respective plural or singular forms, as applicable) defined
herein is incorporated into the Consent as if defined as such therein.


[The undersigned hereby
further agrees that (a) any and all references to “Chemical Chartering” in the
Consent shall mean “USCS Chemical Chartering LLC, together with its successors
and assigns”, (b) any and all references to “S.S. Chemical Pioneer”, “Chemical 


 


 


Exhibit
K-3 - 1





















 


Pioneer” or “the Vessel”
in the Consent shall be deemed to be references to “the Vessels” which is
defined to mean “one or more vessels, each of which is owned by a subsidiary of
U.S. Shipping Partners L.P. (each, a “Vessel Owner”
and collectively, the “Vessel Owners”)”,
(c) any and all references to “USCS Chemical Pioneer LLC” or “Pioneer LLC”
shall be deemed to be references to “the Vessel Owners” (as defined in the
foregoing clause), (d) clause (i) of the second paragraph of the Consent is
deleted in its entirety and replaced with the following:  “(i) any charter pursuant to which each of
the Vessels is bareboat chartered by its respective Vessel Owner to Chartering
LLC or any other subsidiary of U.S. Shipping Partners L.P. engaged in chartering
vessels, (ii) any subcharter by Chartering LLC of the Charter to any other
subsidiary of U.S. Shipping Partners L.P. engaged in chartering and which has a
bareboat charter arrangement with the Vessel Owner of the Vessel that is to
perform under the Charter, (iii) the assignment of any, or all, or the rights
and obligations of Chartering LLC under the Charter to any other wholly-owned
subsidiary of U.S. Shipping Partners L.P. engaged in chartering vessels,” and
(e) clauses (ii) and (iii) of the second paragraph are renumbered (iv) and (v),
respectively.  The undersigned further
acknowledges that Chemical Chartering, a wholly-owned subsidiary of the
Partnership, has subchartered to USCS Charleston Chartering LLC, a wholly-owned
subsidiary of the Partnership, all obligations under the Charter that are to be
fulfilled using the M/V Charleston.](2)










(2)           Use for Acknowledgment executed by
The Dow Chemical Company.


[The undersigned hereby
further agrees that (a) any and all references to “Chemical Chartering” in the
Consent shall mean “USCS Chemical Chartering LLC, together with its successors
and assigns”, (b) any and all references to “M/V Charleston, the Chemical
Pioneer and the Mobile” or “the Vessels” in the Consent shall be deemed to be
references to “the Vessels” which is defined to mean “one or more vessels, each
of which is owned by a subsidiary of U.S. Shipping Partners L.P. (each, a “Vessel Owner” and collectively, the “Vessel Owners”)”, (c) any and all references
to “Charleston LLC, Pioneer LLC, and Mobile LLC” in the Consent shall be deemed
to be references to “the Vessel Owners” (as defined in the foregoing clause),
(d) clause (i) of the second paragraph of the Consent is deleted in its
entirety and replaced with the following: 
“(i) any charter pursuant to which each of the Vessels is bareboat
chartered by its respective Vessel Owner to Chartering LLC or any other
subsidiary of U.S. Shipping Partners L.P. engaged in chartering vessels, (ii)
any subcharter by Chartering LLC of the Charter to any other subsidiary of U.S.
Shipping Partners L.P. engaged in chartering and which has a bareboat charter
arrangement with the Vessel Owner of the Vessel that is to perform under the
Charter, (iii) the assignment of any, or all, or the rights and obligations of
Chartering LLC under the Charter to any other wholly-owned subsidiary of U.S.
Shipping Partners L.P. engaged in chartering vessels,” and (e) clauses (ii) and
(iii) of the second paragraph are renumbered (iv) and (v), respectively.  The undersigned further acknowledges that
Chemical Chartering, a wholly-owned subsidiary of the Partnership, has
subchartered to (a) USCS Charleston Chartering LLC, a wholly-owned subsidiary
of the Partnership, all obligations under the Charter that are to be fulfilled
using the M/V Charleston and (b) USS Chartering LLC, a wholly-owned subsidiary
of 


 


Exhibit
K-3 - 2





















 


the Partnership,
all obligations under the Charter that are to be fulfilled using one of the
Partnership’s integrated tug-barge (“ITB”) Vessels.](3)










(3)           Use for Acknowledgment executed by
Shell Trading (US) Company.


[The undersigned hereby
further agrees that (a) any and all references to “Chemical Chartering” in the
Consent shall mean “USCS Chemical Chartering LLC, together with its successors
and assigns”, (b) any and all references to “M/V Charleston and the Chemical
Pioneer” or “the Vessels” in the Consent shall be deemed to be references to
“the Vessels” (as defined herein), and (c) the first sentence of the second
paragraph is replaced in its entirety with the following:  “SeaRiver hereby acknowledges the execution
and delivery of a first preferred mortgage on each of the vessels (the “Vessels”), each of which is owned by a
subsidiary of U.S. Shipping Partners LP (the “Vessel
Owner”) and is chartered by SeaRiver pursuant to the Charter, by the
respective Vessel Owner to the Collateral Agent for the Secured Parties.”.  The undersigned further acknowledges that
Chemical Chartering, a wholly-owned subsidiary of the Partnership, has
subchartered to USCS Charleston Chartering LLC, a wholly-owned subsidiary of
the Partnership, all obligations under the Charter that are to be fulfilled
using the M/V Charleston.](4)










(4)           Use for Acknowledgment executed by
SeaRiver Maritime, Inc.


[The undersigned hereby
further agrees that (a) any and all references to “Chemical Chartering” in the
Consent shall mean “USCS Chemical Chartering LLC, together with its successors
and assigns”, (b) any and all references to “M/V Charleston, the Chemical
Pioneer, the Mobile and the Jacksonville” or “the Vessels” in the Consent shall
be deemed to be references to “the Vessels” which is defined to mean “one or
more vessels, each of which is owned by a subsidiary of U.S. Shipping Partners
L.P. (each, a “Vessel Owner” and
collectively, the “Vessel Owners”)”,
(c) any and all references to “Charleston LLC, Pioneer LLC, Mobile LLC and
Jacksonville LLC” in the Consent shall be deemed to be references to “the
Vessel Owners” (as defined in the foregoing clause), (d) clause (i) of the
second paragraph of the Consent is deleted in its entirety and replaced with
the following:  “(i) any charter pursuant
to which each of the Vessels is bareboat chartered by its respective Vessel
Owner to Chartering LLC or any other subsidiary of U.S. Shipping Partners L.P.
engaged in chartering vessels, (ii) any subcharter by Chartering LLC of the
Charter to any other subsidiary of U.S. Shipping Partners L.P. engaged in
chartering and which has a bareboat charter arrangement with the Vessel Owner
of the Vessel that is to perform under the Charter, (iii) the assignment of
any, or all, or the rights and obligations of Chartering LLC under the Charter
to any other wholly-owned subsidiary of U.S. Shipping Partners L.P. engaged in
chartering vessels,” and (e) clauses (ii) and (iii) of the second paragraph are
renumbered (iv) and (v), respectively. The undersigned further acknowledges
that Chemical Chartering, a wholly-owned subsidiary of the Partnership, has
subchartered to (a) USCS Charleston Chartering LLC, a wholly-owned subsidiary
of the Partnership, all obligations under the Charter that are to be fulfilled
using the M/V Charleston and (b) USS Chartering LLC, a wholly-owned subsidiary
of the Partnership, all obligations 


 


Exhibit
K-3 -3





















 


under the Charter
that are to be fulfilled using one of the Partnership’s integrated tug-barge
(“ITB”) Vessels.](5)










(5)           Use for Acknowledgment executed by
Koch Shipping, Inc.


The undersigned hereby
acknowledges, ratifies, approves, and confirms the Consent, as amended above,
in each and every respect.


This acknowledgement may
be executed in separate counterparts, each of which when so executed and
delivered shall be an original but all of such counterparts shall constitute
one and the same instrument.  Any
provision of this acknowledgement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  This acknowledgement
shall be binding upon and inure to the benefit of [Name of Charterer], USCS
Chemical Chartering LLC, the Collateral Agent, the Administrative Agent, the
other Secured Parties and their respective successors and assigns.


THIS
ACKNOWLEDGEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD
APPLY THE LAWS OF ANOTHER JURISDICTION.


 


 


 


Exhibit
K-3 -4





















 


IN
WITNESS WHEREOF, the parties hereto have executed this acknowledgement as of
November     , 2004.


