Document:

Exhibit 10.1 

Execution Copy

FIRST AMENDMENT TO THE PLAN SUPPORT AGREEMENT

                    This
FIRST AMENDMENT TO THE PLAN SUPPORT AGREEMENT (including the Amended and
Restated Plan Term Sheet attached hereto (the “Amended and Restated Term
Sheet”), this “First Amendment”), dated as of July 10, 2009, amends that
certain Plan Support Agreement (the “Agreement”), dated as of April 23, 2009,
by and among (i) U.S. Shipping Partners L.P. (“USSP”), U.S. Shipping Finance
Corp., U.S. Shipping Operating LLC, USS Chartering LLC, USS ATB 1 LLC, USS ATB
2 LLC, USS ATB 3 LLC, USS ATB 4 LLC, USS M/V Houston LLC, ITB Mobile LLC, USCS
Chemical Pioneer Inc., ITB Groton LLC, ITB New York LLC, ITB Jacksonville LLC,
ITB Baltimore LLC, USCS ATB LLC, USCS Sea Venture LLC, ITB Philadelphia LLC,
USCS Chemical Chartering LLC, USCS Charleston Chartering LLC, USCS Charleston
LLC, USS JV Manager Inc., USS Product Manager LLC, USS PC Holding Corp., US
Shipping General Partner LLC (“USSGP”), and USS Product Carriers LLC
(collectively, the “U.S. Shipping Entities”), (ii) certain lenders party to the
First Lien Credit Agreement (as defined in the Agreement) (each, a “Senior
Secured Lender” and collectively, the “Senior Secured Lenders”), and (iii)
certain holders of Second Lien Notes (as defined in the Agreement) (each, a
“Signing Noteholder” and, together with the other holders who signed the
original Plan Support Agreement, the “Second Lien Noteholders”; the Second Lien
Noteholders, together with the Senior Secured Lenders, each a “Secured Party”
and collectively, the “Secured Parties”). 

RECITALS

                              WHEREAS,
the U.S. Shipping Entities and the Secured Parties entered into the Agreement
to reorganize and recapitalize the U.S. Shipping Entities (the “Transactions”)
in accordance with a proposed pre-arranged chapter 11 plan of reorganization
(the “Plan”), whose material terms and conditions were set forth in the term
sheet attached to the Agreement as Exhibit “A”; 

                              WHEREAS,
paragraph 18(b) of the Agreement permits USSP and a majority in number of the
Steering Committee (as defined in the Agreement) to amend the Agreement as set
forth herein if such amendment is agreed to in a writing signed by a majority
in amount of the Senior Secured Lenders and the Second Lien Noteholders; 

                              WHEREAS,
due to recent developments in the business of USSP, settlement of litigation
involving the U.S. Shipping Entities’ joint venture to construct five product
tankers, and adverse developments in interest rate markets, the Steering
Committee approached USSP concerning the possibility of adjusting the Plan; 

7

                              WHEREAS,
the undersigned (the “First Amendment Parties”), including USSP, the Steering
Committee, a majority in amount of the Senior Secured Lenders and the Signing
Noteholders, in order to preserve the benefits sought by the Transactions, seek
to amend the Agreement and the Term Sheet as set forth herein; and 

                              WHEREAS,
(i) some of the information considered by the First Amendment Parties in
discussing the merits and terms of this First Amendment and the Amended and
Restated Term Sheet may be material, nonpublic information, (ii) such
information has accordingly not been shared with the Second Lien Noteholders
other than the Signing Noteholders who have agreed to treat such information in
confidence, and (iii) the Signing Noteholders comprise the requisite majority
in principal amount of the Second Lien Notes necessary to bind the Second Lien
Noteholders as described in the second Recital above; 

                              NOW
THEREFORE, the Agreement is amended as follows: 

          1.          All
references to “Term Sheet” in the Agreement are amended to refer to “Amended
and Restated Term Sheet” and the Term Sheet is superseded by the Amended and
Restated Term Sheet. 

          2.          All
references to “Agreement” in the Agreement are amended to refer to the
Agreement as amended by the First Amendment. 

