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Exhibit 10.39  

 
  NON-STATUTORY STOCK OPTION AGREEMENT
  (Executive Agreement)    

        AGREEMENT
(this "Agreement") entered into as of the            day
of                        , 200    by and between WH Holdings (Cayman Islands) Ltd., a Cayman
Islands company (the "Company"), and the undersigned employee (the "Employee") of the Company or its Subsidiaries. 

        WHEREAS,
pursuant to the WH Holdings (Cayman Islands) Ltd. Stock Incentive Plan (the "Plan"), the Committee designated under the Plan desires to grant to the Employee an option to
acquire Common Shares, par value $0.001 per share, of the Company; and 

        WHEREAS,
the Employee desires to accept such option subject to the terms and conditions of this Agreement. 

        NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Company and the Employee, intending to be legally bound, hereby agree as
follows: 

        1.    Grant of Option.    On the terms and conditions hereinafter set forth, the Company hereby grants to the Employee
an option to purchase all (or any part) of            Shares (the "Option"). This Option is granted on the            day
of            , 200            (the "Grant Date"). The
Option is a Non-Statutory Stock Option. This Option is granted pursuant to the Plan, and is governed by the terms and conditions of the Plan. All defined terms used herein, unless
specifically defined in this Agreement, have the meanings assigned to them in the Plan. 

        2.    Exercise Price.    Subject to any adjustment under Section 8 and the terms of the Plan, the exercise
price (the "Exercise Price") for the Shares covered by the Option will be
$                              per share. 

        3.    Time of Exercise of Option.    

        (a)   The
Option will become vested and exercisable (if applicable, pro rata according to the number of Shares exercisable at
different exercise prices specified above) in quarterly 5% increments beginning on the last day of the calendar quarter during which the Grant Date occurs and each subsequent last day of each
following calendar quarter until the Option becomes fully exercisable on the last day of the calendar quarter immediately preceding the fifth anniversary of the Grant Date. 

        (b)   Notwithstanding
any provision in this Agreement or the Plan to the contrary, unless otherwise approved by a written resolution of the Committee prior to or
contemporaneously with the closing of any such transaction, any portion of the Option (whether vested or unvested and whether or not then exercisable) which has not been exercised prior to or in
connection with any merger or consolidation of the Company into another corporation, the exchange of all or substantially all of the assets of the Company for the securities of another corporation, a
Change of Control or the recapitalization, reclassification, liquidation or dissolution of the Company or any other fundamental corporate transaction involving the Company or any of its Subsidiaries
with the same or a similar purpose or effect (as determined by the Committee in its sole discretion) shall expire and be cancelled and of no further force and effect effective upon the closing of any
such transaction. 

        4.    Term of Options and Repurchase Rights.    

        (a)   The
Option will expire 10 years from the date hereof, but will be subject to earlier termination as provided below. 

        (b)   Upon
termination of employment: 

        (i)    the
unexercisable portion of the Option hereby granted will terminate on the date of such termination. 

        (ii)   the
exercisable portion of the Option hereby granted will be treated as follows: 

        (A)  Subject
in each case to the repurchase rights described in clause (c) below and the Shareholders' Agreement, if the Employee's employment is terminated for any
reason except for Cause, the exercisable portion of the Option hereby granted will be exercisable for thirty days following the termination, unless the Employee terminates employment on account of a
disability as defined in Code Section 22(e) or if the Employee dies, in which case such Employee, or such Employee's personal representative, may exercise the exercisable portion of the Option
hereby granted for 90 days following the termination of employment on account of disability or the Employee's death. 

        (B)  If
the Employee's employment is terminated for Cause, the exercisable portion of the Option hereby granted will terminate on the date of such termination. 