	
  [NAME OF CHARTERER]

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  
	
   

  
	
   

  



 


	
  KEYBANK
  NATIONAL ASSOCIATION,

  
	
  not in its individual
  capacity but solely as 

  
	
  Collateral Agent

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			



 


	
  USCS CHEMICAL
  CHARTERING LLC

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			



 


Exhibit
K-3 - 5










 















EXHIBIT
L


FORM
OF AMENDED AND RESTATED 

CASH COLLATERAL CONTROL AGREEMENT


THIS
AMENDED AND RESTATED CASH COLLATERAL CONTROL AGREEMENT (this “Agreement”),
dated as of November 3, 2004 is entered into by and among U.S. SHIPPING PARTNERS
L.P., a Delaware limited partnership (the “MLP”), U.S. SHIPPING OPERATING LLC, ITB BALTIMORE LLC,
ITB GROTON LLC,
ITB JACKSONVILLE
LLC, ITB
MOBILE LLC, ITB NEW YORK LLC, ITB PHILADELPHIA LLC, USS CHARTERING LLC, USCS CHEMICAL CHARTERING
LLC, USCS
CHEMICAL PIONEER LLC, USCS CHARLESTON LLC, USCS CHARLESTON CHARTERING LLC,
and USCS ATB LLC,
each of the foregoing being a Delaware limited liability company (collectively
the “Borrowers” and individually a “Borrower”);
CANADIAN IMPERIAL BANK OF COMMERCE (“CIBC”),
acting in its capacity as administrative agent (together with its successors
and assigns in such capacity, the “Administrative
Agent”) under the Credit Agreement referenced below for the benefit
of the Secured Parties (as defined in the Credit Agreement), and KEYBANK NATIONAL ASSOCIATION,
acting in its capacity as collateral agent (in such capacity and together with
its successors and assigns in such capacities, the “Collateral
Agent”) and MCDONALD INVESTMENTS, INC., acting in its capacity as
Securities Intermediary (as hereinafter defined).


W I  T  N  E  S  S  E  T  H:


WHEREAS, United States Shipping Master LLC,
United States Shipping LLC, United States Chemical Shipping LLC, ITB Baltimore
LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC,
ITB Philadelphia LLC, USS Chartering LLC, USS Transport LLC, USCS Chemical
Chartering LLC, USCS Chemical Transport LLC, USCS Chemical Pioneer LLC, and
USCS Charleston LLC, each a Delaware limited liability company, and USS Vessel
Management Inc., a Delaware corporation (collectively, the “Original Borrowers”), have heretofore entered
into that certain Amended and Restated Credit Agreement, dated as of
April 13, 2004, as amended by that certain First Amendment to Amended and
Restated Credit Agreement, dated as of August 5, 2004 (as amended, the “Existing Credit Facility”), by and among the
Original Borrowers, the commercial lending financial institutions parties
thereto (collectively, the “Existing Lenders”),
CIBC, as letter of credit issuer, CIBC, as administrative agent, and National City Bank, as
collateral agent for the Secured Parties therein defined (the “Existing Collateral Agent”), pursuant to
which the Original Borrowers have obtained commitments from the Existing
Lenders pursuant to which loans were made from time to time;


WHEREAS, in connection with the Existing Credit
Facility, the Original Borrowers, the Administrative Agent, and the Existing
Collateral Agent have entered into that certain Cash Collateral Control
Agreement, dated as of September 13, 2002, as amended by that First Amendment
to Cash Collateral Control Agreement, dated as of April 13, 2004 (as amended,
the “Existing Control Agreement”);


 


 





















 


WHEREAS, the Existing Credit Facility is being
amended and restated contemporaneously herewith pursuant to a Second Amended
and Restated Credit Agreement, dated as of even date herewith (together with
all amendments, supplements, restatements and other modifications, if any from
time to time thereafter made thereto, the “Credit
Agreement”) by and among the Borrowers, the various commercial
lending institutions as are, or may from time to time become, parties thereto
(the “Lenders”), CIBC as the letter of
credit issuer, CIBC, as Administrative Agent, and the Collateral Agent;


WHEREAS, contemporaneously in connection with
the execution of the Credit Agreement, all rights, titles, interests and
obligations of the Existing Collateral Agent under the Existing Control
Agreement have been assigned by the Existing Collateral Agent to the Collateral
Agent pursuant to that certain Assignment of Liens and Security Interests dated
as of even date herewith;


WHEREAS, the Borrowers have entered into or may
from time to time enter into Hedge Agreements with certain Hedge Counterparties
as permitted under the terms of the Credit Agreement; and


WHEREAS, it is a condition precedent to the
obligations of the Lenders and the Letter of Credit Issuer under the Credit
Agreement, that the Borrowers, the Administrative Agent, the Collateral Agent
and the Securities Intermediary, enter into this Agreement; and


WHEREAS, the parties hereto intend that the
Existing Control Agreement be amended and restated, and superseded, by this
Agreement;


NOW, THEREFORE, in consideration of the foregoing
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:


Section 1.              Defined Terms; Construction.


(a)           As used herein, the
following terms shall have the following meanings:


“Accounts” shall mean the Securities Accounts.


“Book-Entry Security” shall mean a security
maintained in the form of entries (including, without limitation, the security
entitlements in, and the financial assets based on, such security) in the
commercial book-entry system of the Federal Reserve System.


“Casualty Event”
shall mean any single event of damage, destruction, condemnation, seizure or
appropriation of all or any portion of a Vessel.


“Condemnation Proceeds”
shall mean all monies (other than Insurance Proceeds) payable to a Borrower or
any other Loan Party as the result of the condemnation or taking or requisition
of title or use by any Governmental Authority of any Vessel.


“entitlement holder” shall mean a Person that
(a) is an “entitlement holder” as defined in Section 8-102(a)(7) of the U.C.C.
(except in respect of a Book-Entry Security); and (b) in respect


 


2





















 


of any Book-Entry
Security, is an “entitlement holder” as defined in 31 C.F.R. §357.2 (or, as
applicable to such Book-Entry Security, the corresponding Federal Book-Entry
Regulations governing such Book-Entry Security) which, to the extent required
or permitted by the Federal Book-Entry Security Regulations, is also an
“entitlement holder” as defined in Section 8-102(a)(7) of the U.C.C.


“entitlement order” shall have the meaning set
forth in Section 8-102(a)(8) of the U.C.C.


“Federal Book-Entry Regulations” shall mean
(a) the federal regulations contained in Subpart B (“Treasury/Reserve Automated
Debt Entry System (TRADES)” governing Book-Entry Securities consisting of U.S.
Treasury bonds, notes and bills) and Subpart D (“Additional Provisions”) of 31
C.F.R. Part 357, 31 C.F.R. §357.10 through §357.14 and §357.41 through §357.44
(including related defined terms in 31 C.F.R. §357.2); and (b) to the extent
substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to
time), the federal regulations governing other Book-Entry Securities.


“Hedging Agreement Pro
Rata Share” means with respect to any prepayment (whether voluntary or
involuntary and for purposes hereof including any requirement to cash
collateralize) of any Credit Extension to be made pursuant to Section 3.1(d),
(e), or (f) of the Credit Agreement on any date, a fraction (expressed as a
percentage) (x) the numerator of which is the Relevant Secured Hedge
Obligations with respect to such prepayment and (y) the denominator of which is
the sum of (i) the Relevant Secured Hedge Obligations with respect to such
prepayment plus (ii) the amount, if any, required to be prepaid pursuant to
Section 3.1(d), (e) or (f) of the Credit Agreement on such date.


“Insurance Proceeds”
shall mean all monies payable to a Borrower or any other Loan Party or the
Collateral Agent or Administrative Agent, as the result of a claim under any
insurance policy in respect of a Casualty Event.


“Loan Party” shall mean each Borrower and each
other Affiliate or Subsidiary of a Borrower that executes and delivers a
Security Agreement (as defined in the Credit Agreement) pursuant to Section
7.1.8 or Section 7.1.11 of the Credit Agreement.


“Loss Event” shall
mean any single Casualty Event such that thereafter and after giving effect to
the proposed or actual application, as the case may be, of any and all Loss
Proceeds in respect of such event to the repair or restoration of any Vessel in
accordance with Section 3(i), it is not possible to operate the Vessel
and its related tug or barge, as the case may be, on a commercially feasible
basis or in accordance with the covenants contained in the Credit Agreement, or
the covenants or warranties contained in any other relevant agreement
including, without limitation, any charter relating to such Vessel, and its
related tug or barge, as the case may be, and all applicable legal requirements.


“Loss Proceeds” shall mean Condemnation
Proceeds and Insurance Proceeds.


“Restricted Loss
Proceeds Account” shall mean that segregated cash collateral account
[account number], entitled “Restricted Loss Proceeds Account for the benefit of
KeyBank National Association, as Collateral Agent for the Secured Parties”,
established by the Collateral Agent at the Securities Intermediary.


 


3





















 


“Securities
Accounts” shall have the meaning ascribed thereto
in Section 3(a).


“Securities
Intermediary” shall mean McDonald Investments, Inc., together with its
successors and permitted assigns, acting in its capacity as (a) a “securities
intermediary” as defined in Section 8-102(a)(14) of the U.C.C. and (b) in
respect of any Book-Entry Security, a “securities intermediary” as defined in
31 C.F.R. §357.2 (or, as applicable to such Book-Entry Security, the
corresponding Federal Book-Entry Regulations governing such Book-Entry
Security).


“Security Agreement” shall mean each of the
Security Agreements entered into by each Loan Party and the Collateral Agent,
as such agreement may be amended, supplemented, restated or otherwise modified
from time to time.


“security entitlement” shall mean (a)
“security entitlement” as defined in Section 8-102(a)(17) of the U.C.C. (except
in respect of a Book-Entry Security); and (b) in respect of any Book-Entry
Security, a “security entitlement” as defined in 31 C.F.R. §357.2 (or, as
applicable to such Book-Entry Security, the corresponding Federal Book-Entry
Regulations governing such Book-Entry Security) which, to the extent required
or permitted by the Federal Book-Entry Regulations, is also a “security
entitlement” as defined in Section 8-102(a)(17) of the U.C.C.


“U.C.C.” shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.


