Exhibit 4.1


AMENDMENT NO. 1 TO AMENDED AND RESTATED
 AGREEMENT OF LIMITED PARTNERSHIP OF
 U.S. SHIPPING PARTNERS L.P.


          This Amendment No. 1, dated as of August 7, 2006 (this “Amendment”), to the Amended and Restated Agreement of Limited Partnership, dated as of November 3, 2004 (the “Partnership Agreement”), of U.S. Shipping Partners L.P., a Delaware limited partnership (the “Partnership”), is entered into and effectuated by US Shipping General Partner LLC, a Delaware limited liability company, as the general partner of the Partnership (the “General Partner”), pursuant to authority granted to it in Article XIII of the Partnership Agreement.  Capitalized terms used but not defined herein are used as defined in the Partnership Agreement.


          WHEREAS, Section 5.6(a) of the Partnership Agreement provides that the Partnership may issue additional Partnership Securities for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the General Partner shall determine, all without the approval of any Limited Partners; 


          WHEREAS, Section 5.6(b) of the Partnership Agreement provides that the Partnership Securities authorized to be issued by the Partnership pursuant to such Section 5.6(a) of the Partnership Agreement may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties as shall be fixed by the General Partner; 


          WHEREAS, in connection with the Partnership’s entry into a joint venture to construct product tankers, in which the Partnership owns a minority interest but has control of the board of directors of the joint venture, the Partnership desires to amend the definition of “Subsidiary” to exclude the joint venture;


          WHEREAS, the Partnership has determined that certain provisions of the Partnership Agreement described in the final prospectus included in the Registration Statement were inadvertently omitted from the Partnership Agreement;


          WHEREAS, Section 13.1(d)(iv) of the Partnership Agreement provides that the General Partner, without the approval of any Limited Partner, may amend any provision of the Partnership Agreement that is required to effect the intent expressed in the Registration Statement;


          WHEREAS, Section 13.1(g) of the Partnership Agreement provides that the General Partner, without the approval of any Limited Partner (subject to the provisions of Section 5.7 of the Partnership Agreement), may amend any provision of the Partnership Agreement that the General Partner determines to be necessary or appropriate in connection with the authorization of the issuance of any class or series of Partnership Securities pursuant to Section 5.6 of the Partnership Agreement;



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          WHEREAS, Section 13.1(j) of the Partnership Agreement provides that the General Partner, without the approval of any Limited Partner, may amend any provision of the Partnership Agreement that, in the discretion of the Company Board, is necessary or advisable to reflect, account for and deal with appropriately the formation by the Company of, or investment by the Company in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Company of activities permitted by the terms of Section 2.4 of the Partnership Agreement, 


          WHEREAS, the Board of Directors of the General Partner (the “Board”) has determined that the issuance of the Class B Convertible Units provided for in this Amendment is permitted by Section 5.7 of the Partnership Agreement; 


          WHEREAS, Section 13.1(d) of the Partnership Agreement provides that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect; and


          WHEREAS, the Board deems it in the best interest of the Partnership to effect this Amendment to provide for (i) the issuance of Common Units and Class B Convertible Units to certain accredited investors pursuant to a Common Unit and Class B Unit Purchase Agreement, dated as of August 4, 2006, (ii) the conversion of such Class B Convertible Units into Common Units in accordance with the terms described herein, (iii) the amendment of the definition of “Subsidiary” to exclude the joint venture, (iv) the amendment of the definition of “Available Cash” to reflect the intent of the Registration Statement by conforming such definition to that contained in the Registration Statement and (v) such other matters as are provided herein.


          NOW, THEREFORE, it is hereby agreed that the Partnership Agreement is hereby amended as follows:


          1.          Section 1.1 of the Partnership Agreement is hereby amended to add or amend and restate the following definitions: 

	
  
 
  	
  
            “Basic Surplus” means, with respect to   any period ending prior to the Liquidation Date, on a cumulative basis and   without duplication,
  





	
  
 
  	
  
                    (a)     the   sum of (i) $10 million, (ii) all cash and cash equivalents of the Partnership   Group on hand as of the close of business on the Closing Date, (iii) all cash   receipts of the Partnership Group for the period beginning on the Closing   Date and ending on the last day of such period, other than cash receipts from   Interim Capital Transactions (except to the extent specified in Section 6.5),   (iv) all cash receipts of the Partnership Group after the end of such period   but on or before the date of determination of Basic Surplus with respect to   such period resulting from Working Capital Borrowings and (v) the amount of   interest paid on debt incurred and distributions paid on equity issued, in   each case in connection with the construction of a Capital Improvement or   replacement asset and paid during
the period beginning on the date that the   Partnership enters into a binding obligation to commence construction 
  




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of such   Capital Improvement or replacement asset and ending on the earlier to occur   of the date that such Capital Improvement or replacement asset Commences   Commercial Service or the date that it is abandoned or disposed of (equity   issued or debt incurred to fund the construction period interest payments on   debt incurred, or construction period distributions on equity issued, to   finance the construction of a Capital Improvement or replacement asset shall   also be deemed to be equity issued or debt incurred, as the case may be, to   finance the construction of a Capital Improvement or replacement asset for   purposes of this clause (v)), less
  
	
   
  	
  
 
  
	
  
 
  	
  
                    (b)     the   sum of (i) Operating Expenditures for the period beginning on the Closing   Date and ending on the last day of such period and (ii) the amount of cash   reserves established by the General Partner to provide funds for future   Operating Expenditures; provided, however, that disbursements made (including   contributions to a Group Member or disbursements on behalf of a Group Member)   or cash reserves established, increased or reduced after the end of such   period but on or before the date of determination of Available Cash with   respect to such period shall be deemed to have been made, established,   increased or reduced, for purposes of determining Basic Surplus, within such   period if the General Partner so determines.
  