        (c)   Subject
to the terms of the Plan, the Company has the right to repurchase Shares acquired upon the exercise of Options for a period of 90 days beginning on the
later of (i) the day after the six month anniversary of the day the Shares for which the Option is exercised are acquired and (ii) the day the Employee terminates employment with the
Company. Notwithstanding anything to the contrary in the Shareholders' Agreement, the purchase price per Share payable under Section 6(a) or (b) of the Shareholder's Agreement where such
Termination (as defined in the Shareholders' Agreement): 

        (i)    was
due to resignation or for Cause shall be the amount equal to the lesser of: (A) the Fair Market Value at the time of such repurchase; and (B) the
Exercise Price; provided, however, that after the earlier to occur of the seventh anniversary of the Grant Date or the consummation of an event described in Section 3(b) of this Agreement, the
purchase price per Share shall be the Fair Market Value at the time of such repurchase; or 

        (ii)   was
without Cause or because of death, retirement or disability shall be the amount equal to the greater of: (A) the Fair Market Value at the time of such
repurchase; and (B) the Exercise Price. 

        (d)   For
purposes of this Agreement, "Cause" shall have the meaning ascribed to such term in any written employment agreement between Employee and the Company or one or more
of its Subsidiaries, as the same may be amended or modified from time to time, or if Employee and the Company or one or more of its Subsidiaries are not party to any such written employment agreement,
then the Company and its Subsidiaries shall have "Cause" to terminate the Employee's services in the event of any of the following acts or circumstances: (i) commission of a felony, a crime of
moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the Company or any of its Subsidiaries; (ii) willful misconduct, willful or gross neglect,
fraud, misappropriation or embezzlement; (iii) performance of the Employee's duties in a manner that is detrimental to the Company or any of its Subsidiaries, including, but not limited to that
which results in, the severe deterioration of the financial performance of the Company or any of its Subsidiaries; (iv) failure to adhere to the directions of the Chief Executive Officer or the
Board of Directors, to adhere to the Company's or any of its Subsidiary's policies or practices or to devote substantially all of the Employee's business time and efforts to the business of the
Company and its Subsidiaries; (v) breach of any provision of any agreement, including an employment agreement, between the Company or any of its Subsidiaries, on the one hand, and the Employee,
which covers confidentiality or proprietary information, nonsolicitation or non-competition provisions; or (vi) breach in any material respect of the terms and provisions of the
Employee's employment agreement, if any, or any agreement between the Company or any of its Subsidiaries, on the other hand, and the Employee. 

        5.    Manner of Exercise of Option.    The Option may be exercised by delivery, via first class mail, interoffice
mail, fax or electronic mail of a Notice of Option Exercise and related forms to the Company stating the number of Shares with respect to which the Option is being exercised and accompanied by payment
of the Total Exercise Cost in cash or by check, bank draft or money order 

payable
to the order of the Company or, subsequent to an Initial Public Offering, through the delivery to the Company of an Authorization for Exercise of Options "Cashless" Exercise Form with
irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the Total Exercise Cost, subject to such limitations as the Committee may adopt from time to time or by any
combination of the above methods of payment. 

        6.    Non-Transferability.    The right of the Employee to exercise the Option (as and when exercisable)
may not be assigned or transferred by the Employee other than by will or the laws of descent and distribution. The Option may be exercised and the Shares may be purchased during the lifetime of the
Employee only by the Employee (or the Employee's legal representative in the event that the Employee's employment is terminated due to "Disability" within the meaning of Code Section 22(e)).
Any attempted assignment or transfer, except as hereinabove provided, including without limitation any purported assignment, whether voluntary or by operation of law, pledge, hypothecation or other
disposition contrary to the provisions hereof, or any levy of execution, attachment, trustee process or similar process, whether legal or equitable, upon the Option, will in each instance be null and
void. 

        7.    Representation Letter and Investment Legend.    

        (a)   In
the event that for any reason the issuance of the Shares to be issued upon exercise of an exercisable Option will not be effectively registered under the 1933 Act,
upon any date on which the Option is exercised, the Employee (or the person exercising the Option pursuant to Paragraph 6) will give a written representation to the Company in the form attached
hereto as Exhibit A, and the Company will place the legend described in Exhibit A upon any
certificate for the Shares issued by reason of such exercise. 