(b)           In this Agreement,
unless otherwise indicated, the singular includes the plural and plural the
singular; words importing any gender include the other gender; references to statutes
or regulations are to be construed as including all statutory or regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; references to “writing” include printing, typing, lithography and
other means of reproducing words in a tangible visible form; the words
“including,” “includes” and “include” shall be deemed to be followed in each
instance by the words “without limitation”; references to articles, sections
(or subdivisions of sections), exhibits, annexes or schedules are to this
Agreement; references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments, extensions and other modifications
to such instruments (without, however, limiting any prohibition on any such
amendments, extensions and other modifications by the terms of this Agreement);
and references to Persons include their respective permitted successors and
assigns.


(c)           Terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.


Section 2.              Appointment  KeyBank National Association is hereby appointed as,
and KeyBank National Association hereby agrees to act as, Collateral Agent and
McDonald Investments, Inc. is hereby appointed as, and McDonald Investments,
Inc. hereby agrees to act as, the Securities Intermediary
for the Administrative Agent and the Secured Parties in respect of the Accounts
under this Agreement.  Each of the
Borrowers and the other Loan Parties hereby acknowledges that the Collateral
Agent and the Securities Intermediary shall act in such respective capacities
under this Agreement.  Neither the
Collateral Agent nor the Securities Intermediary shall be responsible under,
nor be required to monitor compliance with or take




 


4





















 


notice of, any
other agreement among any of the Administrative Agent, the Secured Parties and
the Loan Parties.  The Loan Parties shall
pay to the Collateral Agent and the Securities Intermediary fees in the amounts
and on the dates as agreed between the Collateral Agent and the Securities
Intermediary and the Loan Parties from time to time and the Loan Parties shall
reimburse the Collateral Agent and the Securities Intermediary for their
respective reasonable cost and expenses (including reasonable attorneys fees
and expenses of counsel).


Section 3.              Accounts. 
Each of the parties hereto hereby acknowledges, confirms and agrees
that:


(a)           The Collateral Agent
has established the Restricted Loss Proceeds Account (the “Securities
Accounts”) with the Securities Intermediary to be held together with any
sub-account thereof as a “securities account” as such term is defined in
Section 8-501(a) of the UCC) and to be maintained at all times in accordance
with this Agreement until the termination of this Agreement.  Certain sub-accounts within certain of the
Securities Accounts may be established and maintained from time to time in
accordance with this Agreement.


(b)           The Securities
Accounts shall be in the name of the Collateral Agent.  The Collateral Agent shall continue to
maintain, in each case as the Collateral Agent, on behalf of the Secured
Parties, the Securities Accounts, and the Collateral Agent shall not change the
name or account number of any such Account without the prior written consent of
the Administrative Agent.  Each party
acknowledges that the Loan Parties have granted to the Collateral Agent a Lien
on each Account pursuant to the Security Agreements.


(c)           All securities or
other property underlying any financial assets (as defined in Section 4
below) credited to any Account shall be registered in the name of the
Collateral Agent, endorsed to the Collateral Agent or in blank and in no case
will any financial asset credited to an Account be registered in the name of a
Borrower or any other Loan Party, payable to the order of a Borrower or any
other Loan Party or specially endorsed to a Borrower or any other Loan Party
except to the extent the foregoing have been specially endorsed to the
Collateral Agent or in blank.


(d)           All property
delivered to any Account pursuant to the Credit Agreement or to any Security
Agreement will be promptly credited to such Account.


(e)           (i) The
“securities intermediaries jurisdiction” (within the meaning of
Section 8-110(e)(1) of the U.C.C.) for this Agreement is and will continue
to be the State of New York, (ii) each Securities Account is and shall at all
times be maintained by the Securities Intermediary as a “securities account”
(as defined in Section 8-501 of the U.C.C.), (iii) the Collateral
Agent is the entitlement holder of the Securities Accounts, (iv) all
property delivered to the Collateral Agent pursuant to this Agreement for
deposit in or credit to any Account will be promptly credited to such Account,
(v) all “financial assets” (as defined in Section
4 below) in registered form or payable to or to the order of and
credited to or carried in any Securities Account shall be registered in the
name of, payable to or to the order of, or specially endorsed to, the
Collateral Agent or in blank, and in no case will any financial asset credited
to any Securities Account be registered in the name of, payable to or to the
order of, or specially endorsed to, any Borrower or any other Loan Party except
to the extent the foregoing have been specially indorsed to the


 


5





















 


Collateral Agent
or in blank, (vi) the Securities Intermediary shall comply with all
instructions and entitlement orders of, or originated by, the Collateral Agent
in connection with or directing the transfer, disposition or withdrawal of
amounts, funds and other financial assets in the Accounts and the liquidation
of financial assets carried therein or credited thereto, and with respect to
security entitlements carried in the Securities Accounts and with respect to
all other matters relating to the Accounts, in each case without the consent of
any Borrower or any other Loan Party or any other Person, and, except to the
limited extent provided in Section 5(b) below, shall not comply with
instructions or entitlement orders of any other Person, (vii) the Loan Parties
and the Securities Intermediary will execute such additional documents as shall
be reasonably requested by the Collateral Agent to enable the Collateral Agent
to obtain or maintain a first priority perfected security interest in favor of
the Collateral Agent for its benefit and as Collateral Agent for and on behalf
of the Secured Parties in all of the Accounts and all financial assets and
securities entitlements and funds deposited or carried therein or credited
thereto, (viii) the Securities Intermediary shall, by book entry or otherwise,
identify the Accounts, all security entitlements, financial assets and funds
carried therein, and all other collateral credited or registered to or held in
or for such Accounts, as being subject to a security interest in favor of the
Collateral Agent as Collateral Agent for and on behalf of the Secured Parties,
(ix) the Securities Intermediary shall treat the Collateral Agent as the sole
Person having “control” within the meaning of the U.C.C. (including without
limitation, Sections 8-106, 9-104 and 9-106 thereof) over the Accounts and
the security entitlements carried or maintained therein or credited thereto,
and (x) the Securities Intermediary is, and the Securities Intermediary hereby
represents that it is a “securities intermediary” as defined in Section
8-102(a)(14) of the U.C.C. and, in respect of any Book-Entry Security, a
“securities intermediary” as defined in 31 C.F.R. §357.2 (or, as applicable to
such Book-Entry Security, the corresponding Federal Book-Entry Regulations
governing such Book-Entry Security) and will at all times act as such with
respect to the Securities Accounts.


(f)            For purposes of any
income tax payable on account of any income or gain on any balance carried in
or credited to any Account, such income or gain shall be for the account of the
MLP, whose taxpayer identification number is 20-1447743.


(g)           [Intentionally
omitted.]


(h)           All Loss Proceeds
shall be paid directly into the Restricted Loss Proceeds Account; provided
that any insurance proceeds related to any business interruption insurance
policies shall be paid directly into such account as the Loan Parties shall
from time to time designate and provided
that as long as no Event of Default of the type described in Section 8.1.1 or
8.1.9 of the Credit Agreement shall have occurred and be continuing, if such
Insurance Proceeds do not exceed One Million Dollars ($1,000,000) in the
aggregate, such Insurance Proceeds may be paid to the Mortgagor of the relevant
Vessel to repair and restore such Vessel; provided
such Mortgagor pays the amount of the deductible.  If any Loss Proceeds (other than Insurance
Proceeds described in the immediately preceding proviso which are used to
repair or restore the relevant Vessel) are received by or on behalf of a
Borrower or any other Loan Party, such Loss Proceeds shall be received in trust
for the Collateral Agent, segregated from the other funds of the Loan Parties
and immediately paid to the Collateral Agent for deposit into the Restricted
Loss Proceeds Account.  Amounts held in
the Restricted Loss Proceeds Account shall


 


6





















 


be applied solely
for the payment of the costs of rebuilding, repair or restoration of the
Vessels or as otherwise set forth below.


(i)            If
a Loss Event shall have occurred with respect to any Vessel, the Collateral
Agent shall, promptly after receipt of Loss Proceeds relating to such Loss
Event, instruct the Securities Intermediary in writing to withdraw and transfer
to the Administrative Agent all amounts on deposit in the Restricted Loss
Proceeds Account relating to such Loss Event and (1) the Credit Facility
Pro Rata Share of such proceeds shall be applied to the payment of the then
outstanding Credit Extensions and to the cash collateralization of any
outstanding Letters of Credit all in accordance with Section 3.1 of the Credit
Agreement and the Hedging Agreement Pro Rata Share of such proceeds shall be
applied to the payment of the Relevant Secured Hedge Obligations until such
amounts are paid in full and (2) following the payment and cash
collateralization in full of the Credit Extensions pursuant to Section 3.1 of
the Credit Agreement and payment of the Relevant Secured Hedge Obligations any
remaining Loss Proceeds relating to such Loss Event shall be applied to the
payment of Obligations consisting of amounts due under the Hedge Agreements
with Secured Hedge Counterparties whether as scheduled payments or as early termination
payments until such amounts are paid in full, and (3) finally any remaining
Loss Proceeds relating to such Loss Event shall be applied to the payment of
any other outstanding Obligations.