	
  
 
  	
  
          Notwithstanding   the foregoing, “Basic Surplus”   with respect to the Quarter in which the Liquidation Date occurs and any   subsequent Quarter shall equal zero.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Class B Distribution Increase Date” has   the meaning assigned to such term in Section 5.12(g).
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Class B Convertible Unit Arrearage”   means, with respect to any Class B Convertible Unit, whenever used, as to any   Quarter, the amount, if any, by which (a) the Minimum Quarterly Distribution   in respect of such Quarter (or, for the period from the Class B Distribution   Increase Date through the Conversion Effective Date, 115% of the Minimum   Quarterly Distribution) exceeds (b) the sum of all Available Cash distributed   with respect to a Class B Convertible Unit in respect of such Quarter   pursuant to Section 5.12(b)(ii)(B)(x).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Class B Convertible Units” means a   Partnership Security representing a fractional part of the Partnership   Interests of all Limited Partners and Assignees, and having the rights and   obligations specified with respect to the Class B Convertible Units in this   Agreement.  The term “Class B Convertible Unit” does not refer   to (a) a Common Unit prior to the conversion of a Class B Convertible Unit   into a Common Unit pursuant to the terms hereof or (b) a Subordinated Unit.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Conversion Approval” has the meaning   assigned to such term in Section 5.12(f).
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Conversion Approval Date” has the   meaning assigned to such term in Section 5.12(f).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Conversion Effective Date” has the   meaning assigned to such term in Section 5.12(h).
  




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          “Cumulative Class B Convertible Unit Arrearage”   means, with respect to any Class B Convertible Unit, whenever used, as of the   end of any Quarter, the excess, if any, by which (a) the sum resulting from   adding together the Class B Convertible Unit Arrearages for each of the   Quarters during which any Class B Convertible Unit has been Outstanding   exceeds (b) the sum of any distributions theretofore made to a Class B   Convertible Unit pursuant to Section 5.12(b)(ii)(B) and the penultimate   sentence of Section 6.5 (including any distributions to be made in respect of   the last of such Quarters).
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Excess Payment” has the meaning set forth   in Section 5.12(b)(vi)(B) (as set forth in Section 5.12(g)).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Initial Unit Price” means (a) with   respect to the Common Units, the Class B Convertible Units, the Class A   Subordinated Units and the Class B Subordinated Units, the initial public   offering price per Common Unit at which the Underwriters offered the Common   Units to the public for sale as set forth on the cover page of the prospectus   included as part of the Registration Statement and first issued at or after   the time the Registration Statement first became effective or (b) with   respect to any other class or series of Units, the price per Unit at which   such class or series of Units is initially sold by the Partnership, as   determined by the General Partner, in each case adjusted as the General Partner   determines to be appropriate to give effect to any distribution, subdivision   or combination of Units.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Issue Price” means the price at which a   Unit is purchased from the Partnership, after taking into account any sales   commission or underwriting discount charged to the Partnership and after   taking into account any other form of discount with respect to the price at   which a Unit is purchased from the Partnership; provided, however, in the case of the Class B Convertible   Units, the Issue Price shall be deemed to be $17.12 per unit and in the case   of the Privately Placed Common Units, $18.34 per unit.
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Private Placement Value” means with   respect to the Class B Convertible Units and the Privately Placed Common   Units, $20.99 per unit.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Privately Placed Common Units” means the   Common Units issued pursuant to the Unit Purchase Agreement.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Remaining Net Positive Adjustments”   means, as of the end of any taxable period, (i) with respect to the   Unitholders holding Common Units, Class B Convertible Units, Class A   Subordinated Units or Class B Subordinated Units, the excess of (a) the Net   Positive Adjustments of the Unitholders holding Common Units, Class B   Convertible Units, Class A Subordinated Units or Class B Subordinated Units   as of the end of such period exceeds (b) the sum of those Partners’ Share of   Additional Book Basis Derivative Items for each prior taxable period, (ii)   with respect to the General Partner (as holder of the General Partner   Interest), the amount by which (a) the Net Positive Adjustments of the   General Partner as of the end of such period exceeds (b) the sum of the   General Partner’s Share of Additional Book Basis Derivative Items with   respect to the General Partner
Interest for each prior taxable period, and   (iii) with respect to the holders of 
  



