Document:

Exhibit
4.1.2

 

 

SUPPLEMENTAL INDENTURE NO. 1

 

                THIS
SUPPLEMENTAL INDENTURE NO. 1, dated as of December ___, 2003 (this
“Supplement”), among JPMORGAN CHASE BANK, a New York banking corporation (the
“Indenture Trustee”), K-SEA TRANSPORTATION PARTNERS L.P., a Delaware limited
partnership (“K-Sea LP”), and K-SEA OPERATING PARTNERSHIP L.P., a Delaware
limited partnership (“K-Sea OLP”).

 

 

RECITALS

 

                WHEREAS:

 

                A.            K-Sea
Transportation LLC, a Delaware limited liability company (“K-Sea LLC”), EW
Holding Corp., a New York corporation (“EW Holding”), and the Indenture Trustee
are parties to that certain Trust Indenture, dated as of June 7, 2002 (the
“Indenture”);

 

                B.            As set forth in the Recital to the
Indenture, K-Sea LLC and EW Holding have previously authorized the issuance of
obligations designated “United States Government Guaranteed Ship Financing
Obligations, K-Sea Series 2002-1, 2002-2, 2002-3 and 2002-4” (the “Original
Obligations”) in an aggregate principal amount of Forty Million Four Hundred
Forty-One Thousand United States Dollars ($40,441,000) (generally referred to
as the “Title XI Financing”), guaranteed by the United States of America (the
“United States”), represented by the Secretary of Transportation, acting by and
through the Maritime Administrator (the “Secretary”), to finance a portion of
the cost of construction of DBL 101 (O.N. 1119760), DBL 81 (O.N. 1132231), DBL
82 (O.N. 1137538), and Hull No. 422, to be known as DBL 102 (the “Vessels” and
each, a “Vessel”);

 

                C.            With
the Secretary’s consent and in connection with the initial public offering of
common units representing limited partner interests in K-Sea LP on the date
hereof and all transactions and agreements contemplated or incidental thereto,
including the execution of the Contribution, Conveyance and Assumption
Agreement dated as of the date hereof (the “Contribution Agreement”) by and
among K-Sea LLC, EW Holding, K-Sea Acquisition Corp., a Delaware corporation
(“K-Sea Acquisition”), and K-Sea Transportation Corp., a New York corporation
(“K-Sea Transportation”, and collectively with K-Sea LLC, EW Holding, and K-Sea
Acquisition, the “Original K-Sea Entities”), K-Sea Investors L.P., a Delaware
limited partnership, K-Sea LP and K-Sea OLP and the performance of the terms
and transactions set forth in the Contribution Agreement (collectively, the
“MLP 

 

 

Transaction”), by
assumption, merger and operation of law K-Sea LP and K-Sea OLP simultaneously
herewith have succeeded to substantially all of the interests and obligations
of the Original K-Sea Entities, including, without limitation, the Original
Obligations, the documents and instruments referenced in the Secretary’s action
dated December __, 2003 by the Secretary with respect to the MLP Transaction
(the “Secretary’s Consent”), and the Vessels;

 

                D.             In accordance with the terms of
Section 10.01 of the Indenture, the parties hereto wish to effect the execution
and delivery of this Supplement and the surrender and cancellation of the
Original Obligations in exchange for new Obligations for which K-Sea LP and
K-Sea OLP are the obligors (the “Obligations”); and

 

                E.             The Indenture Trustee, K-Sea LP and
K-Sea OLP wish to amend and supplement the Indenture in order to reflect the
transactions described above and to obtain the consent of the United States,
acting by and through the Secretary (as required by the terms of Article X of
the Indenture) to such transactions.