        (b)   The
Company will be under no obligation to qualify Shares or to cause a registration statement or a post-effective amendment to any registration statement to
be prepared for the purpose of covering the issuance of Shares. 

        8.    Adjustments of Shares and Options.    Subject to Paragraph 7 of the Plan, in the event of any change in
the outstanding Shares by reason of an acquisition, spin-off or reclassification, recapitalization or merger, combination or exchange of Shares or other corporate exchange, Change of
Control or similar event, the Committee may adjust appropriately the number or kind of Shares or securities subject to the Option and exercise prices related thereto and make such other revisions to
the Option as it deems are equitably required. 

        9.    No Special Employment Rights.    Nothing contained in this Agreement will be construed or deemed by any person
under any circumstances to bind the Company or any of its Subsidiaries to continue the employment of the Employee for the period within which this Option may vest or for any other period. 

        10.    Rights as a Shareholder.    The Employee will have no rights as a shareholder with respect to any Shares which
may be purchased upon the exercise of this Option unless and until a certificate or certificates representing such Shares are duly issued and delivered to the Employee. If at any time during the term
of the Option, the Company is advised by its counsel that the Shares are required to be registered under the Securities Act or under applicable state securities laws, or that delivery of the Shares
must be accompanied or preceded by a prospectus meeting the requirements of such laws, delivery of Shares by the Company may be deferred until a registration is effective or a prospectus is available
or an appropriate exemption from registration is secured. 

        11.    Withholding Taxes.    The Employee hereby agrees, as a condition to any exercise of the Option, to provide to
the Company an amount sufficient to satisfy its obligation to withhold certain federal, state and local taxes arising by reason of such exercise (the "Withholding Amount"), if any, by
(a) authorizing the Company to withhold the Withholding Amount from the Employee's cash compensation, or (b) remitting the Withholding Amount to the Company in cash; provided that, to
the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Shares delivered upon exercise of the Option that 

number
of Shares having a Fair Market Value as of the date immediately prior to the issuance of such Shares equal to the Withholding Amount. 

        12.    Execution of Shareholders' Agreement and of Release and Waiver of Rights.    The Employee acknowledges that, in
connection with his or her prior or future purchase of Shares of the Company, he or she will execute and deliver the Shareholders' Agreement or a joinder or counterpart signature page thereto. The
Employee further agrees that all Shares acquired by such Employee upon exercise of the Option will be subject to the terms and conditions of the Shareholders' Agreement as modified hereby. Prior to
participation in the Plan, if the Committee requires, the Employee will execute a Release and Waiver to Rights to payments and benefits under certain plans of Herbalife International, Inc. 

        13.    Lock-Up Agreements.    The Employee agrees that notwithstanding anything to the contrary contained
in this Agreement, in the event of an Initial Public Offering or any other offering of securities of the Company, except to the extent that: (a) the Employee sells his or her Shares obtained
upon the exercise of the Option to the underwriters of the Company's securities in connection with such offering or (b) the underwriters do not request the following restrictions, such Employee
shall not (i) offer, hedge, pledge, sell or contract to sell any such Shares, (ii) sell any option or contract to purchase any Shares, (iii) purchase any option or contract to
sell any Shares, (iv) grant any option, right or warrant for the sale of any Shares, or (v) lend or otherwise dispose of or transfer any Shares during the longer of (A) any
black-out period requested by the underwriters conducting any such offering of securities on behalf of the Company and (B) during the seven days prior to and during the
180-day period beginning on the effective date of such Initial Public Offering or other offering of securities; provided, however, that such
Employee shall, in any event, be entitled to sell his or her Shares commencing on the expiration of the black-out period described in the aforementioned clause (A) or (B). 