          3.          The
initial 120-day period referred to in paragraph 3 of the Agreement within which
the U.S. Shipping Entities are required to obtain confirmation of an Acceptable
Plan is amended so that the U.S. Shipping Entities are permitted an initial
period of 175 days to obtain confirmation of an Acceptable Plan. Provisions
concerning the extension of this time period are unchanged by this First
Amendment. 

          4.          Paragraph
6(b) of the Agreement is amended to provide: “at 5:00 P.M. prevailing Eastern
Time on the 115th day after the Filing Date if a hearing has not been held
before the Bankruptcy Court on or before such date to consider the approval of
the Disclosure Statement; provided, however, that upon notice from either the
U.S. Shipping Entities or the Steering Committee to the other there shall be a
30-day extension of such 115-day period;” 

          5.          Paragraph
6(c) of the Agreement is amended to provide: “at 5:00 P.M. prevailing Eastern
Time on the 175th day after the Filing Date if the Disclosure Statement has not
been approved and the Acceptable Plan has not been confirmed by the Bankruptcy
Court on or before such date; provided, however, that upon notice from either
the U.S. Shipping Entities or the Steering Committee to the other there shall
be a 30-day extension of such 175-day period;” 

          6.          Paragraph
6(d) of the Agreement is amended to provide: “at 5:00 P.M. prevailing Eastern
Time on November 16, 2009 if there has not occurred substantial consummation
(as defined in Section 1101 of the Bankruptcy Code) of the Acceptable Plan on
or before such date; provided, however, that upon notice from either the U.S.
Shipping Entities or the Steering Committee to the other there shall be an extension
of such date until December 16, 2009;”

8

          7.          The
representations and warranties provided in paragraphs 7 through 9 and 22, and
the acknowledgement in paragraph 34, of the Agreement are fully incorporated
herein with respect to the U.S. Shipping Entities and, severally but not
jointly, each Senior Secured Lender signing this Agreement and each Signing
Noteholder. 

          8.
          USSP shall file a
copy of the First Amendment with the Bankruptcy Court in its Chapter 11 Case
(as such terms are defined in the Agreement) within two (2) business days of
the execution of the First Amendment but shall not publicly disclose
identification of the signing Secured Parties. 

[The remainder of this page is intentionally
left blank.]

9

          IN
WITNESS WHEREOF, each of the First Amendment Parties has caused this First
Amendment to be executed and delivered by its duly authorized officer. 

	
 

	
 

	
 

	
 

	
 

	
U.S.
 SHIPPING PARTNERS L.P.

	
 

	
By: US
 Shipping General Partner LLC, its general partner

	
 

	
 

	
 

	
By: 

	
/s/ Ronald
 L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald
 L. O’Kelley

	
 

	
Title: Chief Executive Officer 

	
 

	
 

	
 

	
STEERING COMMITTEE 

	
 

	
By: Zimmer Lucas Partners, Steering Committee Chair 

	
 

	
 

	
 

	
By: 

	
/s/

	
 

	
 

	 

	
 

	
 

	
Name: Devin L. Geoghegan

	
 

	
Title: Partner, Co-Director of Research

Signature Page to First Amendment

	
 

	
 

	
 

	
 

	
 

	
SENIOR SECURED LENDERS

	
 

	
 

	
 

	
[*]

	
 

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name:

	
 

	
Title:

	
 

	
 

	
 

	
Principal
 amount of Senior Secured Claims held:

	
 

	
$___________________

	
 

	
 

	
 

	
Date:
 _________________

	
 

	
 

	
 

	
[Address]

	
 

	
Attention:

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
[*]

	
 

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name:

	
 

	
Title:

	
 

	
 

	
 

	
Principal
 amount of Senior Secured Claims held:

	
 

	
$___________________

	
 

	
 

	
 

	
Date:
 _________________

	
 

	
 

	
 

	
[Address]

	
 

	
Attention:

	
 

	
Fax: [*]

	
 

	
Email:

Signature Page to First Amendment

	
 

	
 

	
 

	
 

	
 

	
SENIOR SECURED LENDERS (cont.) 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By: 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal
 amount of Senior Secured Claims held: 

	
 

	
$___________________

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address] 

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal
 amount of Senior Secured Claims held: 

	
 

	
$___________________
 

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address] 

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

Signature Page to First Amendment

	
 

	
 

	
 

	
 