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Incentive   Distribution Rights, the amount by which (a) the Net Positive Adjustments of   the holders of Incentive Distribution Rights as of the end of such period   exceeds (b) the sum of the Share of Additional Book Basis Derivative Items of   the holders of the Incentive Distribution Rights for each prior taxable   period.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Share of Additional Book Basis Derivative Items”   means, in connection with any allocation of Additional Book Basis Derivative   Items for any taxable period, (i) with respect to the Unitholders holding   Common Units, Class B Convertible Units, Class A Subordinated Units or Class   B Subordinated Units, the amount that bears the same ratio to such Additional   Book Basis Derivative Items as the Unitholders’ Remaining Net Positive   Adjustments as of the end of such period bears to the Aggregate Remaining Net   Positive Adjustments as of that time, (ii) with respect to the General   Partner (as holder of the General Partner Interest), the amount that bears   the same ratio to such additional Book Basis Derivative Items as the General   Partner’s Remaining Net Positive Adjustments as of the end of such period   bears to the Aggregate Remaining Net Positive Adjustment as of that
time, and   (iii) with respect to the Partners holding Incentive Distribution Rights, the   amount that bears the same ratio to such Additional Book Basis Derivative   Items as the Remaining Net Positive Adjustments of the Partners holding the   Incentive Distribution Rights as of the end of such period bears to the   Aggregate Remaining Net Positive Adjustments as of that time.
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Subsidiary” means, with respect to any   Person, (a) a corporation of which more than 50% of the voting power of shares   entitled (without regard to the occurrence of any contingency) to vote in the   election of directors or other governing body of such corporation is owned,   directly or indirectly, at the date of determination, by such Person, by one   or more Subsidiaries of such Person or a combination thereof, (b) a   partnership (whether general or limited) in which such Person or a Subsidiary   of such Person is, at the date of determination, a general or limited partner   of such partnership, but only if more than 50% of the partnership interests   of such partnership (considering all of the partnership interests of the   partnership as a single class) is owned, directly or indirectly, at the date   of determination, by such Person, by one or more Subsidiaries of such Person,
or a combination thereof, or (c) any other Person (other than a corporation   or a partnership) in which such Person, one or more Subsidiaries of such   Person, or a combination thereof, directly or indirectly, at the date of   determination, has (i) at least a majority ownership interest or (ii) the   power to elect or direct the election of a majority of the directors or other   governing body of such Person; provided,   however, that U.S. Product Investors LLC shall not be a Subsidiary   of the Company for purposes of this Agreement.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Unit” means a Partnership Security that   is designated as a “Unit” and shall include Common Units, Class B Convertible   Units and Class A Subordinated Units, Class B Subordinated Units but shall   not include (i) a General Partner Interest or (ii) Incentive Distribution   Rights.
  
	
   
  	
  
 
  
	
  
 
  	
  
          “Unit Majority” means, during the Class A   Subordination Period, a majority of the Outstanding Common Units (excluding   Common Units owned by the General Partner and its Affiliates) voting as a   class, a majority of the Class B Convertible Units voting as 
  




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a class, and   a majority of the Outstanding Class A Subordinated Units and Class B   Subordinated Units voting as a single class, and, after the end of the Class   A Subordination Period, a majority of the Outstanding Units.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          “Unit Purchase Agreement” means the   Common Unit and Class B Unit Purchase Agreement, dated as of August 4, 2006,   among the Partnership and the purchasers named therein.
  
	
  
 
  	
  
 
  
	
   
  	
  
          “Unitholders” means the holders of Common   Units, Class B Convertible Units and Subordinated Units.
  




          2.        Section 1.1 of the Partnership Agreement is hereby further amended to amend and restate the final sentence of the definition of “Common Unit” as follows:

	
  
 
  	
  
          The   term “Common Unit” does not   refer to a Subordinated Unit or a Class B Convertible Unit prior to its   conversion into a Common Unit pursuant to the terms hereof.
  




          3.        Section 4.5(f) of the Partnership Agreement is hereby amended and restated to read in its entirety:

	
  
 
  	
  
          Subject   to Section 4.10, the General Partner and its Affiliates shall have the right   at any time to transfer their Class A Subordinated Units, Class B   Subordinated Units, Class B Convertible Units and Common Units (whether   issued upon conversion of the Subordinated Units, the Class B Convertible   Units or otherwise) to one or more Persons who are U.S. Citizens.
  



          4.        Section 4.8(c) of the Partnership Agreement is hereby amended and restated to read in its entirety:

	
  
 
  	
  
          (c)     The   transfer of a Subordinated Unit shall be subject to the restrictions imposed   by Section 6.7(b).  The transfer of a   Class B Convertible Unit or a Privately Placed Common Unit shall be subject to   the restrictions imposed by Section 6.7(c).
  




          5.        Section 5.5(a) of the Partnership Agreement is hereby amended to add the following at the end of such section:

	
  
 
  	
  
The initial   Capital Account balance in respect of each Class B Convertible Unit shall be   the Private Placement Value for such Class B Convertible Unit, and the   initial Capital Account balance of each holder of Class B Convertible Units   in respect of all Class B Convertible Units held shall be the product of such   initial balance for a Class B Convertible Unit multiplied by the number of   Class B Convertible Units held thereby.    The initial Capital Account balance in respect of each Privately   Placed Common Unit shall be the Private Placement Value for such Privately   Placed Common Unit, and the initial Capital Account balance of each holder of   Privately Placed Common Units in respect of all Privately Placed Common Units   held shall be the product of such initial balance for a Privately Placed   Common Unit multiplied by the number of Privately Placed Common Units held   thereby.  Immediately following the   creation of a Capital





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 Account balance in respect of each Class B Convertible Unit, each Unitholder   acquiring a Class B Convertible Unit at original issuance shall be deemed to   have received a cash distribution in respect of such Class B Convertible   Units in an amount equal to the product of (x) the total number of Class B   Convertible Units so acquired by such Unitholder, multiplied by (y) the   difference between the Private Placement Value and the Issue Price of a Class   B Convertible Unit.  Immediately   following the creation of a Capital Account balance in respect of each   Privately Placed Common Unit, each Unitholder acquiring a Privately Placed   Common Unit at original issuance shall be deemed to have received a cash   distribution in respect of such Privately Placed Common Units in an amount   equal to the product of (x) the total number of Privately Placed Common Units   so acquired by such Unitholder, multiplied by (y) the difference between the
Private Placement Value and the Issue Price of a Privately Placed Common   Unit.
  