        14.    Delivery of Certificates.    The Employee will have no interest in the Shares unless and until certificates for
the Shares are issued following exercise of the Option. 

********* 

[Signatures
on Following Page] 

OPTION AGREEMENT  

Counterpart Signature Page

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed, by its officer thereunto duly authorized, and the Employee has executed this Agreement, all as of the day and
year first above written. 

	WH HOLDINGS (CAYMAN ISLANDS) LTD.	 	EMPLOYEE
	

 	

 	
 	

 	
 	

 
	By:	 	 	 	 	 
	 	
	 	

	 	Title:	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	Address:
	 	
 (print name)	 	 
	

 	

 	
 	

 	
 	

 
	

 	

 	
 	

 	
 	

 
	 	 	 	 	 	Facsimile Number:
	 	 	 	 	 	 
	 	 	 	 	 	
 Social Security Number
	 	 	 	 	 	 
	 	 	 	 	 	E-mail Address:
	 	 	 	 	 	 

EXHIBIT A  

TO:    WH
HOLDINGS (CAYMAN ISLANDS) LTD. 

        The
undersigned hereby irrevocably exercises the right to purchase                        of the shares of Common Shares, par value
$0.001 per share ("Common Shares") of WH Holdings (Cayman
Islands) Ltd., a Cayman Islands company (the "Company"), evidenced by the attached Option, and herewith makes payment of the Exercise Price with respect to such shares in full, all in
accordance with the conditions and provisions of said Option. 

        1.     The
undersigned hereby represents and warrants to and agrees with the Company as follows: 

        (a)   The
undersigned understands and acknowledges that an investment in the Common Shares issuable upon exercise of this Option involves a high degree of risk and that there
are limitations on the liquidity of the Common Shares issuable upon exercise of this Option. The undersigned is able to bear the economic risk of an investment in the Common Shares issuable upon
exercise of this Option. The undersigned has adequate means of providing for the undersigned's current needs and contingencies; is able to afford to hold the Common Shares issuable upon exercise of
this Option for an indefinite period; and has such knowledge and experience in financial and business matters such that the undersigned is capable of evaluating the merits and risks of the investment
in the Common Shares issuable upon exercise of this Option; 

        (b)   The
undersigned is acquiring the Common Shares issuable upon exercise of this Option for its own account for investment and not as a nominee and not with a present view
to the distribution thereof in violation of the Securities Act of 1933, as amended (the "1933 Act"). The undersigned understands that the undersigned must bear the economic risk of this investment
indefinitely unless such shares are registered pursuant to the 1933 Act and any applicable state securities laws, or an exemption from such registration is available. The undersigned has no plan or
intention to sell the Common Shares issuable upon exercise of this Option at any predetermined time, and has made no predetermined arrangements to sell such shares; 

        (c)   The
undersigned will not make any sale, transfer or other disposition of the shares of Common Shares issuable upon exercise of this Option in violation of (1) the
1933 Act, the Securities Exchange Act of 1934, as amended, any other applicable Federal or state securities laws or the rules and regulations of the Securities and Exchange Commission or of any state
securities commissions or
similar state authorities promulgated under any of the foregoing, or (2) any applicable securities laws of jurisdictions outside the United States and the rules and regulations thereunder. 

        2.     The
undersigned agrees not to offer, sell, transfer or otherwise dispose of any of the Common Shares obtained on exercise of the Option, except in accordance with the
provisions of the Option, and consents that the following legend may be affixed to the stock certificates for the Common Shares hereby subscribed for, if such legend is applicable: 

"THE
SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS' AGREEMENT, DATED AS OF JULY 31, 2002 AMONG WH HOLDINGS
(CAYMAN ISLANDS) LTD. AND CERTAIN HOLDERS OF ITS OUTSTANDING SHARE CAPITAL, AS SUCH AGREEMENT MAY BE AMENDED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF WH HOLDINGS (CAYMAN ISLANDS) LTD. 