(ii)           If
(x) a Casualty Event (not constituting a Loss Event) with respect to any Vessel
shall have occurred requiring the payment of Loss Proceeds not in excess of
twenty-five percent (25%) of the amount of insurance required to be maintained
on such Vessel as of such date as described in Section 11(a) of Article I of
the Mortgage with respect to such Vessel (such amount with respect to any
Vessel as of any date being referred to as such Vessel’s “Insured Value”),
(y) if no Event of Default of the type described in Section 8.1.1 or 8.1.9 of
the Credit Agreement has occurred and is continuing, and (z) the relevant
Mortgagor has paid the relevant deductible, the Collateral Agent shall instruct
the Securities Intermediary in writing to withdraw and pay to the relevant
Mortgagor such Loss Proceeds to the extent then on deposit in the Loss Proceeds
Account relating to such Casualty Event to be used to repair or restore the
relevant Vessel; provided that to the
extent the relevant Mortgagor does not utilize such Loss Proceeds to repair or
restore the relevant Vessel or if such repair will not be completed within 120
days (or such later date as is specified in the last two paragraphs of this clause (h)), then
(1) the Credit Facility Pro Rata Share of such proceeds shall be applied
to the payment of the then outstanding Credit Extensions and to the cash
collateralization of any outstanding Letters of Credit all in accordance with
Section 3.1 of the Credit Agreement and the Hedging Agreement Pro Rata Share of
such proceeds shall be applied to the payment of the Relevant Secured Hedge
Obligations until such amounts are paid in full and (2) following the
payment and cash collateralization in full of the Credit Extensions pursuant to
Section 3.1 of the Credit Agreement and payment of the Relevant Secured Hedge
Obligations any remaining Loss Proceeds relating to such Loss Event shall be
applied to the payment of Obligations consisting of amounts due under the Hedge
Agreements with Secured Hedge Counterparties whether as scheduled payments or
as early termination payments until such amounts are paid in full, and
(3) finally any


 


7





















 


remaining Loss Proceeds relating to such Loss Event shall be applied to
the payment of any other outstanding Obligations.


(iii)          If
(w) a Casualty Event (not constituting a Loss Event) with respect to any Vessel
shall have occurred requiring the payment of Loss Proceeds in excess of
twenty-five percent (25%) but not in excess of ninety percent (90%) of the
Insured Value of such Vessel, (x) no Event of Default of the type described in
Section 8.1.1 or 8.1.9 of the Credit Agreement has occurred and is continuing,
(y) the Mortgagor has provided the Administrative Agent a description in
reasonable detail of the repair or restoration, the number of days such repair or
restoration is projected to require, the estimated cost of such repair or
restoration, where such repair or restoration will be made, and such other
information as the Administrative Agent shall require, and (z) the relevant
Mortgagor has paid the relevant deductible, the Collateral Agent shall instruct
the Securities Intermediary in writing to withdraw and pay to the relevant
Mortgagor such Loss Proceeds in installments sufficient to pay for repair or
restoration of the relevant Vessel as it progresses upon confirmation that such
funds will be used for expenditures directly relating to the repair or
restoration of the relevant Vessel and subject to compliance by the relevant
Mortgagor with the provisions of Section 3(i); provided that to the extent the relevant
Mortgagor does not utilize such Loss Proceeds to repair or restore the relevant
Vessel or if such repair or restoration will not be completed within 120 days
(or such later date as is specified in the last two paragraphs of this clause (h)), then (1) the
Credit Facility Pro Rata Share of such proceeds shall be applied to the payment
of the then outstanding Credit Extensions and to the cash collateralization of
any outstanding Letters of Credit all in accordance with Section 3.1 of the
Credit Agreement and the Hedging Agreement Pro Rata Share of such proceeds
shall be applied to the payment of the Relevant Secured Hedge Obligations until
such amounts are paid in full and (2) following the payment and cash
collateralization in full of the Credit Extensions pursuant to Section 3.1 of
the Credit Agreement and payment of the Relevant Secured Hedge Obligations any
remaining Loss Proceeds relating to such Loss Event shall be applied to the
payment of Obligations consisting of amounts due under the Hedge Agreements
with Secured Hedge Counterparties whether as scheduled payments or as early
termination payments until such amounts are paid in full, and (3) finally
any remaining Loss Proceeds relating to such Loss Event shall be applied to the
payment of any other outstanding Obligations.


(iv)          If
a Casualty Event with respect to any Vessel shall have occurred requiring the
payment of Loss Proceeds in excess of ninety percent (90%) of the Insured Value
of such Vessel but not constituting a Loss Event, then at the election of the
Majority Lenders acting in their sole discretion either (A) (1) the
Credit Facility Pro Rata Share of such proceeds shall be applied to the payment
of the then outstanding Credit Extensions and to the cash collateralization of
any outstanding Letters of Credit all in accordance with Section 3.1 of the
Credit Agreement and the Hedging Agreement Pro Rata Share of such proceeds
shall be applied to the payment of the Relevant Secured Hedge Obligations until
such amounts are paid in full and (2) following the payment and cash
collateralization in full of the Credit Extensions pursuant to Section 3.1 of
the Credit Agreement and payment of the Relevant Secured Hedge Obligations any
remaining Loss Proceeds relating to such Loss Event shall be applied to the
payment of Obligations consisting of amounts due under any Hedge Agreements
with Secured Hedge


 


8





















 


Counterparties whether as scheduled payments or as early termination
payments until such amounts are paid in full, and (3) finally any
remaining Loss Proceeds relating to such Loss Event shall be applied to the
payment of any other outstanding Obligations, in which case the Collateral
Agent shall instruct the Securities Intermediary to withdraw such Loss Proceeds
and distribute them to the Administrative Agent for further application to the
Obligations, or (B) such proceeds shall be used to repair or restore the
Vessel in which case the Collateral Agent shall instruct the Securities
Intermediary in writing to withdraw and pay to the relevant Mortgagor on each
Monthly Payment Date such Loss Proceeds in installments sufficient to pay for
such repair or restoration as it progresses upon confirmation that such funds
will be used for expenditures directly relating to the repair or restoration of
the relevant Vessel and subject to compliance by the relevant Mortgagor with
the provisions of Section 3(i); provided
that to the extent the relevant Mortgagor does not utilize such Loss Proceeds
to repair or restore the relevant Vessel or if such repair or restoration will
not be completed within 120 days (or such later date as is specified in the
last two paragraphs of this clause (h)),
then (1) the Credit Facility Pro Rata Share of such proceeds shall be applied
to the payment of the then outstanding Credit Extensions and to the cash
collateralization of any outstanding Letters of Credit all in accordance with
Section 3.1 of the Credit Agreement and the hedging Agreement Pro Rata Share of
such proceeds shall be applied to the payment of the Relevant Secured Hedge
Obligations until such amounts are paid in full and (2) following the payment
and cash collateralization in full of the Credit Extensions pursuant to Section
3.1 of the Credit Agreement and payment of the Relevant Secured Hedge
Obligations any remaining Loss Proceeds relating to such Loss Event shall be
applied to the payment of Obligations consisting of amounts due under the Hedge
Agreements with Secured Hedge Counterparties whether as scheduled payments or
as early termination payments until such amounts are paid in full, and
(3) finally any remaining Loss Proceeds relating to such Loss Event shall
be applied to the payment of any other outstanding Obligations.


(v)           The
Credit Facility Pro Rata Share of Condemnation Proceeds shall be applied to the
payment of the then outstanding Credit Extensions and to the cash
collateralization of any outstanding Letters of Credit in accordance with
Section 3.1 of the Credit Agreement and the Hedging Agreement Pro Rata Share of
Condemnation Proceeds shall be applied to the payment of the Relevant Secured
Hedge Obligations and following the payment and cash collateralization in full
of the Credit Extensions pursuant to Section 3.1 of the Credit Agreement and
payment of the Relevant Secured Hedge Obligations any remaining Condemnation
Proceeds shall be applied to the payment of Obligations consisting of amounts
due under the Hedge Agreements with Secured Hedge Counterparties whether as
scheduled payments or as early termination payments until such amounts are paid
in full, and finally any remaining Condemnation Proceeds shall be applied to
the payment of any other outstanding Obligations.


In the event that a
repair or restoration referred to in foregoing clause (ii), (iii) or (iv) is projected
to require more than 120 days to complete, the relevant Mortgagor may notify
the Administrative Agent and the Lenders of such fact within 10 Business Days,
such notification to include a description in reasonable detail of the repair
or restoration, the reason it is projected to require more than 120 days, the
number of days such repair or restoration is projected to require, the
estimated cost of such repair or restoration, where


 


9





















 


such repair or restoration
will be made and such other information as the Administrative Agent shall
request.  Unless the Administrative Agent
or the Majority Lenders shall have notified the relevant Mortgagor in writing
within 10 Business Days of the receipt of such notification from such Mortgagor
that such Mortgagor is required to make the payment referred to in the
foregoing clause (ii), (iii) or (iv), as the case may be, such Mortgagor shall
have such number of days set forth in such Mortgagor’s notice to the Lenders
(not to exceed an additional 180 days), rather than such 120 days, to make such
repair or restoration.  If as a result of
the notification referred to in the preceding sentence, the relevant Mortgagor
is required to make the payment, it shall not be required to undertake the
repair or restoration referred to in the foregoing clause (ii), (iii) or (iv),
as the case may be.


In the event that the
relevant Mortgagor has offhire or business interruption insurance which pays to
such Mortgagor daily amounts at least equal to the amount of charter hire such
Mortgagor would have received had the repair or restoration referred to in the
foregoing clause (ii), (iii) and (iv), as the case may be, been completed
within 120 days, then such 120 days shall be increased to such number of days
(not to exceed an additional 180 days) for which such Mortgagor timely receives
such offhire or business interruption insurance payments.