	
 

	
SECOND LIEN NOTEHOLDERS 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By: 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal
 amount of Second Lien Secured Claims held: 

	
 

	
$___________________
 

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address] 

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By: 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal amount
 of Second Lien Secured Claims held: 

	
 

	
$___________________
 

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address] 

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

Signature Page to First Amendment

	
 

	
 

	
 

	
 

	
 

	
SECOND LIEN NOTEHOLDERS (cont.) 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal
 amount of Second Lien Secured Claims held: 

	
 

	
$___________________
 

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

	
 

	
 

	
 

	
[*] 

	
 

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
Title: 

	
 

	
 

	
 

	
Principal
 amount of Second Lien Secured Claims held: 

	
 

	
$___________________

	
 

	
 

	
 

	
Date:
 _________________ 

	
 

	
 

	
 

	
[Address] 

	
 

	
Attention: 

	
 

	
Fax: [*] 

	
 

	
Email: 

Signature Page to First Amendment

	
 

	
Execution Copy 

	
 

	 

	
 

	
U.S. Shipping Partners L.P.

	
 

	
AMENDED AND RESTATED PLAN
TERM SHEET  

	
 

	
As of July 9, 2009

	
 

	 

The following is a summary
(the “Plan Term Sheet”)
of certain material terms of a proposed plan of reorganization (the “Plan”) of the Company
(as defined below), USS Product Carriers LLC (“USSPC”) and US Shipping General Partner,
the general partner of USSP (“USSGP”), under chapter 11 of title 11 of the United
States Code (the “Bankruptcy
Code”). The Plan Term Sheet contains terms of the Plan that have
been amended and restated from that certain Revised Plan Term Sheet dated as of
April 22, 2009 (the “Original
Plan Term Sheet”). This Plan Term Sheet does not contain all the
terms, conditions, and other provisions of the Plan and the transactions
contemplated by this Plan Term Sheet are subject to conditions to be set forth
in definitive documents. This Plan Term Sheet is proffered in the nature of a
settlement proposal in furtherance of settlement discussions and is entitled to
protection from any use or disclosure to any party or person pursuant to
Federal Rule of Evidence 408 and any other rule of similar import. This Plan
Term Sheet and the information contained herein are strictly confidential and
contain material non-public information. It is being provided to the (i) Senior
Secured Lenders (as defined below) in accordance with the confidentiality
provisions of the First Lien Credit Agreement (as defined below) and (ii) those
Second Lien Noteholders (as defined below) who have agreed to maintain the
confidentiality hereof. This Plan Term Sheet does not constitute an offer of
securities, nor is it an offer or solicitation for any chapter 11 plan, and is
being presented for discussion and settlement purposes only. 

Prior to filing chapter 11
petitions, the Company entered into a plan support agreement, dated as of April
23, 2009 and effective as of April 29, 2009 (“Plan Support Agreement”) with (i) Senior
Secured Lenders comprising more than one half in number of all Senior Secured
Lenders and holding at least sixty percent (60%) of the aggregate amount of the
Senior Secured Claims (as defined below) (the “Requisite Senior Lenders”) and (ii)
Second Lien Noteholders holding at least sixty percent (60%) of the aggregate
amount of the Second Lien Secured Claims (as defined below) (the “Requisite Second Lien Noteholders”),
pursuant to which the signatories thereto agreed to support a plan of
reorganization based on the Original Plan Term Sheet, which was attached as
Exhibit “A” to such Plan Support Agreement. The Plan Support Agreement
contained Milestones (as defined below) for the Debtors’ chapter 11 cases filed
in the Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). 

Upon agreement by the
relevant parties to that certain First Amendment to the Plan Support Agreement,
this Plan Term Sheet will be attached to such First Amendment in substitution
for, and will supersede in all respects, the Original Plan Term Sheet. 

I.          Parties

	
 

	
 

	
 

	
Debtors

	
 

	
U.S. Shipping Partners L.P.
 (“USSP”),
 and certain of its subsidiaries (collectively, the “Company” or the “Debtors”),
 including, without limitation, all Borrowers under the First Lien Credit
 Agreement and all Issuers and Guarantors under the Second Lien Notes (as each
 term is defined below), USSPC, USSGP and USS Vessel Management LLC. 