          6.        Section 5.5(d)(i) of the Partnership Agreement is hereby amended to add the following at the end of such section:

	
  
 
  	
  
          Any   adjustments that are made under this paragraph in connection with the   issuance of the Class B Convertible Units or the Privately Placed Common   Units shall be based on the Private Placement Value of the Class B   Convertible Units and the Privately Placed Common Units.
  



          7.        Section 5.8 of the Partnership Agreement is hereby amended to add a new clause (iv) to each of Sections 5.8(a), 5.8(b), 5.8(d) and 5.8(e) as follows:

	
  
 
  	
  
          (iv)     the   Cumulative Class B Convertible Unit Arrearage on all of the Outstanding Class   B Convertible Units is zero.
  




          8.        Section 5.10(a) of the Partnership Agreement is hereby amended and restated to read in its entirety:

	
  
 
  	
  
           Subject   to Sections 5.10(d), 6.6 and 6.9 (dealing with adjustments of distribution   levels), the Partnership may make a Pro Rata distribution of Partnership   Securities to all Record Holders or may effect a subdivision or combination   of Partnership Securities so long as, after any such event, each Partner   shall have the same Percentage Interest in the Partnership as before such   event, and any amounts calculated on a per Unit basis (including any Common   Unit Arrearage, Cumulative Common Unit Arrearage, Class B Convertible Unit   Arrearage or Cumulative Class B Convertible Unit Arrearage) or stated as a   number of Units (including the number of Common Units into which Class A   Subordinated Units or Class B Subordinated Units may convert prior to the end   of the Subordination Period, the number of Common Units into which Class B   Convertible Units may convert and the number of
additional Parity Units that   may be issued pursuant to Section 5.7 without a Unitholder vote) are   proportionately adjusted.
  



          9.        Article V of the Partnership Agreement is hereby amended to add a new Section 5.12 creating a new class of Units as follows:


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            Section 5.12 Establishment of Class B Convertible Units.

	
  
 
  	
  
          (a)          General.  The General Partner hereby designates and creates a class of   Units to be designated as “Class B Convertible Units” and consisting of a   total of 3,123,205 Class B Convertible Units, and fixes the designations,   preferences and relative, participating, optional or other special rights,   powers and duties of holders of the Class B Convertible Units as set forth in   this Section 5.12.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Rights of Class B Convertible Units.  During the period commencing   upon issuance of the Class B Convertible Units and ending on the Conversion   Effective Date (or that later time specified in this Section 5.12(b)), unless   amended pursuant to Section 5.12(i) hereof:
  





	
  
 
  	
  
                    (i)     Allocations.    Except as otherwise provided in this Agreement, all items   of Partnership income, gain, loss, deduction and credit shall be allocated to   the Class B Convertible Units to the same extent as such items would be so   allocated if such Class B Convertible Units were Common Units (other than   Privately Placed Common Units) that were then Outstanding.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    (ii)    Distributions from Basic Surplus During   Subordination Periods. Notwithstanding anything to the contrary in   Section 6.4(a), Unitholders holding Class B Convertible Units shall receive   the same distribution per Unit pursuant to Section 6.4(a) as Unitholders   holding Common Units receive pursuant to Section 6.4(a); provided that
  





	
  
 
  	
  
            (A)     Unitholders   holding Class B Convertible Units shall not receive any distribution pursuant   to Section 6.4(a)(i) or Section 6.4(a)(ii); and
  
	
   
  	
  
 
  
	
  
 
  	
  
            (B)     following   any distribution pursuant to Section 6.4(a)(ii) and, prior to any   distribution pursuant to Section 6.4(a)(iii), Available Cash shall be distributed   as follows: (x) 98% to the Unitholders holding Class B Convertible Units, Pro   Rata, and 2% to the General Partner, until there has been distributed in   respect of each Class B Convertible Unit then Outstanding an amount equal to   the Minimum Quarterly Distribution for such Quarter; and (y) then, 98% to the   Unitholders holding Class B Convertible Units, Pro Rata, and 2% to the   General Partner, until there has been distributed in respect of each Class B   Convertible Unit then Outstanding an amount equal to the Cumulative Class B   Convertible Unit Arrearage, if any, existing with respect to such Quarter.
  





	
  
 
  	
  
                   (iii)     Distributions from Basic Surplus After   Subordination Periods. Notwithstanding anything to the contrary in   Section 6.4(b), Unitholders holding Class B Convertible Units shall receive   the same distribution per Unit pursuant to Section 6.4(b) as other   Unitholders receive pursuant to Section 6.4(b); provided, that:
  






	
  
 
  	
  
             (A)     Unitholders   holding Class B Convertible Units shall not receive any distributions   pursuant to Section 6.4(b)(i); and
  




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             (B)     following   any distribution pursuant to Section 6.4(b)(i) (subject to Section   5.12(b)(iii)(A)) and prior to any distribution pursuant to Section   6.4(b)(ii), Available Cash shall be distributed 98% to the Unitholders   holding Class B Convertible Units, Pro Rata, and 2% to the General Partner   until there has been distributed in respect of each Class B Convertible Unit   then Outstanding an amount equal to the Minimum Quarterly Distribution for   such Quarter.
  