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, and of other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

 

ARTICLE I.           Assumption
and Consent

 

                SECTION 1.  Assumption
of Indenture.  In accordance with
the terms of Articles VIII and X of the Indenture, each of K-Sea LP and K-Sea
OLP, jointly and severally, hereby expressly assumes all of the respective
former, present and future obligations, duties, right, title and interest of
K-Sea LLC and EW Holding in and to the Indenture, as amended and supplemented hereby,
together with all documents and instruments evidencing any such obligations,
duties, right, title and interest thereto, and each of K-Sea LP and K-Sea OLP
expressly agrees, jointly and severally, specifically to perform all of the
respective agreements and obligations of K-Sea LLC and EW Holding under the
Indenture, as amended and supplemented hereby. 
For the avoidance of doubt, pursuant to Section 8.01(a)(1) of the
Indenture, each of K-Sea LP and K-Sea OLP expressly assumes and agrees to
perform all of the obligations of K-Sea LLC and EW Holding with respect to the
payment of the principal and interest (and premiums, if any) of the Outstanding
Obligations, as determined by the Secretary and set forth below, relating to
the Vessels and expressly assumes the duties of K-Sea LLC and EW Holding under
the Indenture.

 

                SECTION 2.  Secretary’s
Consent.  The United States, acting
through the Secretary, (i) having by the Secretary’s Consent acknowledged,
consented and 

 

 

2

 

agreed to the MLP
Transaction, (ii) having by the Secretary’s Consent acknowledged, consented and
agreed that K-Sea LP and K-Sea OLP and their direct and indirect subsidiaries,
together with each of the Original K-Sea Entities, may enter into such
documents, agreements or instruments that are reasonably related to the MLP
Transaction, and (iii) having granted all consents necessary to be obtained
under the Title XI Financing, including without limitation, the Secretary’s
consent as required under Section 10.05 of the Indenture, hereby (a) releases
each of K-Sea LLC and EW Holding from the Indenture, and (b) agrees that from
and after the date hereof the Indenture shall be supplemented in all respects
by this Supplement.

 

 

ARTICLE
II.         Cancellation and Reissuance of Obligations

 

                SECTION
1.  Discharge, Release,
Surrender and Cancellation of Original Obligations.  In accordance with the terms of Section
8.01(b) of the Indenture, the parties hereto expressly discharge and release
K-Sea LLC and EW Holding from any and all obligations relating to the Original
Obligations.  Concurrently with the
insurance and delivery of the Obligations pursuant to Section 2 below, the
Indenture Trustee shall cancel the Original Obligations issued by K-Sea LLC and
EW Holding and currently held by the Indenture Trustee for the benefit of the
Obligees.

 

                SECTION
2.  Issuance of
Obligations.

 

(a)           As
set forth in the Secretary’s Consent and in accordance with Section 8.01 of the
Indenture, concurrently with the execution and delivery of this Supplement each
of K-Sea LP and K-Sea OLP shall, jointly and severally, in exchange for the
Original Obligations, execute and issue Obligations of the same Series, in the
same principal amounts and payable to the same Person(s) as the Original
Obligations.  As set forth in the
Secretary’s Consent and in accordance with Article I of the Authorization
Agreement, the Indenture Trustee shall (1) cause the Guarantees of the
Secretary, the facsimile signature of the
Maritime Administrator or the Acting Maritime Administrator, and the facsimile
seal of the U.S. Department of Transportation to be imprinted upon each of the
Obligations issued in accordance with the terms hereof and Article II and
Article III of the Indenture, and (2) authenticate and deliver such
Obligations, in exchange for the Original Obligations surrendered and
cancelled, in the name of the successor partnerships, K-Sea LP and K-Sea OLP,
jointly and severally.

 

ARTICLE
III.        Amendments

 

                The
Indenture hereby is amended as follows:

 

 

3

 

 

SECTION 1.  Rules
of Interpretation and Definitions.

(a)           For
all purposes of this Supplement and the Indenture as supplemented hereby,
unless otherwise expressly provided or unless the context otherwise requires,
the terms used herein and defined in Schedule A to this Supplement or by
reference therein to other instruments shall have the respective meanings
stated in said Schedule A or such other instruments.