15

	
 

	
 

	
 

	
The First
 Lien Credit Agreement

	
 

	
Third Amended and Restated
 Credit Agreement, dated as of August 7, 2006 (as amended, the “First Lien Credit Agreement”),
 among U.S. Shipping Partners L.P., U.S. Shipping Operating LLC, ITB Baltimore
 LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC,
 ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering LLC, USCS
 Chemical Pioneer Inc., USCS Charleston Chartering LLC, USCS Charleston LLC,
 USCS ATB LLC, USS ATB 1 LLC, USS ATB 2 LLC, USCS Sea Venture LLC, USS M/V
 Houston LLC, U.S. Shipping Finance Corp., USS Product Manager LLC, USS JV
 Manager Inc., and USS PC Holding Corp., as borrowers (collectively, the “Borrowers”), USS ATB
 3 LLC and USS ATB 4 LLC as guarantors, Canadian Imperial Bank of Commerce, as
 Administrative Agent (the “Administrative Agent”) and Letter of Credit Issuer,
 the collateral agent under the First Lien Credit Agreement (the “Collateral Agent”)
 and the lender parties thereto (collectively, the “Senior Secured Lenders”)
 and any and all of the documents, notes, instruments and other agreements
 (including, without limitation, each of the Loan Documents (as defined in the
 First Lien Credit Agreement) and the ISDA Master Agreements), executed,
 delivered or filed pursuant to or in connection with the aforementioned Third
 Amended and Restated Credit Agreement, as such Third Amended and Restated
 Credit Agreement, documents, notes and other agreements and instruments (including
 the Loan Documents and the ISDA Master Agreement) may have been amended,
 supplemented, modified or allonged.

	
 

	
 

	
 

	
Second
 Lien 13% Senior

 Secured Notes due 2014

	
 

	
Second Lien 13% Senior
 Secured Notes due 2014 (the “Second Lien Notes”) issued pursuant to that certain
 Indenture, dated as of August 7, 2006 (the “Second Lien Indenture”) among USSP and
 U.S. Shipping Finance Corp., as issuers (the “Issuers”), U.S. Shipping Operating
 LLC, USS ATB 1 LLC, USS ATB 2 LLC, USS Chartering LLC, USS M/V Houston LLC,
 USS Product Manager LLC, USS JV Manager Inc., ITB Baltimore LLC, ITB Groton
 LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia
 LLC, USCS Chemical Pioneer Inc., USCS Chemical Chartering LLC, USCS
 Charleston Chartering LLC, USCS Charleston LLC, and USCS Sea Venture LLC, as
 guarantors (the “Guarantors”),
 and Wells Fargo Bank, N.A., as indenture trustee (the “Indenture Trustee”).

	
 

	
 

	
 

	
II.          Proposed Restructuring

	
 

	
The Company will
 restructure its debt and equity interests pursuant to the Plan as described
 below. Unless otherwise indicated, all transactions will take place on the
 date the Plan becomes effective (the “Effective Date”).

	
 

	
 

	
 

	
Corporate
 and Capital 

 Structure of Reorganized 

 Debtors1

	
 

	
The proposed Plan contemplates a reorganization of the Company (the “Restructuring”) as a corporation
under Delaware law that is compliant with sections 12103 and 50501 of title 46 of the United States Code and
Part 4.80 of title 19 of the Code of Federal Regulations (collectively, the “U.S. Coastwise Trade Laws”).  

	
 

	
 

	
 

	
 

	
1
 Reorganized Debtors means
 Reorganized USSP (as defined below), USS Chartering LLC, USCS Chemical
 Pioneer Inc., USCS Charleston Chartering LLC, USCS Charleston LLC, USS
 Product Manager LLC, USS JV Manager Inc., USS ATB 1 LLC, USS ATB 2 LLC, USS
 ATB 3 LLC, USS M/V Houston LLC, ITB New York LLC, ITB Baltimore LLC, ITB
 Mobile LLC, USCS ATB LLC, USCS Sea Venture LLC, ITB Philadelphia LLC and, USCS
 Chemical Chartering LLC, USS Vessel Management LLC and USS Product Carriers
 LLC on and after the Effective Date (as defined below). The Debtors may elect
 to dissolve or merge our of existence one or more of these entities at the
 Effective Date.