	
  
 
  	
  
                   (iv)     Allocation of Net Termination Gain to Class B   Convertible Unitholders.    Notwithstanding anything to the contrary in Section 6.1(c)(i),   Unitholders holding Class B Convertible Units shall be allocated Net   Termination Gain in accordance with Section 6.1(c)(i); provided, that
  





	
  
 
  	
  
            (A)     Unitholders   holding Class B Convertible Units shall not receive any allocation pursuant   to Section 6.1(c)(i)(B) or Section 6.1(c)(i)(C); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
            (B)     following   any allocation made pursuant to Section 6.1(c)(i)(B) and prior to any   allocation made pursuant to Section 6.1(c)(i)(C), any remaining Net Termination   Gain shall be allocated 98% to all Unitholders holding Class B Convertible   Units, Pro Rata, and 2% to the General Partner, until the Capital Account in   respect of each Class B Convertible Unit then Outstanding is equal to the sum   of (1) its Unrecovered Capital, determined for the taxable year (or portion   thereof) to which this allocation of gain relates, plus (2) the Minimum   Quarterly Distribution for the Quarter during which the Liquidation Date   occurs, reduced by any distribution pursuant to Section 5.12(b)(ii)(B)(x)   with respect to such Class B Convertible Unit for such Quarter, plus (3) any   then existing Cumulative Class B Convertible Unit Arrearage.
  





	
   
  	
  
                   (v)     Allocation of Net Termination Loss to Class B   Convertible Unitholders.    Notwithstanding anything to the contrary in Section 6.1(c)(ii), with   respect to allocations made in accordance with Section 6.1(c)(ii),   Unitholders holding Class B Convertible Units shall be allocated Net   Termination Loss in accordance with Section 6.1(c)(ii)(B) in the same manner   as Unitholders holding Common Units.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                   (vi)    Elimination of Cumulative Class B Convertible Unit   Arrearages Upon Conversion.    If a Cumulative Class B Convertible Unit Arrearage exists on the   Conversion Effective Date, Available Cash shall be distributed 98% to the   Unitholders holding Class B Convertible Units, Pro Rata, and 2% to the   General Partner, until there has been distributed in respect of each Class B   Convertible Unit then Outstanding an amount equal to the Cumulative Class B   Convertible Unit Arrearage as of such date.    This distribution shall not be deemed a distribution on a Common Unit,   but the satisfaction of prior entitlements of the holders of Class B   Convertible Units as of the Conversion Effective Date.  For the taxable year in which the   distribution is made, if not previously allocated, each Person receiving
such   distribution shall be allocated items of gross income in an amount equal to   such distribution as provided in Section 6.1(d)(iii)(A).
  




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                   (c)     Voting Rights.    The Class B Convertible Units will have such voting rights   pursuant to the Partnership Agreement as such Class B Convertible Units would   have if they were Common Units that were then Outstanding, except that (i)   with respect to Conversion Approval, none of the Class B Convertible Units   shall be deemed Outstanding as of the record date for such vote or be   entitled to vote thereon and (ii) other than with respect to Conversion   Approval, the Class B Convertible Units shall be entitled to vote as a   separate class on any matter that adversely affects the rights or preferences   of the Class B Convertible Units in relation to other classes of Partnership   Interests or as required by law.  The   approval of a majority of the Class B Convertible Units shall be required to
approve any matter for which the holders of the Class B Convertible Units are   entitled to vote as a separate class.    Each Class B Convertible Unit will be entitled to the number of votes   equal to the number of Common Units into which a Class B Convertible Unit is   convertible at the time of the record date for the vote or written consent on   the matter.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                   (d)     Certificates.  The Class B Convertible Units will be evidenced by certificates   in such form as the General Partner may approve and, subject to the   satisfaction of any applicable legal and regulatory requirements, may be   assigned or transferred in a manner identical to the assignment and transfer   of other Units.  The certificates will   initially include a restrictive legend to the effect that the Class B   Convertible Units have not been registered under the Securities Act or any   state securities laws.
  
	
   
  	
  
 
  
	
  
 
  	
  
                   (e)     Registrar and Transfer Agent.  The General Partner will act as registrar   and transfer agent of the Class B Convertible Units.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                   (f)     Conversion.  Except as provided in Section 5.12(i) and in this Section   5.12(f), the Class B Convertible Units are not convertible into Common   Units.  The Partnership shall,   pursuant to the Unit Purchase Agreement, take such actions as may be   necessary or appropriate to submit to a vote or consent of the Unitholders   (other than holders of Class B Convertible Units) the approval of a change in   the terms of the Class B Convertible Units to provide that each Class B   Convertible Unit shall automatically convert into one Common Unit (subject to   appropriate adjustment in the event of any split-up, combination or similar   event affecting the Common Units that occurs prior to the conversion of the   Class B Convertible Units) effective immediately upon receipt of such   approval from such
Unitholders (the “Conversion Approval”) without any   further action by the holders thereof.    The vote or consent required for the Conversion Approval will be the   requisite vote required under the rules or staff interpretations of the   National Securities Exchange on which the Common Units are listed or admitted   for trading, provided, the issuance of Common Units upon conversion of Class   B Convertible Units must comply with Section 5.7(a) of this Agreement.  Upon receipt of the Conversion Approval   and compliance with Section 5.12(h), the terms of the Class B Convertible   Units will be changed, automatically and without further action, so that each   Class B Convertible Unit is converted into one Common Unit and, immediately   thereafter, none of the Class B Convertible Units shall be Outstanding.  The date that Conversion Approval is   obtained is herein referred to as the “Conversion Approval Date.”
  