(i)            Application of
Funds to Restoration.  Amounts on
deposit in the Restricted Loss Proceeds Account shall be used for repair and
restoration to the extent provided in Section 3(h) above on the
following terms and conditions:


(i)            The Collateral
Agent, prior to the initial release of such amounts, receives a copy of the
work orders approved by Authorized Officers of the relevant Mortgagor together
with a certificate of the relevant Mortgagor certifying that no Loss Event has
occurred with respect to the relevant Vessel and that the Loss Proceeds will be
used to repair and restore the Vessel within 120 days or such greater number of
days as permitted pursuant to the penultimate or last paragraph, as the case
may be, of the foregoing Section 3(h); and


(ii)           For the initial
release and each subsequent release of such amounts the Collateral Agent
receives an executed restoration requisition in form and substance satisfactory
to the Administrative Agent acting reasonably and a certificate of an
Authorized Officer of the relevant Mortgagor in the form of Exhibit A hereto.


Section 4.              “Financial
Assets” Election.  The Collateral Agent and the Securities
Intermediary each hereby agrees that each item of property (whether investment
property, financial asset, security, instrument or cash) credited to any
Securities Account shall be treated as a “financial asset” within the meaning
of Section 8-102(a)(9) of the U.C.C.


Section 5.              Entitlement
Orders and Other Distributions; Investments.


(a)           Subject
to Section 5(b), the Borrowers and each other Loan Party agree
that the Securities Intermediary may, and the Securities Intermediary agrees
that it shall, if and as directed in writing by the Collateral Agent (or by
facsimile or telephone, promptly confirmed in


 


 


10





















 


writing), and
without further consent by the Borrowers or any other Loan Party or any other
Person, (i) comply with entitlement orders originated by the Collateral Agent
and relating to any Securities Accounts and the assets and security
entitlements carried therein or credited thereto (including, without
limitation, any direction relating to the disbursement of funds from any
Securities Account to any third party), (ii) sell all or any designated part of
any investments or other financial assets or security entitlements held or
carried in the Securities Accounts, (iii) transfer all or any designated part
of any investments or other financial assets or security entitlements held or
carried in the Securities Accounts, including any cash, to any other accounts
established in the Collateral Agent’s name, (iv) transfer title to all or any
designated part of any investments or financial asset held or carried in the
Securities Accounts to the name of the Collateral Agent or any of its nominees
or Collateral Agents, without reference to any interest of the Loan Parties,
and (v) otherwise deal with the investments or financial assets or security
entitlements held or carried in the Securities Accounts as directed by the
Collateral Agent.  If at any time the
Securities Intermediary shall receive any order from the Collateral Agent directing
transfer or redemption of any financial asset relating to any Securities
Account (including, without limitation, any order relating to the disbursement
of funds from any Securities Account to any third-party), the Securities
Intermediary shall forthwith comply with such entitlement order without further
consent by the Borrowers or any other Loan Party or any other Person.  The Collateral Agent agrees not to make any
transfer pursuant to clause (iii) above
prior to the occurrence of an Event of Default unless such transfers are made
to its name, as Collateral Agent and subject to the terms of this Agreement.


(b)           Unless and until the
Administrative Agent instructs the Collateral Agent in writing that an Event of
Default has occurred and is continuing and that the Collateral Agent shall not
honor any instructions from the Borrowers or any other Loan Party under this Section
5(b), the Collateral Agent shall invest and reinvest any balances in the
Securities Account from time to time in Cash Equivalent Investments as
instructed by MLP, on behalf of the Loan Parties, in writing or by telephone or
facsimile, promptly confirmed in writing. 
The Collateral Agent may, in the absence of such direction, invest funds
on deposit in the Securities Accounts in Cash Equivalent Investments with a
maturity not later than the Business Day next following the date of such
investment.  In no event shall the
Collateral Agent or the Administrative Agent or any other Secured Party be
liable for the selection of Cash Equivalent Investments or for investment
losses incurred thereon.  The Collateral
Agent, the Securities Intermediary and the Administrative Agent shall have no
liability in respect of losses incurred as a result of the liquidation of any
Cash Equivalent Investment prior to its stated maturity or failure to provide
timely written direction.  The Loan
Parties shall have no right to instruct the Collateral Agent or the Securities
Intermediary with respect to the making of investments in the Securities
Accounts after the occurrence and during the continuance of a Default or an
Event of Default.  The Loan Parties shall
have no other right to instruct the Collateral Agent or the Securities
Intermediary to transfer or withdraw any balances in any Securities
Account.  The Collateral Agent shall not
be deemed to have knowledge that an Event of Default has occurred and is
continuing until it has received written notice thereof from the Administrative
Agent.


Section 6.              Subordination
of Lien; Waiver of Set-Off.  In the event
that the Collateral Agent or the Securities Intermediary has or subsequently
obtains by agreement, by operation of law or otherwise a security interest in
any Account or any security entitlement credited thereto, the Collateral Agent
and the Securities Intermediary each hereby agrees that


 


11





















 


such security
interest shall be subordinate to the Lien granted by the Loan Parties in favor
of the Collateral Agent described in Section 3(b).  The financial assets and other items and
funds deposited to any Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any person other than the Secured
Parties (except that the Collateral Agent and the Securities Intermediary each
may set off all amounts due to the Collateral Agent in respect of customary
fees and expenses for the routine maintenance and operation of an Account).


Section 7.              GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN SUCH STATE (WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPALS
WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).  FOR PURPOSES OF THE U.C.C., NEW YORK SHALL BE
DEEMED TO BE THE COLLATERAL AGENT’S AND THE SECURITIES INTERMEDIARY’S
JURISDICTION AND EACH ACCOUNT (AS WELL AS THE SECURITIES ENTITLEMENTS RELATED
THERETO) SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.


Section 8.              Conflict with Other Agreements.


(a)           With the exception
of the Credit Agreement whose terms and conditions shall be superior to any
other Loan Document (as defined in the Credit Agreement), in the event of any
conflict between this Agreement (or any portion thereof) and any other
agreement now existing or hereafter entered into, the terms of this Agreement
shall prevail.


(b)           The Collateral Agent
and the Securities Intermediary hereby each individually represents, warrants
and agrees that:


(i)            There
are no other agreements entered into between the Collateral Agent or the
Securities Intermediary and the Borrowers or any other Loan Party with respect
to any Account; and


(ii)           It
has not entered into, and until the termination of this Agreement will not
enter into, any agreement with any other person relating to the Securities
Accounts and/or any financial assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of
the U.C.C.) or instructions of such other person.


Section 9.              Adverse
Claims. 
Except for the claims and interest of the Secured Parties, and the Loan
Parties in the Accounts, neither the Collateral Agent nor the Securities
Intermediary knows of any claim to, or interest in, the Accounts or in any
“financial asset” (as defined in Section 8-102(a)(9) of the U.C.C.) credited
thereto, other than any claim or interest that exists in favor of the
Collateral Agent or the Securities Intermediary by operation of law.  If any person asserts any lien, encumbrance
or adverse claim (including any writ, garnishment, judgment, warrant of
attachment, execution or similar process) against any Account or in any


 


12





















 


financial asset
carried therein, the Collateral Agent will promptly notify the Administrative
Agent, and the Loan Parties thereof.


Section 10.            Maintenance
of Accounts.  In addition to, and not in lieu of, the
obligation of the Securities Intermediary to honor entitlement orders as agreed
in Section 5(a) hereof, the Collateral
Agent and the Securities Intermediary each agree to maintain the Accounts as
follows:


(a)           Sole Control. 
The Securities Intermediary agrees that the Collateral Agent has
exclusive “control” over the Accounts for purposes of the U.C.C. (including
without limitation, Sections 8-106, 9-104 and 9-106 thereof).  The Securities Intermediary agrees that it
will take all instruction with respect to the Accounts solely from the Collateral
Agent after the occurrence and during the continuance of an Event of Default; provided that the Securities Intermediary may
take instructions from the Loan Parties to the extent permitted by, but subject
to the limitations set forth in, Section 5(b)
hereof.  Notwithstanding anything herein
to the contrary, the Securities Intermediary agrees that it will comply with
the instructions and entitlement orders originated by the Collateral Agent with
respect to all Accounts without further consent by any Borrower or any other
Loan Party or any other Person.


(b)           Books of Account; Statements.


(i)            The
Collateral Agent shall maintain books of account for the Loan Parties on a cash
basis and record therein all deposits into and transfers to and from each of
the Accounts and all investment transactions effected therein pursuant to this
Agreement.  The Collateral Agent shall
make such books of account available during normal business hours with
reasonable advance notice for inspection and audit by the Borrowers and their
respective representatives in a manner consistent with its normal business
practices for similar types of accounts.


(ii)           If
the balance in any Account is an amount other than $0, then not later than the
fifteenth Business Day of each month, the Collateral Agent shall deliver to the
Loan Parties and the Administrative Agent a statement setting forth the
transactions in each Account during the preceding month and specifying the
funds and Cash Equivalent Investments credited to the Securities Accounts at
the close of business on the last Business Day of the preceding month in a
manner consistent with its normal business practices for similar types of
accounts.


Section 11.            Representations,
Warranties and Covenants.  The Collateral
Agent and the Securities Intermediary each hereby individually makes the
following representations, warranties and covenants:


(a)           Accounts. 
The Accounts have been established as set forth in Section 2 above and the Accounts will be
maintained in the manner set forth herein until termination of this Agreement.