(b)           All
references to the Indenture contained in any documents delivered under or
pursuant to the Indenture, including without limitation Schedule A to the
Indenture, shall be construed as references to the Indenture as supplemented
and amended by the terms of this Supplement, as it may be further amended,
modified or supplemented from time to time.

                (c)           All
references in the General Provisions to the Indenture to “Shipowner”,
“Shipowner’s”, “EW Holding” or “K-Sea” shall be deemed to mean K-Sea LP and
K-Sea OLP, jointly and severally, as joint and several successors in interest
by merger and operation of law to K-Sea LLC and EW Holding, provided, however,
where the context refers to the Shipowner solely in its capacity as shipowner
of any Vessel, such reference shall be deemed to mean and refer to K-Sea OLP
alone.

                SECTION 2.  Representations
and Warranties.  K-Sea LP and K-Sea
OLP make the representations and warranties made by K-Sea LLC and EW Holding
set forth in the Indenture.

                SECTION
3.  Additions, Deletions
and Amendments to the General Provisions of the Indenture.

 

                The
following additions, deletions and amendments are hereby made to Exhibit 1 to
the Indenture:

 

(a)           Concerning Notices.  Subject to the provisions of Section 13.01
of Exhibit 1 to the Indenture, any notice, request, demand, direction, consent,
waiver, approval or other communication to be given to a party hereto or the
Secretary shall be deemed to have been sufficiently given or made when
addressed to:

The Indenture Trustee as:

JPMorgan Chase Bank

4 New York Plaza, 15th Floor

New York, New York 10004

Attention: Institutional Trust Services

 

 

4

 

 

K-Sea LP and K-Sea OLP as:

K-Sea Transportation Partners L.P.

K-Sea Operating Partnership L.P.

Attn.: Chief Financial Officer

3245 Richmond Terrace

Staten Island, NY 10303

The Secretary as:

SECRETARY OF TRANSPORTATION

c/o Maritime Administrator

Department of Transportation 

400 Seventh Street, SW

Washington, D.C. 20590

                (b)           Concerning Schedule A.  Schedule A to the Indenture is hereby amended
by deleting it in its entirety and substituting the attached Schedule A
therefor.

 

ARTICLE
IV.        Miscellaneous

 

SECTION
1.  Rules of Interpretation and Definitions. 
For all purposes of this Supplement, unless otherwise expressly provided
or unless the context otherwise requires, all references herein to Articles,
Sections or other subdivisions, unless otherwise specified, refer to the
corresponding Articles, Sections and other subdivisions of the Indenture.  Unless otherwise expressly provided herein,
all capitalized terms used herein shall have the meaning specified thereto in
the attached Schedule A.

SECTION
2.  Concerning Parties.  K-Sea LP and K-Sea OLP are hereby made
parties to the Indenture for all purposes of the obligations, duties, right,
title and interest set forth therein with the same effect as if K-Sea LP and
K-Sea OLP had been named therein.

SECTION
3.  Continuation in Effect.  Except as added, deleted or amended by this
Supplement, all of the provisions of the Indenture shall otherwise remain in
full force and effect.

SECTION
4.  GOVERNING LAW.  THIS SUPPLEMENT AND EACH OBLIGATION SHALL BE
CONSTRUED, ENFORCED, AND GOVERNED BY THE LAWS OF THE UNITED STATES OF AMERICA,
BUT TO THE EXTENT THEY ARE INAPPLICABLE, THEN BY THE LAWS OF THE STATE OF NEW
YORK OF THE UNITED STATES OF AMERICA WITHOUT REGARD TO ITS 

 

5

 

CONFLICT
OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

SECTION
5.  Execution of Counterparts.  This Supplement may be executed in any
number of counterparts.  All such
counterparts shall be deemed to be originals, and shall constitute but one and
the same instrument.

SECTION
6.  Trustee Not Responsible.  The Indenture Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplement or for or in respect of the recitals contained
herein, all of which are made solely by K-Sea LP and K-Sea OLP.