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                   (g)     Automatic Provisions.  If the Conversion Effective Date has not occurred   within 180 days following the date of issuance of the Class B Convertible   Units, then, effective as of the next succeeding day (the “Class B   Distribution Increase Date”) until the Conversion Effective Date, Section   5.12(b) will be deemed to be amended in its entirety, automatically and   without further action, as follows:
  





	
  
 
  	
  
                      (b)     Rights of Class B Convertible Units.  Prior to the Conversion   Effective Date (or the later date specified in this Section 5.12(b)):
  





	
   
  	
  
                            (i)     Allocations.  Except as otherwise provided in this Agreement, all items of   Partnership income, gain, loss, deduction and credit shall be allocated to   the Class B Convertible Units to the same extent as such items would be so   allocated if such Class B Convertible Units were Common Units (other than   Privately Placed Common Units) that were then Outstanding.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                            (ii)    Distributions from Basic Surplus During   Subordination Periods.    Notwithstanding anything to the contrary in Section 6.4(a),   Unitholders holding Class B Convertible Units shall receive distributions per   Unit pursuant to Section 6.4(a) equal to 115% of the distribution per Unit   received by Unitholders holding Common Units pursuant to Section 6.4(a);   provided that
  





	
  
 
  	
  
                                 (A)     Unitholders   holding Class B Convertible Units shall not receive any distribution pursuant   to Section 6.4(a)(i) or Section 6.4(a)(ii); and
  
	
   
  	
  
 
  
	
  
 
  	
  
                                 (B)     following   any distribution pursuant to Section 6.4(a)(ii) and prior to any distribution   pursuant to Section 6.4(a)(iii), Available Cash shall be distributed (x) 98%   to the Unitholders holding Class B Convertible Units, Pro Rata, and 2% to the   General Partner, until there has been distributed in respect of each Class B   Convertible Unit then Outstanding an amount equal to 115% of the Minimum   Quarterly Distribution for such Quarter (provided, further, that the portion   of such distribution attributable to the additional 15% above the Minimum   Quarterly Distribution shall be pro rated in the Quarter in which the Class B   Distribution Increase Date occurs); and (y) then, 98% to the Unitholders   holding Class B Convertible
Units, Pro Rata, and 2% to the General Partner,   until there has been distributed in respect of each Class B Convertible Unit   then Outstanding an amount equal to the Cumulative Class B Convertible Unit   Arrearage, if any, existing with respect to such Quarter.
  





	
  
 
  	
  
                            (iii)   Distributions from Basic Surplus After   Subordination Periods.    Notwithstanding anything to the contrary in Section 6.4(b),   Unitholders holding Class B Convertible Units shall receive distributions per   Unit pursuant to Section 6.4(b) equal to 115% of the distribution per Unit   received by other Unitholders pursuant to Section 6.4(b); provided, that:
  



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                                 (A)     Unitholders   holding Class B Convertible Units shall not receive any distributions   pursuant to Section 6.4(b)(i); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                 (B)     following   any distribution pursuant to Section 6.4(b)(i) (subject to Section   5.12(b)(iii)(A)) and prior to any distribution pursuant to Section   6.4(b)(ii), Available Cash shall be distributed 98% to the Unitholders   holding Class B Convertible Units, Pro Rata, and 2% to the General Partner,   until there has been distributed in respect of each Class B Convertible Unit   then Outstanding an amount equal to 115% of the Minimum Quarterly   Distribution for such Quarter.
  





	
   
  	
  
                            (iv)    Allocation of Net Termination Gain to Class B   Convertible Unitholders.    Notwithstanding anything to the contrary in Section 6.1(c)(i),   Unitholders holding Class B Convertible Units shall be allocated Net   Termination Gain in accordance with Section 6.1(c)(i); provided, that,
  





	
  
 
  	
  
                                 (A)     Unitholders   holding Class B Convertible Units shall not receive any allocation pursuant   to Section 6.1(c)(i)(B) or Section 6.1(c)(1)(C);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                 (B)     following   any allocation made pursuant to Section 6.1(c)(i)(B) and prior to any   allocation made pursuant to Section 6.1(c)(i)(C), any remaining Net   Termination Gain shall be allocated 98% to all Unitholders holding Class B   Convertible Units, Pro Rata, and 2% to the General Partner, until the Capital   Account in respect of each Class B Convertible Unit then Outstanding is equal   to the sum of (1) its Unrecovered Capital, determined for the taxable year   (or portion thereof) to which this allocation of gain relates, plus (2) 115%   of the Minimum Quarterly Distribution for the Quarter during which the   Liquidation Date occurs, reduced by any distribution pursuant to Section   5.12(b)(ii)(B)(x) with respect to such Class B
Convertible Unit for such   Quarter, plus (3) any then existing Cumulative Class B Convertible Unit   Arrearage; and
  
	
   
  	
  
 
  
	
  
 
  	
  
                                 (C)     the   amount allocated to Unitholders holding Class B Convertible Units pursuant to   Section 6.1(c)(1)(D), Section 6.1(c)(1)(E), Section 6.1(c)(1)(F) and Section   6.1(c)(1)(G) shall be the amount required to make the Per Unit Capital Amount   of each Class B Convertible Unit equal to 115% of the Per Unit Capital Amount   of a Common Unit.
  