(b)           Validity. 
This Agreement constitutes the Collateral Agent’s valid and legally
binding obligation.


 


 


13





















 


Section 12.            General
Protections of the Collateral Agent and the Securities Intermediary. 
To the extent permitted by applicable law:


(a)           The Collateral Agent
undertakes to perform such duties and only such duties as collateral agent as
are specifically set forth in this Agreement and the Securities Intermediary
undertakes to perform such duties and only such duties as are required to be
taken by a “securities intermediary” under Article 8 of the U.C.C. and, with
respect to any Book-Entry Securities, the corresponding Federal Book-Entry
Regulations.  The Securities Intermediary
shall not have any duties or responsibilities except those expressly set forth
in this Agreement or be a trustee to any party hereto.


(b)           In the absence of
bad faith on the part of the Collateral Agent or the Securities Intermediary,
the Collateral Agent and the Securities Intermediary each may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Collateral Agent or the Securities Intermediary, as the case may be, which
conform to the requirements of this Agreement.


(c)           Neither the
Collateral Agent nor the Securities Intermediary shall be liable for any error
of judgment made in good faith by an officer or officers of the Collateral
Agent or the Securities Intermediary, as the case may be, unless it shall be
conclusively determined by a court of competent jurisdiction that the
Collateral Agent or the Securities Intermediary, as the case may be, was
grossly negligent in ascertaining the pertinent facts.


(d)           Neither the
Collateral Agent nor the Securities Intermediary shall be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with any direction of the Administrative Agent and, to the extent provided in Section 5(b), the Loan Parties given under this
Agreement.


(e)           None of the
provisions of this Agreement shall require the Collateral Agent or the
Securities Intermediary to expend or risk its own funds or otherwise to incur
any liability, financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.


(f)            The Collateral
Agent and the Securities Intermediary each may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties.


(g)           The Collateral Agent
and the Securities Intermediary each may consult with counsel and the advice or
any opinion of counsel shall be full and complete authorization and protection
in respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or opinion of counsel.


(h)           Neither the
Collateral Agent nor the Securities Intermediary shall be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,


 


14





















 


instrument,
opinion, report, notice, request, consent, entitlement order, approval or other
paper or document.


(i)            Any Person into
which the Collateral Agent or the Securities Intermediary may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent or
the Securities Intermediary shall be a party, or any corporation succeeding to
the business of the Collateral Agent or the Securities Intermediary shall be
the successor of the Collateral Agent or the Securities Intermediary, as the
case may be, hereunder without the execution or filing of any paper with any
party hereto or any further act on the part of any of the parties hereto except
where an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.


(j)            The Borrowers and
each of the other Loan Parties shall indemnify, defend and hold harmless the
Collateral Agent and the Securities Intermediary and their respective officers,
directors, employees, representatives and agents, from and against and
reimburse the Collateral Agent and the Securities Intermediary for any and all
claims, expenses, obligations, liabilities, losses, damages, injuries (to
person, property, or natural resources), penalties, stamp or other similar
taxes, actions, suits, judgments, reasonable costs and expenses (including
reasonable attorney’s and agents’ fees and expenses) of whatever kind or nature
regardless of their merit, demanded, asserted or claimed against the Collateral
Agent or the Securities Intermediary directly or indirectly relating to, or
arising from claims against the Collateral Agent or the Securities Intermediary
by reason of its participation in the transactions contemplated hereby,
including without limitation all reasonable costs required to be associated
with claims for damages to persons or property and reasonable attorneys’ and
consultants’ fees and expenses and court costs except to the extent caused by
the Collateral Agent’s or the Securities Intermediary’s gross negligence or
willful misconduct.  All obligations of
the Borrowers and the other Loan Parties under this Agreement, including those
set forth in this Section, shall be joint and several obligations of the Loan
Parties.  The provisions of this Section
shall survive the termination of this Agreement or the earlier resignation or
removal of the Collateral Agent or the Securities Intermediary, as the case may
be.


(k)           Resignation
or Removal of the Collateral Agent.  The Collateral Agent may resign or be removed
and replaced as the Collateral Agent as provided in Section 9.4 of the Credit
Agreement.  After any Collateral Agent’s
resignation or removal hereunder as the Collateral Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Collateral Agent.  Notwithstanding any right, power or remedy
granted to the Collateral Agent herein, or at law, in equity, admiralty or
otherwise, the Collateral Agent will not take any action that causes a
violation of Section 2 or Section 9 of the Shipping Act of 1916, as amended
(the “Shipping Act”).  The Collateral
Agent represents and warrants unto each Secured Party that as of the date
hereof it is a United States Citizen within the meaning of Section 2 of the
Shipping Act.  The Collateral Agent
agrees that if to the actual knowledge of its officers directly involved in the
transactions the subject of this Agreement the Collateral Agent is not or
ceases to be a United States citizen within the meaning of Section 2 of the
Shipping Act, it will resign as Collateral Agent in accordance with the
provisions of the Loan Documents.


 


15





















 


(l)            Notices.  Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto shall be effective pursuant to the provisions with respect thereto set
forth in the Credit Agreement.  Any
notice to be given to the Securities Intermediary shall be sent, mailed, given
or delivered in accordance with the Credit Agreement to the following address:


McDonald
Investments, Inc.

127 Public Square

Cleveland, Ohio 44114

Attn:  Mike Girabaldi

Fax:  216-689-8282


Any party may change its
address for notices in the manner set forth in the Credit Agreement.


Section 13.            Termination. 
The rights and powers granted herein to the Collateral Agent, granted in
order to perfect the Collateral Agent’s security interest in the Accounts, are
coupled with an interest and will be affected neither by the bankruptcy of any
Borrower or Loan Party or the General Partner nor by the lapse of time.  The rights of the Collateral Agent hereunder
shall continue in effect until all Obligations have been indefeasibly paid in
full and all commitments related thereto and to the Secured Parties Documents have
been terminated.


Section 14.            Amendments. 
Any provision of this Agreement may be modified, supplemented or waived
only by an instrument duly executed by the Borrowers, the Collateral Agent, the
Securities Intermediary and the Administrative Agent (with the consent of the
Lenders as specified in Section 10.1 of the Credit Agreement).  Any such modification, supplement or waiver
shall be for such period and subject to such conditions as shall be specified
in the instrument effecting the same and shall be binding upon the Borrower,
the Collateral Agent, the Securities Intermediary and the Administrative Agent,
and any such waiver shall be effective only in the specific instance and for
the purposes for which given.


Section 15.            Further
Documentation.  At any time and from time to time, upon the
written request of the Administrative Agent and at the sole expense of the
Borrowers and the other Loan Parties, the Loan Parties shall promptly and duly
execute and deliver any and all such further instruments and documents and take
such further action as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and power herein granted.


Section 16.            Authority of
Administrative Agent and Collateral Agent.  The
Administrative Agent and the Collateral Agent each acknowledges that the rights
and responsibilities of the Administrative Agent and the Collateral Agent,
respectively, under this Agreement with respect to any action taken by the
Administrative Agent or the Collateral Agent, as the case may be, or the
exercise or non-exercise by the Administrative Agent or the Collateral Agent,
as the case may be, of any option, right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall,
as between the Administrative Agent or the Collateral Agent, as the case may
be, and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among
them.


 


16





















 


Section 17.            Agreements
Superseded.  This Agreement and the other Loan
Documents supersede all prior agreements and understandings, written or oral,
among the parties with respect to the subject matter of this Agreement.


Section 18.            Collateral
Agent; Exculpation.  By accepting
the benefits of this Agreement, each Secured Party hereby appoints KeyBank
National Association as its collateral agent under and for purposes of this
Agreement.  Each Secured Party authorizes
KeyBank National Association to act on behalf of such Secured Party under this
Agreement, to exercise such powers hereunder as are specifically delegated to
or required of the Collateral Agent by the terms hereof, together with such
powers as may be reasonably incidental thereto. 
Without limiting the provisions of the Credit Agreement, neither the
Collateral Agent nor the Securities Intermediary nor any of their respective
directors, officers, employees or agents shall be liable to any Secured Party
(and each Secured Party will hold the Collateral Agent and the Securities
Intermediary harmless) for any action taken or omitted to be taken by it under
this Agreement, or in connection herewith or therewith, except for the willful
misconduct or gross negligence of the Collateral Agent or the Securities
Intermediary, as the case may be, or responsible for any recitals or warranties
herein or therein, or for the effectiveness, enforceability, validity or due
execution of this Agreement, or to make any inquiry respecting the performance
by any Person of its obligations hereunder.


Section 19.            Severability. 
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.


Section 20.            Captions. 
The captions and section headings appearing in this Agreement are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.


Section 21.            Counterparts. 
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of
the parties to this Agreement may execute this Agreement by signing any such
counterpart.


Section 22.            Successors;
Assignment.  The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto
and their respective successors and permitted assigns.  The Administrative Agent or the Collateral
Agent or the Securities Intermediary, as the case may be, may assign its
respective rights hereunder by sending written notice of such assignment to the
Borrowers (with a copy thereof to the Administrative Agent or the Collateral
Agent, as the case may be).  None of the
Borrowers shall assign or transfer its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent (with
the further consent of the Lenders as specified in Section 10.1 of the Credit
Agreement).