 

[signatures
on next page]

 

6

 

 

IN WITNESS WHEREOF, this Supplemental Indenture No. 1 has been executed
by the parties hereto as of the day and year first above written.

 

 

	
   

  	
  K-SEA TRANSPORTATION PARTNERS L.P., by its 

  
	
   

  	
  general partner K-Sea General Partner L.P., by its
  general

  
	
   

  	
  partner K-Sea General Partner GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P., by its general

  
	
   

  	
  partner K-Sea OLP GP, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as Indenture Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

 

 

 

 

CONSENTED AND AGREED TO BY:

 

UNITED STATES OF AMERICA,

Secretary of Transportation

Maritime Administrator

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
  Maritime AdministrationExhibit
10.4.2

 

 

Contract No.
MA-13779

 

AMENDMENT NO. 1 TO

COMMITMENT TO GUARANTEE OBLIGATIONS

 

                THIS AMENDMENT NO.
1 TO COMMITMENT TO GUARANTEE OBLIGATIONS, dated as of December ___, 2003 (this
“Amendment”) made and entered into by the UNITED STATES OF AMERICA (the “United
States”), represented by the SECRETARY OF TRANSPORTATION, acting by and through
the MARITIME ADMINISTRATOR (the “Secretary”), and accepted on said date by
K-SEA TRANSPORTATION PARTNERS L.P., a Delaware limited partnership (“K-Sea
LP” or “Parent Company”), and K-SEA OPERATING PARTNERSHIP L.P., a Delaware
limited partnership (“K-Sea OLP” or the “Shipowner”).  Except to the extent otherwise expressly
defined herein, capitalized terms have the meanings set forth in Schedule X to
the Restated Security Agreement, Contract No. MA-13781 (the “Restated Security
Agreement”), dated as of the date hereof, by and among     K-Sea LP, K-Sea OLP and the Secretary.

 

RECITALS:

WHEREAS:

 

A.            K-Sea
Transportation LLC, a Delaware limited liability company (“K-Sea LLC”),
and EW Holding Corp., a New York corporation (“EW Holding”), are parties to
that certain Commitment to Guarantee Obligations, Contract No. MA-13779, dated
June 7, 2003 (the “Guarantee Commitment”), made and entered into by the United
States, acting by and through the Secretary, and accepted on said date by K-Sea
LLC and EW Holding;

 

                B.            K-Sea LLC and EW Holding authorized
the issuance of, and executed and delivered, obligations designated “United
States Government Guaranteed Ship Financing Obligations, K-Sea Series 2002-1,
2002-2, 2002-3 and 2002-4” in an aggregate principal amount of Forty Million
Four Hundred Forty-One Thousand United States Dollars ($40,441,000) (generally
referred to as the “Title XI Financing”) to finance a portion of the cost of
construction of DBL 101, O.N. 1119760 (“DBL 101”), DBL 81, O.N. 1132231 (“DBL
81”), DBL 82, O.N. 1137538 (“DBL 82”), and Hull No. 422, to be known as DBL 102
(collectively with DBL 101, DBL 81 and DBL 82, the “Vessels”, and each, a
“Vessel”);

 

 

 

 

                C.            The Shipyard delivered DBL 101 to EW
Holding on July 23, 2002, and DBL 101 has been documented in the name of EW
Holding under the laws of the United States; the Shipyard delivered DBL 81 to
K-Sea LLC on February 5, 2003, and DBL 81 has been documented in the name of
K-Sea LLC under the laws of the United States; the Shipyard delivered DBL 82 to
K-Sea LLC on June 27, 2003, and DBL 82 has been documented in the name of K-Sea
LLC under the laws of the United States (DBL 101, DBL 81 and DBL 82 are herein
referred to as the “Delivered Vessels”). 
Contemporaneously with its respective delivery by the Shipyard, each
Delivered Vessel was chartered to K-Sea Transportation Corp., a New York
corporation (“K-Sea Transportation”), pursuant to a bareboat charter
approved by the Secretary;