IN
ADDITION, THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY PROVINCIAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT UNDER THE 1933 ACT AND APPLICABLE PROVINCIAL OR STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT OR APPLICABLE PROVINCIAL OR STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER." 

        3.     The
undersigned requests that stock certificates for such shares be issued, and a new option agreement representing any unexercised portion hereof be issued in the name
of the registered holder and delivered to the undersigned at the address set forth below: 

[Signature
on the Following Page] 

	Dated:	 	 
	

 	
 	

 
	
 Signature of Registered Holder	 	 
	

 	
 	

 
	
 Name of Registered Holder (Print)	 	 
	 	 	 

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NON-STATUTORY STOCK OPTION AGREEMENT (Executive Agreement)<Page>

                                                                   Exhibit 4.1.2

                                                                  EXECUTION COPY

                                                                           I.A.4

                          SUPPLEMENTAL INDENTURE NO. 1

     THIS SUPPLEMENTAL INDENTURE NO. 1, dated as of January 14, 2004 (this
"Supplement"), among JPMORGAN CHASE BANK, a New York banking corporation (the
"Indenture Trustee"), EW HOLDING CORP., a New York corporation ("EW Holding"),
K-SEA TRANSITION4 CORP., a Texas corporation ("Transition4"), K-SEA LP4, L.P., a
Texas limited partnership ("LP#4"), K-SEA TRANSPORTATION LLC, a Delaware limited
liability company ("K-Sea LLC"), K-Sea LP1, L.P., a Texas limited partnership
("LP#1"), K-SEA LP2, L.P., a Texas limited partnership ("LP#2"), 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 LLC, EW Holding and the Indenture Trustee are the original
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, and have issued, ship financing
bonds designated "United States Government Guaranteed Ship Financing
Obligations, K-Sea Series 2002-1, 2002-2, 2002-3 and 2002-4" (the "Obligations")
in an aggregate original principal amount of Forty Million Four Hundred
Forty-One Thousand United States Dollars ($40,441,000) (generally referred to
herein 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 (collectively,
the "Vessels" and each, a "Vessel");

     C.   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, inter alia, K-Sea

<Page>

LLC, EW Holding, 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"), the following
mergers have occurred as of the date hereof:

          (i)     EW Holding has merged into Transition 4; Transition 4 has
     entered into a merger with LP#4 (with both entities surviving and all
     obligations, liabilities and assets relating to the Title XI Financing
     having been allocated to and vested into LP#4); and LP#4 has merged into
     K-Sea OLP; and

          (ii)    K-Sea LLC has merged into LP#1; LP#1 has entered into a merger
     with LP#2 (with both entities surviving and all obligations, liabilities
     and assets relating to the Title XI Financing having been allocated to and
     vested into LP#2); and LP#2 has merged into K-Sea OLP.

     D.   By assumption, merger and operation of law (x) each of Transition 4
and LP#4, successively, and each of LP#1 and LP#2, successively, simultaneously
herewith has succeeded to all of the interests and obligations of EW Holding and
K-Sea LLC, respectively, related to the Title XI Financing, including, without
limitation the Obligations, the Original Indenture, the Depository Agreement,
the Secretary's Note, the Original Security Agreement, the Mortgage and the
other documents and instruments related thereto, the Increased Security, and the
Vessels, respectively, and (y) each of LP#1 and LP#2 simultaneously herewith has
successively succeeded to all of the interests and obligations of K-Sea LLC in
the Construction Contract;

     E.   By assumption contained herein in the case of K-Sea LP, and by
assumption, merger and operation of law in the case of K-Sea OLP, K-Sea LP and
K-Sea OLP simultaneously herewith have succeeded to all of the interests and
obligations of EW Holding, Transition 4, LP#4, K-Sea LLC, LP#1, and LP#2
including, without limitation, the Obligations, the Original Indenture, the
Depository Agreement, the Secretary's Note, the Original Security Agreement, the
Mortgage, and all other documents and instruments related thereto and the
Vessels, and K-Sea OLP simultaneously herewith has succeeded to all of the
interests and obligations of LP#1 and LP#2 in the Construction Contract;