	
  
 
  	
  
                            (v)     Allocation of Net Termination Loss to Class B   Convertible Unitholders.    Notwithstanding anything to the contrary in Section 6.1(c)(ii), with   respect to allocations made in accordance with Section 6.1(c)(ii),   Unitholders holding Class B Convertible Units shall be allocated Net Termination   Loss in accordance with Section 6.1(c)(ii)(B) in the same manner as   Unitholders holding Common Units.
  




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                            (vi)    Elimination of Cumulative Class B Convertible Unit   Arrearages Upon Conversion; Excess Payments.  If the Conversion Effective Date occurs   after the Class B Distribution Increase Date, on the Conversion Effective   Date (or the later date specified in Section 5.12(b)(vi)(B) below):
  





	
  
 
  	
  
                                  (A)     if   a Cumulative Class B Convertible Unit Arrearage exists on the Conversion   Effective Date, Available Cash shall be distributed 98% to the Unitholders   holding Class B Convertible Units, Pro Rata, and 2% to the General Partner,   until there has been distributed in respect of each Class B Convertible Unit   then Outstanding an amount equal to the Cumulative Class B Convertible Unit   Arrearage as of the Conversion Effective Date.  This distribution shall not be deemed a distribution on a   Common Unit, but the satisfaction of prior entitlements of the holders of   Class B Convertible Units as of the Conversion Effective Date.  For the taxable year in which such   distribution is made, if not previously allocated,
each Person receiving such   cash distribution shall be allocated items of gross income in an amount equal   to such distribution as provided in Section 6.1(d)(iii)(A); and
  
	
   
  	
  
 
  
	
  
 
  	
  
                                  (B)     for   the Quarter in which such conversion occurs, concurrently with the   distribution of Available Cash in respect of such Quarter in accordance with   Section 6.4 hereof (subject to this Section 5.12), a distribution shall be   paid to each holder of record of Class B Convertible Units as of the   Conversion Effective Date, with the amount of such distribution for each such   Class B Convertible Unit to be equal to the product of (a) 15% of the amount   to be distributed in respect of such Quarter to each Common Unit times (b) a   fraction, of which (I) the numerator is the number of days in such Quarter up   to but excluding the Conversion Effective Date and (II) the denominator is   the total number of days in such Quarter
(such amount, the “Excess   Payment”).  For the taxable year in   which an Excess Payment is made, if not previously allocated, each holder of   a Class B Convertible Unit shall be allocated items of gross income in an   amount equal to the Excess Payment distributed to it as provided in Section   6.1(d)(iii)(A).  For the avoidance of   doubt, each Common Unit issued upon conversion of a Class B Convertible Unit   shall be entitled to receive the full distribution payable to the holder of a   Common Unit concurrently with the distribution of such Excess Payment.
  





	
  
 
  	
  
                   (h)     Surrender of Certificates.  Upon receipt of the Conversion   Approval in accordance with Section 5.12(f) or a change in rules of the   National Securities Exchange as described in Section 5.12(i), the General   Partner shall give the holders of the Class B Convertible Units prompt notice   of such Conversion Approval or change in rules and, subject to the   requirements of Section 6.7(c), each holder of Class B Convertible Units   shall promptly surrender the Class B Convertible Unit Certificates therefor,   duly endorsed, at the office of the General Partner or of any transfer agent   for the Class B Convertible Units.  In   the case of any such conversion, the Partnership shall, as soon as   practicable thereafter, issue and deliver at such office to such holder of   Class B Convertible Units one or
more Common Unit Certificates, registered in   the name of such 
  



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holder, for   the number of Common Units to which such holder shall be entitled.  Such conversion shall be deemed to have   been made as of the Conversion Approval Date or, in the case of Section   5.12(i), the date of the effectiveness of such rule change (the “Conversion   Effective Date”), and the Person entitled to receive the Common Units   issuable upon such conversion shall be treated for all purposes as the record   holder of such Common Units as of such date.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                   (i)     Change in Rules of National Securities Exchange.  If at any time (i) the rules of the   National Securities Exchange on which the Common Units are listed or admitted   to trading or the staff interpretations of such rules are changed or (ii)   facts or circumstances arise so that no vote or consent of Unitholders is   required as a condition to the listing or admission to trading of the Common   Units that would be issued upon any conversion of any Class B Convertible   Units into Common Units as provided in Section 5.12(f), the terms of such   Class B Convertible Units will be changed so that each Class B Convertible   Unit is converted (without further action or any vote of any Unitholders   other than compliance with Section 5.12(h)) into one Common Unit and,   immediately thereafter, none of the Class B
Convertible Units shall be   Outstanding.
  



          10.          Section 6.1(d)(iii)(A) of the partnership Agreement is hereby amended to read in its entirety:

	
  
 
  	
  
          (A)     If   the amount of cash or the Net Agreed Value of any property distributed   (except cash or property distributed or deemed distributed pursuant to   Section 5.5(a), with respect to Class B Convertible Units or Privately Placed   Common Units, or Section 12.4) to any Unitholder with respect to its Units   for a taxable year is greater (on a per Unit basis) than the amount of cash   or the Net Agreed Value of property distributed to the other Unitholders with   respect to their Units (on a per Unit basis), then (1) each Unitholder   receiving such greater cash or property distribution shall be allocated gross   income in an amount equal to the product of (aa) the amount by which the   distribution (on a per Unit basis) to such Unitholder exceeds the   distribution (on a per Unit basis) to the Unitholders receiving the smallest   distribution and (bb) the number of Units
owned by the Unitholder receiving   the greater distribution; and (2) the General Partner shall be allocated   gross income in an aggregate amount equal to 2/98ths of the sum of the   amounts allocated in clause (1) above.
  