 

                D.            The Shipyard has under construction
Hull No. 422, to be known as DBL 102 (the “Remaining Vessel”), expected to be
delivered to K-Sea OLP on or about January 2004, and upon delivery, the
Remaining Vessel will be documented in the name of K-Sea OLP, as Shipowner,
under the laws of the United States;

 

                E.             With
the Secretary’s consent and in connection with the initial public offering of
common units representing limited partner interests in K-Sea LP on the date
hereof and all transactions and agreements contemplated or incidental thereto,
including the execution of the Contribution, Conveyance and Assumption
Agreement dated as of the December __, 2003 (the “Contribution Agreement”) by
and among K-Sea LLC, EW Holding, K-Sea Acquisition Corp., a Delaware
corporation, and K-Sea Transportation (collectively, the “Original K-Sea
Entities”), K-Sea Investors L.P., a Delaware limited partnership, K-Sea LP and
K-Sea OLP and the performance of the terms and transactions set forth in the
Contribution Agreement (collectively, the “MLP Transaction”), by assumption,
merger and operation of law K-Sea LP and K-Sea OLP simultaneously herewith have
succeeded to substantially all of the interests and obligations of the Original
K-Sea Entities including, without limitation, the Obligations, the documents
and instruments referenced in the Secretary’s action dated December ___, 2003
by the Secretary with respect to the MLP Transaction (the “Secretary’s
Consent”), and the Vessels;

 

 

F.             The
transfer of title to the Delivered Vessels is subject to the existing first
preferred mortgage liens in favor of the Secretary, and such liens will be
assumed and restated by K-Sea OLP in accordance with the Assumption of
Mortgage, Security Agreement and Secretary’s Note (OLP DBL 101), the Assumption
of Mortgage, Security Agreement and Secretary’s Note (OLP DBL 81, DBL 82) and
the Mortgage.  The transfer to K-Sea OLP
of any other security in favor of the Secretary is subject to the existing
first priority security interest in favor of the Secretary;

 

G.            As
set forth in the Secretary’s Consent, each of K-Sea LP and K-Sea OLP, jointly
and severally, specifically is assuming all of the respective rights and

 

 

2

 

obligations of each of the Original K-Sea Entities with respect to the
Title XI Financing;

 

                H.            Pursuant to the Guarantee
Commitment, the United States, acting by and through the Secretary, guaranteed
certain amounts specified in the Guarantee Commitment in connection with the
Title XI Financing; and

 

                I.              The parties hereto desire to amend
the Guarantee Commitment and, in the case of K-Sea LP and K-Sea OLP, to obtain
the consent of the Secretary, as required by Section VI of the Guarantee
Commitment.

 

 

                NOW THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and of other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

 

ARTICLE I.           Assumption
and Consent

 

                SECTION 1. 
Assumption of Guarantee Commitment.  Pursuant to Articles V and VI of the Guarantee Commitment, K-Sea
LP and K-Sea OLP, jointly and severally, hereby expressly assume all of the
respective former, present and future obligations, duties, right, title and
interest of the Original K-Sea Entities in and to the Title XI Financing,
together with all documents and instruments evidencing any such obligations,
duties, right, title and interest thereto, and K-Sea LP and K-Sea OLP expressly
agree, jointly and severally, specifically to perform all of the respective
agreements and obligations of K-Sea LLC and EW Holding under the Guarantee
Commitment as amended hereby.

 

                SECTION 2.  Secretary’s Consent.  The United States, acting through the
Secretary (i) having by the Secretary’s Consent acknowledged, consented and
agreed to the MLP Transaction; (ii) having by the Secretary’s Consent
acknowledged, consented and agreed that K-Sea LP, K-Sea OLP and their direct
and indirect subsidiaries, together with each of the Original K-Sea Entities,
may enter into such documents or agreements that are reasonably related to the
MLP Transaction; and (iii) having granted all consents necessary to be obtained
under the Title XI Financing, including without limitation, its consent and
approval as required under Articles V and VI of the Guarantee Commitment,
hereby (a) releases K-Sea LLC and EW Holding from the Guarantee Commitment, and
(b) agrees that from and after the date hereof, the Guarantee Commitment shall
be assumed by K-Sea LP and K-Sea OLP and amended by this Amendment.