     F.   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 Obligations in exchange for Obligations
under which K-Sea LP and K-Sea OLP, jointly and severally, are the obligors.
Such Obligations are designated "United States Government Ship Financing
Obligations, K-Sea Series 2002-1, 2002-2, 2002-3 and 2002-4";

                                        2
<Page>

     G.   Each of Transition 4, LP#4, LP#1, LP#2, successively, and finally
K-Sea LP and K-Sea OLP, jointly and severally, is willing to assume all
obligations and liabilities of K-Sea LLC and EW Holding under the original
Indenture and the Obligations;

     H.   Section 8.01 of Exhibit 1 to the Indenture permits the merger of the
Shipowner (as defined therein) into another entity, and Section 10.01(2) of
Exhibit 1 to the Indenture provides that the Shipowner (as defined therein) and
the Indenture Trustee may, without the consent of or notice to any of the
Obligees, enter into a supplement to the Indenture to evidence the succession of
another entity to the Obligations of the Shipowner (as defined therein) under
the Indenture, provided that such supplement to the Indenture does not adversely
affect the interests of the Obligees;

     I.   Pursuant to said Section 10.01(2), the Shipowner (as defined in the
Indenture) and the Indenture Trustee desire to enter into this Supplement for
the purpose of supplementing and carrying out the terms of Section 8.01 of
Exhibit 1 to the Indenture;

     J.   The Secretary has consented pursuant to Section 10.05 of the
Indenture; and

     K.   All requirements of law and of the Indenture and of the governing
instruments of each of EW Holding, Transition4, LP#4, K-Sea LLC, LP#1, LP#2,
K-Sea LP and K-Sea OLP have been fully complied with, and all other acts and
things necessary to make this Supplement a valid, binding and legal instrument
have been done and performed.

     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
Sections 8.01 and 10.01(2) of the Indenture, each of (x) Transition4 and LP#4,
(y) LP#1 and LP#2, and then (z) K-Sea LP and K-Sea OLP, jointly and severally,
has successively assumed and does hereby expressly assume, and hereby does
expressly agree to perform, 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, and the Obligations,
together with all documents and instruments evidencing any such obligations,
duties, right,

                                        3
<Page>

title and interest thereto. Pursuant to Section 8.01(a)(1) of the Indenture,
each of K-Sea LP and K-Sea OLP has, as the final step in these successive
mergers, assumed and does expressly assume, 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 premium, if any) of the Outstanding Obligations,
relating to the Vessels. Each of K-Sea LP and K-Sea OLP jointly and severally
represents and warrants to the Secretary that each of Transition4, LP#4, LP#1
and LP#2 has successively assumed the obligations of K-Sea LLC and EW Holding,
respectively, in and to the Indenture and the Obligations.

     SECTION 2. SECRETARY'S CONSENT. The United States, acting through the
Secretary, (i) by its consent and agreement below, consents and agrees to the
assumptions described in Section 1 above, the execution and delivery of this
Supplement as required under Section 10.05 of the Indenture, and agrees to
execute and deliver a release of each of K-Sea LLC, EW Holding, Transition4,
LP#4, LP#1 and LP#2 from the Indenture immediately after consummation of all the
mergers described herein, such release to be substantially in the form attached
hereto as Exhibit 1 and shall be effective as set forth in Article II, Section
1(a), and (ii) 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 OBLIGATIONS.

     (a)  In accordance with the terms of Section 8.01(b) of the Indenture but
effective only upon the execution and delivery by the Secretary of a release
substantially in the form of Exhibit 1, the Indenture Trustee and the Secretary
hereto expressly discharge and release EW Holding, Transition4, LP#4, K-Sea LLC,
LP#1 and LP#2 from any and all obligations relating to the Indenture and the
Obligations. Upon delivery of the release by the Secretary substantially in the
form of Exhibit 1, the release contained therein of each of EW Holding,
Transition 4, LP#4, K-Sea LLC, LP#1 and LP#2 shall be effective as of the
effective time of the relevant merger.