 


[SIGNATURES
BEGIN ON THE FOLLOWING PAGE]


 


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IN WITNESS WHEREOF, the parties hereto have each caused
this Amended and Restated Cash Collateral Control Agreement to be duly executed
as of the day and year first above written.


	
  CANADIAN
  IMPERIAL BANK OF

  COMMERCE, as
  Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-1


Signature Page to Cash Collateral Control Agreement





















 


	
  KEYBANK NATIONAL
  ASSOCIATION,
  as

  Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-2





















 


	
  MCDONALD
  INVESTMENTS, INC.,
  as

  Securities Intermediary

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-3





















 


	
  U.S. SHIPPING PARTNERS
  L.P.

  
	
   

  
	
  By

  	
  US Shipping
  General Partner LLC,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  U.S. SHIPPING OPERATING
  LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  ITB BALTIMORE LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  ITB GROTON LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  ITB JACKSONVILLE LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-4





















 


	
  ITB MOBILE LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  ITB NEW YORK LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  ITB PHILADELPHIA LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  USS CHARTERING LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  USCS CHEMICAL
  CHARTERING LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  USCS CHEMICAL PIONEER
  LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-5





















 


 


	
  USCS CHARLESTON LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  USCS CHARLESTON
  CHARTERING LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


	
  USCS ATB LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


S-6























EXHIBIT M


FORM OF SOLVENCY
CERTIFICATE

OF

U.S. SHIPPING PARTNERS L.P., U.S. SHIPPING OPERATING LLC, 

ITB BALTIMORE LLC, ITB GROTON LLC, ITB JACKSONVILLE LLC, 

ITB MOBILE LLC, ITB NEW YORK LLC, ITB PHILADELPHIA LLC, 

USS CHARTERING LLC, USCS CHEMICAL CHARTERING LLC, 

USCS CHEMICAL PIONEER LLC, USCS CHARLESTON CHARTERING LLC,

USCS CHARLESTON LLC AND USCS ATB LLC


Reference is hereby made
to that certain Second Amended and Restated Credit Agreement, dated as of
November 3, 2004 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “Credit Agreement”), among U.S.
Shipping Partners L.P., a Delaware limited partnership, U.S. Shipping Operating
LLC, ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC,
ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical
Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS
Charleston LLC, and USCS ATB LLC, each a Delaware limited liability company
(each of the foregoing entities individually a “Borrower” and
collectively, the “Borrowers”), the various financial institutions as
are or may become parties thereto (collectively, the “Lenders”),
Canadian Imperial Bank of Commerce (“CIBC”), as letter of credit issuer, CIBC,
as administrative agent for the Lenders (in such capacity together with its
successors in such capacity, the “Administrative Agent”), and KeyBank
National Association, as collateral agent for the Secured Parties (as defined
in the Credit Agreement). Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Credit
Agreement. This Solvency Certificate is being furnished to the Administrative
Agent pursuant to Section 5.1.13 of the Credit Agreement. The undersigned, in
his capacity as Vice President and Chief Financial Officer of US Shipping
General Partner LLC, the general partner of U.S. Shipping Partners L.P., and of
each of the other Borrowers, hereby certifies to the Administrative Agent and
the Lenders, as of the Closing Date, as follows:


1.             I (i) am currently the Vice President and Chief
Financial Officer of US Shipping General Partner LLC, the general partner of
U.S. Shipping Partners L.P. (“General Partner”), and of each of the
other Borrowers, and have full responsibility for the management of the
financial affairs of the Borrowers and their respective Subsidiaries,
(ii) have carefully reviewed the contents of this Solvency Certificate and
have made such investigations and inquiries (including consultation with
counsel) as I have deemed necessary or prudent in connection with the matters
set forth herein, (iii) am familiar with the properties, businesses, assets and
liabilities of the Borrowers and their respective Subsidiaries, and (iv) have
reviewed (or caused to be reviewed on my behalf) the Transaction Documents and
any other agreements, instruments, or documents in respect of any Indebtedness
of the Borrowers and their respective Subsidiaries. I am making this Solvency
Certificate in good faith, believing that the information, estimates and
assumptions which underlie and form the basis for the statements made herein
are reasonable and are the best available on the date hereof.


 


Exhibit
M-- 1





















2.             The value of the assets and properties of the Borrowers
and their respective Subsidiaries, taken as a whole, at a fair valuation and at
their then present fair salable value, are and will be, both before and after
giving effect to the transactions contemplated by the Transaction Documents
(including, without limitation, any pending Credit Extension and the
application thereof), greater than their total Indebtedness and greater than
the amount that would be required to pay their probable aggregate liability on
their then existing Indebtedness as it becomes absolute and matured.


3.             The Borrowers and their respective Subsidiaries, taken
as a whole, are and will be able to, both before and after giving effect to the
transactions contemplated by the Transaction Documents (including, without
limitation, any pending Credit Extension and the application thereof), able to
realize upon all of their assets and properties and pay all of their
Indebtedness as such Indebtedness matures.


4.             With respect to the businesses and transactions in which
each Borrower is engaged or about to engage, such Borrower does not have, and
will not have, both before and after giving effect to the transactions
contemplated by the Transaction Documents (including, without limitation, any
pending Credit Extension and the application thereof), an unreasonably small
amount of capital, after giving due consideration to the prevailing practice of
business entities of established reputation engaged in like businesses and
similarly situated.


5.             Taking into account the transactions contemplated by the
Transaction Documents (including, without limitation, any pending Credit
Extension and the application thereof) and all other businesses and
transactions in which the Borrowers and their respective Subsidiaries are
engaged or intend to be engaged, the Borrowers and their respective
Subsidiaries, taken as a whole, do not intend to or believe that they will
incur Indebtedness that will (i) be beyond their ability to pay as such
Indebtedness matures or (ii) interfere with their ability to pay their other
Indebtedness as such Indebtedness matures.


6.             In consummating the transactions contemplated by the
Transaction Documents, each of the Borrowers does not intend to disturb,
hinder, delay or defraud any of its present or future creditors (including,
without limitation, any Secured Party) or any other Person to which it is or
will become, on or after the date hereof, obligated or indebted.


I understand that the
Administrative Agent and the Lenders are relying on the truth and accuracy of
the foregoing in connection with the extension of credit under the Credit
Agreement.


 


Exhibit
M-- 2





















 


IN WITNESS WHEREOF, the
undersigned has executed this Solvency Certificate as of the 3rd day of
November, 2004.


 


 


 


 


	
  By:

  	
   

  
	
  Name:

  	
  Albert Bergeron

  
	
  Title:

  	
  Vice President
  and Chief Financial Office of each of US Shipping General Partner LLC, the
  general partner of U.S. Shipping Partners L.P., U.S. Shipping Operating LLC,
  ITB Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB
  New York LLC, ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical
  Chartering LLC, USCS Chemical Pioneer LLC, USCS Charleston Chartering LLC,
  USCS Charleston LLC, and USCS ATB LLC

  
			



 


 


Exhibit M-- 3










 













EXHIBIT N


FORM
OF ADDITIONAL LENDER CERTIFICATE


              ,
20    


 


	
  To:

  	
   

  	
  Canadian
  Imperial Bank of Commerce,

  
	
   

  	
   

  	
  as
  Administrative Agent

  



 


The Borrowers, the
Administrative Agent, the Letter of Credit Issuer and the other Agents and
certain Lenders have heretofore entered into a Second Amended and Restated
Credit Agreement, dated as of November 3, 2004, with U.S. Shipping Partners
L.P., U.S. Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB
Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS
Chartering LLC, USCS Chemical Chartering LLC, USCS Charleston LLC, USCS
Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS ATB LLC, as amended,
restated, supplemented or otherwise modified from time to time (the “Credit Agreement”).  Capitalized terms not otherwise defined
herein shall have the meaning given to such terms in the Credit Agreement.


This Additional Lender
Certificate is being delivered pursuant to Section 2.1.6 of the Credit
Agreement.


[Language for Existing Lender]


[Please be advised that
the undersigned has agreed to increase its [Term Loan Commitment Amount]
[Revolving Commitment Amount] under the Credit Agreement effective as of                        
from $            to $           
and (b) that it shall continue to be a party in all respects to the Credit
Agreement and the other Loan Documents.]


[Language for New Lender]


[Please be advised that
the undersigned has agreed (a) to become a Lender under the Credit Agreement
effective as of                            
with a [Term Loan Commitment Amount] [Revolving Commitment Amount] of $            
and (b) that it automatically shall be deemed to be a party in all respects to
the Credit Agreement and the other Loan Documents as if originally a signatory
thereto.]


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


 


Exhibit N -- 1










 













EXHIBIT O


FORM OF LENDER ADDENDUM AGREEMENT


Reference is made to the
Second Amended and Restated Credit Agreement dated as of November 3, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among U.S. SHIPPING
PARTNERS L.P., a Delaware limited partnership (the “MLP”), U.S. SHIPPING OPERATING
LLC, a Delaware limited liability company (“Operating LLC”),
ITB BALTIMORE LLC,
a Delaware limited liability company, ITB GROTON LLC, a Delaware limited liability company, ITB JACKSONVILLE LLC,
a Delaware limited liability company, ITB MOBILE LLC, a Delaware limited liability company, ITB NEW YORK LLC,
a Delaware limited liability company, ITB PHILADELPHIA LLC, a Delaware limited liability company, USS CHARTERING LLC,
a Delaware limited liability company (“Charter LLC”), USCS CHEMICAL CHARTERING LLC, a
Delaware limited liability company (“Chemical Chartering”), USCS CHEMICAL PIONEER LLC,
a Delaware limited liability company (“Chemical Pioneer”), USCS CHARLESTON
CHARTERING LLC, a Delaware limited liability company (“USCS Chartering”),
USCS CHARLESTON LLC,
a Delaware limited liability company (“Charleston”), USCS ATB LLC, a Delaware limited
liability company (“ATB
LLC”) (each of the foregoing being individually called a “Borrower”
and collectively, the “Borrowers”),
the various financial institutions as are or may become parties hereto
(collectively, the “Lenders”),
CANADIAN IMPERIAL
BANK OF COMMERCE, in its capacity as the Administrative Agent and
the Letter of Credit Issuer, and KeyBank National Association, in its capacity
as the Collateral Agent.  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.