 

3

 

 

ARTICLE
II.         Amendments to Guarantee Commitment

 

                SECTION 1.  Rules of Interpretation and Definitions.  As of, and with effect from, the date hereof
(the “MLP Closing Date”), the Guarantee Commitment is amended as follows:

 

                (a)
          the expressions “the Guarantee
Commitment”, “this Guarantee Commitment”, “hereof” and “hereunder” shall be
construed, wherever they appear in the Guarantee Commitment and wherever the
context so permits, to mean the Guarantee Commitment as amended by this
Amendment;

 

                (i)
           the expressions “EW Holding”
and “K-Sea” shall be construed, wherever either appears in the Guarantee
Commitment, to mean collectively K-Sea LP and K-Sea OLP, jointly and severally
as joint and several successors in interest to K-Sea LLC and EW Holding
provided, however, where the context refers either to K-Sea LLC or EW Holding
solely in its capacity as a shipowner, such reference shall be deemed to mean
and refer to K-Sea OLP alone; and

 

                (ii)
          the expressions “the Shipowners”
or “any Shipowner” shall be construed, wherever it appears in the Guarantee
Commitment, to mean K-Sea OLP, as Shipowner and as successor in interest to
K-Sea LLC and EW Holding in such capacity.

 

                (b)           With effect from the date hereof, all
references to the Guarantee Commitment contained in any documents delivered
under or pursuant to the Guarantee Commitment shall be construed as references
to the Guarantee Commitment as amended by the terms of this Amendment and as it
may be further amended, modified or supplemented from time to time.

 

 

ARTICLE
III.        Conditions to Execution and Delivery of this Amendment

 

                The
obligation of the Secretary to execute and deliver this Amendment is subject to
the following conditions having been met or being met simultaneously herewith
on the date hereof, unless waived in writing by the Secretary:

 

(a)           The
MLP Transaction as described in the Secretary’s Consent shall have closed or
shall close simultaneously with this Amendment and the proceeds thereof shall
have been paid to or shall be paid simultaneously with this Amendment to the
order of K-Sea LP;

 

(b)           Each
of the Original K-Sea Entities, if necessary, and K-Sea LP and K-Sea OLP shall
have entered into documentation providing for the assumptions, mergers and
operations of law as set forth in the Secretary’s Consent;

 

4

 

(c)           K-Sea
OLP shall have executed and delivered to the Secretary the Assumption of
Construction Contract, subject to the first priority security interest of the
Secretary, and the Shipyard shall have executed the Consent of Shipyard;

 

                (d)           The Original K-Sea Entities, K-Sea
LP, K-Sea OLP and the Secretary, as required, shall have executed and delivered
the following documents, each document or instrument being in form and
substance satisfactory to each of the Original K-Sea Entities, K-Sea LP, K-Sea
OLP and the Secretary, and if a party thereto, the Indenture Trustee and the
Depository:

 

(i)                                     Restated Security Agreement, including
Schedule X definitions;

 

(ii)                                  Restated Title XI Reserve Fund and
Financial Agreement;

 

(iii)                               Supplemental Indenture No. 1, including
Schedule A definitions;

 

(iv)                              Assumption of Secretary’s Note;

 

(v)                                 Obligations;

 

(vi)                              Assumption of Mortgage, Security
Agreement and Secretary’s Note (OLP DBL 101); Assumption of Mortgage, Security
Agreement and Secretary’s Note (OLP DBL 81, DBL 82);

 

(vii)                           Restated First Preferred Fleet Mortgage
(the “Mortgage”) from K-Sea OLP in favor of the Secretary respecting DBL 101,
DBL 81 and DBL 82;

 