     (b)  Concurrently with the issuance and delivery of the Obligations
pursuant to Section 2 below, the Indenture Trustee shall cancel the Obligations
issued by K-Sea LLC and EW Holding and currently held by the Indenture Trustee
for the benefit of the Obligees. The parties hereto agree that the Obligations
executed by K-Sea LLC and EW Holding as exchanged into the Obligations executed
by K-Sea LP and K-Sea OLP constitute the same indebtedness and that at no time
is, or will, a principal amount of Obligations in excess of $40,441,000 be
outstanding.

                                        4
<Page>

     SECTION 2. ISSUANCE OF OBLIGATIONS.

     (a)  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,
jointly and severally, shall, in exchange for the existing Obligations executed
by K-Sea LLC and EW Holding, execute and issue Obligations of the same Series,
in the same principal amounts and payable to the same Person(s) as the
surrendered Obligations. 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 exchange
for the Obligations in accordance with the terms hereof and Article II and
Article III of the Indenture, and (2) authenticate and deliver such Obligations
in the names of K-Sea LP and K-Sea OLP, jointly and severally, in exchange for
the Obligations surrendered and cancelled.

ARTICLE III.   AMENDMENTS

     The  Indenture is hereby amended as follows:

     SECTION 1. 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 assumption, merger and operation of law to EW Holding,
Transition4, LP#4, K-Sea LLC, LP#1, and LP#2, PROVIDED, HOWEVER, where the
context refers to the Shipowner solely in its capacity as owner of any Vessel,
such reference shall be deemed to mean and refer to K-Sea OLP alone.

                                        5
<Page>

     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

     Each of EW Holding, Transition4, LP#4, K-Sea LLC, LP#1 and LP#2 as:

          c/o K-Sea Transportation Partners L.P.
          Attn.: Chief Financial Officer
          3245 Richmond Terrace
          Staten Island, NY 10303

     Each of K-Sea LP and K-Sea OLP as:

          c/o K-Sea Transportation Partners L.P.
          Attn.: Chief Financial Officer
          3245 Richmond Terrace
          Staten Island, NY 10303

                                        6
<Page>

     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. 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 2. 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 3. 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 WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

     SECTION 4. 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 5. 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]

                                        7
<Page>

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

[Seal]                             EW HOLDING CORP.,

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Chief Financial Officer

[Seal]                             K-SEA TRANSITION4 CORP.,

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Vice President

[Seal]                             K-SEA LP4, L.P.,
                                   by its general partner, K-Sea GP4, LLC,

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Manager

[Seal]                             K-SEA TRANSPORTATION LLC

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Chief Financial Officer

[Seal]                             K-SEA LP1, L.P.,
                                   by its general partner, K-Sea GP1, LLC,

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Manager

<Page>

[Seal]                             K-SEA LP2, L.P.,
                                   by its general partner, K-Sea GP2, LLC,

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Manager

[Seal]                             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

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Chief Financial Officer

[Seal]                             K-SEA OPERATING PARTNERSHIP L.P.,
                                   by its general partner K-Sea OLP GP, LLC

 /S/ RICHARD P. FALICNELLI         BY:  /S/ JOHN J. NICOLA
----------------------------          ----------------------------
Attest:                                Name:   John J. Nicola
                                       Title:  Chief Financial Officer

[Seal]                             JPMORGAN CHASE BANK,
                                   as Indenture Trustee

  /S/ ILLEGIBLE                    By:  /S/ JAMES D. HEANEY
----------------------------          ----------------------------
Attest:                                Name:   James D. Heaney
                                       Title:  Vice President

                                        9
<Page>

CONSENTED AND AGREED TO BY:

UNITED STATES OF AMERICA,
Secretary of Transportation
Maritime Administrator

By:  /S/ JOEL C. RICHARD
   -------------------------
   Title: Secretary                     /S/ SARAH J. WASHINGTON
          Maritime Administration     ----------------------------
                                      Attest:

                                       10
<Page>

STATE OF NEW YORK          )
                           ) ss:
COUNTY OF NEW YORK         )

     On this 9th day of January, 2004 before me, Sophia Bryan, a Notary Public
in and for the State and County of New York, personally appeared John J. Nicola,
duly known to me, who acknowledged to me that he is

     (i)     Chief Financial Officer of EW Holding Corp.,

     (ii)    Vice-President of K-Sea Transition4 Corp.,

     (iii)   a Manager of K-Sea GP4, LLC, which is general partner of K-Sea LP4,
L.P.,

     (iv)    Chief Financial Officer of K-Sea Transportation LLC,

     (v)     a Manager of K-Sea GP1, LLC which is general partner of K-Sea LP1,
L.P.,

     (vi)    a Manager of K-Sea GP2, LLC which is general partner of K-Sea LP2,
L.P.,

     (vii)   Chief Financial Officer of K-Sea General Partner GP LLC which is
general partner of K-Sea General Partner L.P., which is, in turn, general
partner of K-Sea Transportation Partners L.P., and

     (viii)  Chief Financial Officer of K-Sea OLP GP, LLC which is general
partner of K-Sea Operating Partnership L.P.,

each an entity described in and that executed the instrument hereto annexed, and
he acknowledged the same to be his act as said officer or manager.

                                                    /S/ SOPHIA BRYAN
                                                   -------------------------
                                                   NOTARY PUBLIC
                                                   My Commission Expires:

(NOTARIAL SEAL)

                                       11
<Page>

STATE OF NEW YORK          )
                           ) ss:
COUNTY OF NEW YORK         )

     On this 7th day of January, 2004 before me, Emily Fayan, a Notary Public in
and for the State and County of New York, personally appeared James D. Heaney,
duly known to me, who acknowledged that he is Vice President of JPMorgan Chase
Bank, a banking corporation, the entity described in and that executed the
instrument hereto annexed, and he acknowledged the same to be his act as said
officer.

                                                     /S/ EMILY FAYAN
                                                   -------------------------
                                                   NOTARY PUBLIC
                                                   My Commission Expires:

(NOTARIAL SEAL)

                                       12
<Page>

                                                                       EXHIBIT 1

                               SECRETARY'S RELEASE

     The United States of America, represented by the Secretary of
Transportation, acting by and through the Maritime Administrator (the
"Secretary") hereby releases, except for warranties and representations made to
the Secretary, each of the following entities (as of the effective time of their
respective merger), from all of its respective obligations, duties, right, title
and interest in the Indenture, Obligations, Financial Agreement, Security
Agreement, Secretary's Note, Assumptions of Mortgage, Security Agreement and
Secretary's Note, Guarantee Commitment and all other documents and agreements
relating thereto:

     EW Holding Corp.
     K-Sea Transition4 Corp.
     K-Sea LP4, L.P.
     K-Sea Transportation LLC
     K-Sea LP1, L.P.
     K-Sea LP2, L.P.
     K-Sea Acquisition
     K-Sea Transportation Corp.

     Terms used herein and not otherwise defined herein are used as defined in
Schedule X to the Amended and Restated Security Agreement dated as of the date
hereof among K-Sea Transportation Partners L.P., K-Sea Operating Partnership
L.P. and the Secretary.

                                                 United States of America,
                                                 Secretary of Transportation,
                                                 Maritime Administrator

                                                 By:
                                                    ----------------------------
                                                 Title:       Secretary
                                                        Maritime Administration

Dated as of January ___, 2004

                                       13
<Page>

                                                                      SCHEDULE A

                                       14

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