16

	
 

	
 

	
 

	
Through the Plan, all
 existing partnership and other equity interests in USSP (the “USSP Prepetition Equity Interests”)
 shall be deemed cancelled and extinguished. New common stock, par value
 $0.001 per share, in two classes, Class A (the “Class A New Common Stock”) and Class B
 (the “Class B New
 Common Stock” and together with the Class A New Common Stock,
 the “New Common Stock”)
 shall be issued to the Senior Secured Lenders and holders of the Second Lien
 Notes (the “Second
 Lien Noteholders”) in reorganized USSP (“Reorganized USSP”)
 along with Warrants (as defined below) to purchase the New Common Stock. Each
 share of New Common Stock will have the same ownership and voting rights,
 provided that dividends and other distributions declared in respect of the
 New Common Stock will first be distributed in respect of the Class A New
 Common Stock in amount equal to, in aggregate approximately $54 million2
 plus a four percent (4%) simple annual accruing dividend on the balance of
 the $54 million (the “Priority
 Distribution Amount”). Class B New Common Stock will have no
 stated dividend. The total number of shares shall be divided so that
 forty-five percent (45%) of the New Common Stock is Class A New Common Stock
 and fifty-five percent (55%) of the New Common Stock is Class B New Common
 Stock (on a fully diluted basis after giving effect to the Management Equity
 Plan (defined below).

	
 

	
 

	
 

	
The debt incurred in
 connection with the First Lien Credit Agreement will be converted into a
 senior secured credit facility involving two ranked tranches of debt with an
 aggregate principal amount of $300 million (the “New Term Loans”),
 the terms of which are set forth below. The debt incurred in connection with
 the First Lien Credit Agreement will also be converted into the Class A New
 Common Stock and Warrants to purchase Class A New Common Stock (the “Class A Warrants”),
 the terms of which are set forth below.

	
 

	
 

	
 

	
The Second Lien Notes will
 receive Class B New Common Stock and Warrants to purchase Class B New Common
 Stock (the “Class B
 Warrants” and together with the Class A Warrants the “Warrants”), the
 terms of which are set forth below.

	
 

	
 

	
 

	
Through the Plan, USSGP
 will be merged with and into Reorganized USSP on the Effective Date, with
 Reorganized USSP being the surviving corporation.3

	
 

	
 

	 

	 

	
2
 The exact amount of the Priority Distribution Amount will depend on the
 finalization of the interest rate swap termination obligations.

	
 

	
3
 The Debtors may instead elect to dissolve USSGP.

17

	
 

	
 

	
 

	
 

	
 

	
 

	
Equity
 Ownership in 

 Reorganized Debtors

	
 

	
The equity ownership of
 Reorganized USSP shall be held as follows:

	
 

	
 

	
(a)

	
100% of Class A New Common
 Stock of Reorganized USSP (after giving effect to the exercise of all Class A
 Warrants issued pursuant to this clause) shall be issued to the Senior
 Secured Lenders (the “Senior
 Secured Lenders’ Equity Share”). The Senior Secured Lenders’
 Equity Share shall consist of shares of Class A New Common Stock and Class A
 Warrants and be issued on the Effective Date, subject to the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Each Senior Secured Lender
 that is a U.S. Citizen (“Domestic
 Holder”) shall be issued shares of Class A New Common Stock in
 an amount equal to its pro rata share4 of the Senior Secured
 Lenders’ Equity Share; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Each Senior Secured Lender
 who is not a U.S. Citizen for U.S. Coastwise Trade Laws purposes5
 (“Foreign Holder”)
 shall be issued shares of Class A New Common Stock and Class A Warrants in an
 amount equal to its pro rata share of the Senior Secured Lenders’ Equity
 Share, with each Foreign Holder being allocated shares of Class A New Common
 Stock and Class A Warrants as follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A) a number of shares of
 Class A New Common Stock equal to the product determined by multiplying (I)
 23% of the total number of shares of Class A New Common Stock to be
 outstanding on the Effective Date by (II) a fraction, (x) the numerator of
 which is the amount of such Foreign Holder’s Senior Secured Claim and (y) the
 denominator of which is the total amount of Senior Secured Claims held by all
 Foreign Holders; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B) Class A Warrants
 representing the number of shares of Class A New Common Stock equal to such
 Foreign Holder’s pro rata share of the Senior Secured Lenders’ Equity Share
 less the number of shares of Class A New Common Stock issued to such Foreign
 Holder pursuant to subclause (A) above.