(viii)                        Additional Mortgage;

 

(ix)                                Assumption of Depository Agreement;

 

(x)                                   Termination of Depository Agreement
(Segregated Account); and

 

(xi)                                Acknowledgement regarding Bareboat
Charters respecting DBL 101, DBL 81 and DBL 82;

 

                (e)           The Secretary shall have received two
executed original counterparts of all documents delivered by K-Sea LP and K-Sea
OLP, the Indenture Trustee or the Depository in connection with this Amendment;

 

                (f)            K-Sea LP and K-Sea OLP shall have
caused:

 

5

 

                                                                (i)            K-Sea Transition4 Corp., a Texas
corporation (“Corp #4”), to execute and deliver the Assumption of Mortgage,
Security Agreement and Secretary’s Note (Corp4 DBL 101);

 

                                                                (ii)           K-Sea LP4, L.P., a Texas limited
partnership (“LP #4”), to execute and deliver the Assumption of Mortgage,
Security Agreement and Secretary’s Note (LP4 DBL 101);

 

                                                                (iii)          K-Sea LP1, L.P., a Texas limited
partnership (“LP #1”), to execute and deliver the Assumption of Mortgage,
Security Agreement and Secretary’s Note (LP1 DBL 81, DBL 82);

 

                                                                (iv)          K-Sea LP2, L.P., a Texas limited
partnership (“LP #2”), to execute and deliver the Assumption of Mortgage,
Security Agreement and Secretary’s Note (LP2 DBL 81, DBL 82);

 

                                                                (v)           One or more Letters of Credit to be
issued and delivered to the Secretary in an amount equal to the difference
between $8,000,000 and the amount of Additional Deposits; and

 

                                                                (vi)          [EW Holding Corp., a Delaware
corporation, to execute and deliver the Guaranty];

 

                (g)           The Secretary shall have received a
letter agreement from K-Sea LP and K-Sea OLP to provide the Secretary within a
reasonable time after the MLP Closing Date, with eight conformed copies of this
Amendment and each of the documents provided for therein executed on or prior
to such date;

 

                (h)           Each of K-Sea LP, K-Sea OLP, K-Sea
LLC, EW Holding, Corp #4, LP #4, LP #1, and LP #2 shall have furnished to the
Secretary on the date hereof an affidavit complying with the requirements of 46
CFR 355, demonstrating U.S. citizenship;

 

                (i)            Each of K-Sea LP and K-Sea OLP shall
have executed an Officer’s Certificate representing and warranting the truth of
the following statements as of the MLP Closing Date:

 

(1)           each of the representations and
warranties set out at Section 2.01 of the General Provisions of the Security
Agreement; and

 

(2)           each of K-Sea LP and K-Sea OLP is not
in violation of any Federal laws having a substantial adverse effect on the
interest of the United States of America under the Title XI Financing and the
consummation of the

 

 

6

 

transactions contemplated
by this Amendment complies in all material respects with non-Title XI Federal
law;

 

                (j)            K-Sea LP and K-Sea OLP shall have
complied in all material respects with its agreements under this Amendment;

 

                (k)           There shall not have occurred any
event which constitutes (or after any period of time or any notice, or both,
would constitute) a “Default” under the Security Agreement, unless waived by
the Secretary;

 

                (l)            There shall have been delivered to
the Secretary by K-Sea LP and K-Sea OLP an opinion of counsel substantially in
the form attached hereto;

 

                (m)          On the MLP Closing Date immediately
after the MLP Transaction, the qualifying requirements set forth in Section 10
of the Financial Agreement shall have been complied with and certified to as
required therein;

 

                (n)           Prior to the MLP Closing Date, there
shall have been delivered to the Secretary pro forma consolidated balance
sheets for the Consolidated Group, certified by an officer of K-Sea LP showing,
among other things, all non-Title XI debt of K-Sea LP and K-Sea OLP as of
[immediately following the consummation of the MLP Transaction];

 