Upon execution and
delivery of this Lender Addendum Agreement by the parties hereto as provided in
Section 10.17 of the Credit Agreement, the undersigned hereby becomes a Lender
thereunder having the Commitments set forth in Schedule I hereto, effective as
of the date of the Credit Agreement.


The undersigned hereby
acknowledges and confirms that it has received a copy of the Credit Agreement
and the exhibits related thereto, together with copies of the documents which
were required to be delivered under the Credit Agreement as a condition to the
making of the Credit Extensions thereunder including, without limitation, the
Guaranty, the Mortgages, the Pledge Agreement and the Security Agreement and
agrees to be bound by the Terms thereof. 
The undersigned further confirms and agrees that in becoming a Lender
and in making its Commitments and Credit Extensions under the Credit Agreement,
such actions have and will be made without recourse to, or representation or
warranty by the Administrative Agent, Letter of Credit Issuer, Arranger or
Collateral Agent.


Except as otherwise
provided in the Credit Agreement, effective as of the date of acceptance hereof
by the Administrative Agent


(a)           the
undersigned


(i)            shall
be deemed automatically to have become a party to the Credit Agreement, have
all the rights and obligations of a “Lender” under the Credit


 


Exhibit O -- 1





















 


Agreement and the other Loan Documents as if it were an original
signatory thereto to the extent of the Commitments specified in Schedule I
hereto; and


(ii)           agrees
to be bound by the terms and conditions set forth in the Credit Agreement and
the other Loan Documents as if it were an original signatory thereto.


The undersigned hereby
advises each of the Borrowers, the Letter of Credit Issuer, the Administrative
Agent and the Collateral Agent of the administrative details with respect to
its Loans and Commitments specified in Schedule I hereto.


The undersigned
represents that it has furnished the tax form required by Section 4.6
(if applicable) of the Credit Agreement no later than the date of acceptance
hereof by the Administrative Agent.


THIS LENDER ADDENDUM
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION).


This Lender Addendum
Agreement may be executed by one or more of the parties hereto on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  Delivery of an executed signature page
thereof by facsimile transmission shall be effective as delivery of a manually
executed counterpart thereof.


IN WITNESS WHEREOF, the parties hereto have caused this
Lender Addendum Agreement to be duly executed and delivered by their proper and
duly authorized officers as of this 3rd day of November, 2004.


	
   

  	
  [NAME OF LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


 


Exhibit
O -- 2





















 


	
   

  	
  ACCEPTED AND AGREED:

  
	
   

  	
   

  
	
   

  	
  U.S. SHIPPING PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  US Shipping General Partner LLC, its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. SHIPPING OPERATING LLC, ITB BALTIMORE LLC, ITB BALTIMORE LLC,
  ITB JACKSONVILLE LLC, ITB MOBILE LLC, ITB NEW YORK LLC, ITB PHILADELPHIA LLC,
  USS CHARTERING LLC, USCS CHEMICAL CHARTERING LLC, USCS CHEMICAL PIONEER LLC,
  USCS CHARLESTON CHARTERING LLC, USCS CHARLESTON LLC, USCS ATB LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN IMPERIAL BANK OF COMMERCE, as
  Administrative Agent and Letter of Credit Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


 


Exhibit
O -- 3





















 


Schedule I


 


COMMITMENTS
AND NOTICE ADDRESS


 


	
  1.

  	
  Name of Lender:

  	
   

  
	
   

  	
  Notice Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
  Domestic Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LIBOR Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Revolving Commitment:

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Term Commitment:

  	
   

  
				



 


 


Exhibit
O -- 4










 













EXHIBIT
P


FORM OF EXEMPTION CERTIFICATE


 


Reference is made to the Second Amended and Restated
Credit Agreement, dated as of November 3, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among U.S. Shipping Partners L.P., a
Delaware limited partnership, U.S. Shipping Operating LLC, ITB Baltimore LLC,
ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB
Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering LLC, USCS
Chemical Pioneer LLC, USCS Charleston Chartering LLC, USCS Charleston LLC, and
USCS ATB LLC, each a Delaware limited liability company and each as a Borrower, the several Lenders from
time to time party thereto, Canadian Imperial Bank of Commerce, as
Administrative Agent, and the other agents therein named. Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.  [Name of Non-U.S. Lender] (the “Non-U.S.
Lender”) is providing this certificate pursuant to Section 4.6 of the Credit
Agreement.  The Non-U.S. Lender hereby
represents and warrants that:


5.             The
Non-U.S. Lender is the sole record and beneficial owner of the Loans in respect
of which it is providing this certificate.


6.             The
Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended (the “Code”).  In this regard, the Non-U.S. Lender further
represents and warrants that:


(a)           the Non-U.S. Lender
is not subject to regulatory or other legal requirements as a bank in any
jurisdiction;


(b)           the
Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental
Authority, any application made to a rating agency or qualification for any
exemption from tax, securities law or other legal requirements; and


(c)           receiving deposits
and making loans and discounts does not constitute a substantial part of the
Non-U.S. Lender’s business.


7.             The Non-U.S. Lender is not a
10-percent shareholder of either Borrower within the meaning of Section
881(c)(3)(B) of the Code.


8.             The Non-U.S. Lender is not a
controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code.


 


 


Exhibit
P-- 1





















 


IN WITNESS WHEREOF, the undersigned has duly
executed this certificate.


[NAME OF NON-U.S. LENDER]


	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Date:

  	
   

  



 


 


Exhibit
P-- 2





















EXHIBIT
Q


PROJECTIONS




Attached.


 


 


 


 


 


Exhibit
Q -- 1










 


 


 













EXHIBIT R


FORM OF GENERAL PARTNER
LETTER


The Lenders party to the Credit Agreement
  referred to below


 


Canadian Imperial Bank of Commerce,
  as Administrative Agent (as defined
below)


 


The Collateral Agent (as defined in the Credit
Agreement
  referred to below)


Ladies and Gentlemen,


Reference is hereby made
to that certain Second Amended and Restated Credit Agreement, dated as of
November 3, 2004 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “Credit Agreement”), among U.S.
Shipping Partners L.P., a Delaware limited partnership (the “MLP”),
U.S. Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB
Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS
Chartering LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer LLC, USCS
Charleston Chartering LLC, USCS Charleston LLC, and USCS ATB LLC, each a
Delaware limited liability company (each of the foregoing entities individually
a “Borrower” and collectively, the “Borrowers”), the various
financial institutions as are or may become parties thereto (collectively, the “Lenders”),
Canadian Imperial Bank of Commerce (“CIBC”), as letter of credit issuer,
CIBC, as administrative agent for the Lenders (in such capacity together with
its successors in such capacity, the “Administrative Agent”), and
KeyBank National Association, as collateral agent for the Secured Parties (as
defined in the Credit Agreement).  Unless
otherwise defined herein or the context otherwise requires, capitalized terms
used herein have the same meanings as set forth in the Credit Agreement.


In consideration of the
Lenders, the Administrative Agent and the Collateral Agent entering into the
Credit Agreement, US Shipping General Partner LLC, a Delaware limited liability
company and the sole general partner of U.S. Shipping Partners L.P. (the “General Partner”),
hereby agrees that, for so long as it is the general partner of the MLP, (a)
its sole business will be to act as the general partner of the MLP and as a
member, partner or stockholder of any limited liability company, limited
partnership or corporation of which any Borrowers, or any of their
Subsidiaries, or the MLP is, directly or indirectly, a limited partner and to
undertake activities that are ancillary or related thereto (including being a
limited partner in the MLP), (b) it shall not enter into or conduct any
business or incur any debts or liabilities except in connection with or
incidental to (i) its performance of the activities required or authorized by
the MLP Agreement, and (ii) the acquisition, ownership or disposition of
partnership interests in the MLP or any further limited partnership of which
any Borrower or the MLP is, directly or indirectly, a limited partner; and (c)
it shall not take any action or refuse to take any reasonable action the effect
of which, if taken or not taken, as the case may be, would be to cause MLP to
be treated as


 


 


Exhibit
R -- 1





















 


an association
taxable as a corporation or otherwise to be taxed as an entity other than a
partnership for federal income tax purposes.


General Partner hereby acknowledges that its
agreements contained herein are an inducement to the Lenders, the
Administrative Agent and the Collateral Agent entering into the Credit
Agreement and that this letter is, and shall be deemed to be, a Loan Document.


THIS LETTER SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY
CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANY OTHER JURISDICTION).


 


	
  Very truly yours,

  
	
   

  
	
  US SHIPPING GENERAL
  PARTNER LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


Exhibit
R -- 2