          11.          Article VI is hereby amended to add a new Section 6.1(d)(xiii) as follows:

	
   
  	
  
                    “(xiii)     Allocations for Class B Convertible Units and   Privately Placed Common Units.
  





	
  
 
  	
  
                (A)     With   respect to any taxable period of the Partnership ending upon, or after, a   Book-Up Event or Book-Down Event occurring after the date of issuance of the   Class B Convertible Units and the Privately Placed Common Units, Partnership   items of income or gain for such taxable period shall be allocated 100% (1)   to the Partners holding Privately Placed Common
  




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Units in   proportion to the number of Privately Placed Common Units held by such Partners,   until each such Partner has been allocated the amount that increases the   Capital Account of such Privately Placed Common Unit to the Per Unit Capital   Amount for an outstanding Common Unit (other than a Privately Placed Common   Unit) and (2) to the Partners holding Class B Convertible Units or converted   Class B Convertible Units that are Outstanding as of the time of such   conversion in proportion to the number of Class B Convertible Units or   converted Class B Convertible Units held by such Partners, until each such   Partner has been allocated the amount that increases the Capital Account of   such Class B Convertible Unit or converted Class B Convertible Unit to the   Per Unit Capital Amount for a then outstanding Common Unit.
  
	
   
  	
  
 
  
	
  
 
  	
  
                (B)     With   respect to any taxable period of the Partnership ending upon, or after, the   transfer of Privately Placed Common Units or converted Class B Convertible   Units to a Person that is not an Affiliate of the holder, Partnership items   of income or gain for such taxable period shall be allocated 100% (1) to the   Partners transferring such Privately Placed Common Units in proportion to the   number of Privately Placed Common Units transferred by such Partners, until   each such Partner has been allocated the amount that increases the Capital   Account of such Privately Placed Common Unit to the Per Unit Capital Amount   for a then outstanding Common Unit (other than a Privately Placed Common   Unit) and then (2) to the Partners transferring such converted Class B   Convertible Units in proportion to the number of converted Class B
Convertible Units transferred by such Partners, until each such Partner has   been allocated the amount that increases the Capital Account of such   converted Class B Convertible Unit to the Per Unit Capital Amount for a then   outstanding Common Unit.
  




          12.          Section 6.5 is hereby amended to add the following as a new penultimate sentence:

	
  
 
  	
  
               Available   Cash that is deemed to be Capital Surplus shall then be distributed 98% to all   Unitholders holding Class B Convertible Units, Pro Rata, and 2% to the   General Partner, until there has been distributed in respect of each Class B   Convertible Unit then Outstanding an amount equal to the Cumulative Class B   Convertible Unit Arrearage.
  



          13.          Section 6.6(a) of the Partnership Agreement is hereby amended to amend and restate the first sentence thereof as follows: 

	
  
 
  	
  
               The   Minimum Quarterly Distribution, First Target Distribution, Second Target   Distribution, Third Target Distribution, Common Unit Arrearages, Cumulative   Common Unit Arrearages, Class B Convertible Unit Arrearages and Cumulative   Class B Convertible Unit Arrearages shall be proportionately adjusted in the   event of any distribution, combination or subdivision (whether effected by a   distribution payable in Units or otherwise) of Units or other Partnership   Securities in accordance with Section 5.10.
  




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          14.          Article VI is hereby amended to add a new Section 6.7(c) as follows:

	
  
 
  	
  
          (c)     A   Unitholder holding (1) a Privately Placed Common Unit or (2) a Class B   Convertible Unit that has converted into a Common Unit pursuant to Section   5.12 shall be required to provide notice to the General Partner of the transfer   of the Privately Placed Common Unit or converted Class B Convertible Unit   within the earlier of (i) 30 days following such transfer or (ii) the last   Business Day of the calendar year during which such transfer occurred, unless   (x) the transfer is to an Affiliate of the holder or (y) by virtue of the   application of Section 6.1(d)(xiii)(B) to a prior transfer of the Unit or the   application of Section 6.1(d)(xiii)(A), the General Partner has previously   determined, based on advice of counsel, that the Privately Placed Common Unit   or converted Class B Convertible Unit should have, as a substantive matter,   like intrinsic economic
and federal income tax characteristics of an Initial   Common Unit.  In connection with the   condition imposed by this Section 6.7(c), the General Partner shall take   whatever steps are required to provide economic uniformity to the Privately   Placed Common Units and converted Class B Convertible Units in preparation   for a transfer of such Units, including the application of Section 6.1(d)(xiii)(B);   provided, however, that no such   steps may be taken that would have a material adverse effect on the   Unitholders holding Common Units represented by Common Unit Certificates.
  



          15.          Except as hereby amended, the Agreement shall remain in full force and effect.


          16.          This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.


          17.          Each provision of this Amendment shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal.


          IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

	
  
 
  	
  
GENERAL   PARTNER:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
US Shipping   General Partner LLC
  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
   
  
	
   
  	
  By:
  	
  /s/ Paul B.   Gridley
  
	
   
  	
   
  	
  


  
	
   
  	
   
  	
  Paul B.   Gridley
  
	
   
  	
   
  	
  Chairman and   Chief Executive Officer
  



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