                (o)           Each of the Delivered Vessels shall
have been re-documented under the laws of the United States in the name of
K-Sea OLP as owner thereof free and clear of all liens of record other than the
Mortgage;

 

(p)           At least ten (10) days prior to the
MLP Closing Date, K-Sea LP and K-Sea OLP shall have provided the Secretary with
satisfactory evidence of marine insurance as required by the Restated Security
Agreement;

 

(q)           On or prior to the MLP Closing Date,
the Assumption of Mortgage, Security Agreement and Secretary’s Note (Corp4 DBL
101); Assumption of Mortgage, Security Agreement and Secretary’s Note (LP4 DBL
101); Assumption of Mortgage, Security Agreement and Secretary’s Note (OLP DBL
101); Assumption of Mortgage, Security Agreement and Secretary’s Note (LP1 DBL
81, DBL 82); Assumption of Mortgage, Security Agreement and Secretary’s Note
(LP2 DBL 81, DBL 82); Assumption of Mortgage, Security Agreement and
Secretary’s Note (OLP DBL 81, DBL 82); the Mortgage and the Additional
Mortgage, shall have been filed for recording in the National Vessel
Documentation Center of the U.S. Coast Guard (the “NVDC”) so that the Mortgage
respecting the Delivered Vessels and the Additional Mortgage respecting the
Additional Vessels shall be maintained and fully perfected;

 

 

 

7

 

(r)            [EW Holding shall have executed and
delivered a corporate guaranty (the “Guaranty”) in favor of the Secretary in
the amount of Ten Million Dollars ($10,000,000), and such Guaranty shall be
collateralized by the Additional Mortgage];

 

(s)           On or prior to the MLP Closing Date,
K-Sea LP and K-Sea OLP shall have delivered or deposited the Additional
Availability of Funds in the aggregate amount of Eight Million Dollars
($8,000,000) to the Title XI Reserve Fund in accordance with the terms of
Section 6 of the Financial Agreement;

 

(t)            K-Sea LP and K-Sea OLP shall have
paid to the Secretary an  assumption fee
[of $_____________] respecting the exchange of the Obligations in accordance
with the terms of the Act;

 

(u)           K-Sea LP and K-Sea OLP shall have
granted or caused to be granted to the Secretary a fully perfected, first
priority security interest in each of the assets that constitute the Security;
and each shall duly effect the filing of a Uniform Commercial Code financing
statement (UCC-1) with the Secretary of State of the State of Delaware to perfect
the Secretary’s interests in the Security;

 

(v)           On or prior to the MLP Closing Date,
CIT, GATX, Fifth Third and Maritrans shall have executed all releases,
terminations and consents evidencing the payment and complete satisfaction of
all current obligations by the Original K-Sea Entities.

 

(w)          CIT, KeyBank, K-Sea LP and K-Sea OLP
shall have executed the Revolving Credit Facility dated as of the MLP Closing
Date.

 

ARTICLE
IV.        Continuation in Effect

 

                Except as
expressly amended by this Amendment, the Guarantee Commitment shall remain in
full force and effect.

 

 

ARTICLE
V.         Counterparts

 

                This Amendment may
be executed in any number of counterparts. 
All such counterparts shall be deemed to be originals, and together
shall constitute but one and the same instrument.

 

 

8

 

ARTICLE VI.        Governing
Law

 

THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF
AMERICA, TO THE EXTENT APPLICABLE, AND OTHERWISE IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

[signatures
on next page]

 

9

 

IN WITNESS WHEREOF,
this Amendment No. 1 to Commitment to Guarantee Obligations has been executed
by the parties hereto as of the day and year first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
  UNITED STATES OF AMERICA,

  SECRETARY OF TRANSPORTATION

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
  MARITIME ADMINISTRATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
  Maritime Administration

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION PARTNERS

  L.P., by its general partner K-Sea General

  Partner L.P., by its general partner K-Sea

  General Partner GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.,

  by its general partner K-Sea OLP GP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

10

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