	
 

	
 

	
 

	
 

	
4
 For purposes hereof, a Senior Secured Lender’s pro rata share shall equal the
 percentage determined by dividing the amount of such Senior Secured Lender’s
 Senior Secured Claim by the total of all Senior Secured Claims.

	
 

	
5
 The term “U.S. Citizen” will hereinafter be used to refer to U.S. Citizens
 for U.S. Coastwise Trade Laws purposes.

18

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
100% of Class B New Common
 Stock of Reorganized USSP (after giving effect to the exercise of all Class B
 Warrants issued pursuant to this clause but before giving effect to the
 Management Equity Plan) shall be issued to the Second Lien Noteholders (the “Second Lien Noteholders’ Equity
 Share”). The Second Lien Noteholders’ Equity Share shall
 consist of shares of Class B New Common Stock and Class B Warrants and be
 issued on the Effective Date, subject to the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Each Second Lien
 Noteholder that is a Domestic Holder shall be issued shares of Class B New
 Common Stock in an amount equal to its pro rata share6 of the
 Second Lien Noteholders’ Equity Share; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Each Second Lien
 Noteholder who is a Foreign Holder shall be issued shares of Class B New
 Common Stock and Warrants in an amount equal to its pro rata share of the
 Second Lien Noteholders’ Equity Share, with each Foreign Holder being
 allocated shares of Class B New Common Stock and Class B Warrants as follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A) a number of shares of
 Class B New Common Stock equal to the product determined by multiplying (I)
 23% of the total number of shares of Class B New Common Stock to be
 outstanding on the Effective Date by (II) a fraction, (x) the numerator of
 which is the amount of such Foreign Holder’s Second Lien Secured Claim and
 (y) the denominator of which is the total amount of Second Lien Secured
 Claims held by all Foreign Holders; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B) Class B Warrants
 representing the number of shares of Class B New Common Stock equal to such
 Foreign Holder’s pro rata share of the Second Lien Noteholders’ Equity Share
 less the number of shares of Class B New Common Stock issued to such Foreign
 Holder pursuant to subclause (A) above.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
In no event shall the
 Foreign Holders own more than 23% of the New Common Stock outstanding on the
 Effective Date.

	
 

	
 

	
 

	
 

	
 

	
The allocations noted in
 clause (b) above shall be subject to dilution on account of the issuance of
 New Common Stock to the post-reorganization management pursuant to the
 Management Equity Plan, described in further detail below.

	
 

	
 

	
 

	
 

	
 

	
New Common Stock that was
 originally issued to a US Citizen may be sold only to a U.S. Citizen.

	
 

	
 

	
 

	
 

	
 

	
New Common Stock and
 Warrants will be exempt from the registration requirements of the Securities
 Act upon issuance pursuant to section 1145 of the Bankruptcy Code and
 Reorganized USSP will not be subject to the reporting requirements of the
 Securities Exchange Act of 1934. Transfer of New Common Stock and Warrants
 shall not be registered and shall be subject to applicable securities laws
 regarding transfer.

	
 

	 

	
6
 For purposes hereof, a Second Lien Noteholder’s pro rata share shall equal
 the percentage determined by dividing the amount of such Second Lien
 Noteholder’s Second Lien Secured Claim by the total of all Second Lien
 Secured Claims.

19

	
 

	
 

	
 

	
Operation
 of Post-

 Reorganization Business 

 and Certain Limitations on 

 Distributions With Respect 

 to New Common Stock

	
 

	
Following confirmation and
 consummation of the Plan, the Reorganized Debtors shall continue to exist as
 separate corporate or limited liability company entities in accordance with
 the laws of their respective states of incorporation or formation and
 pursuant to their respective organizational documents in effect prior to the
 Effective Date, except to the extent such organizational documents are
 amended pursuant to the Plan. Such amendments to the organizational documents
 for each Debtor shall include, among other things, provisions, to the extent
 necessary or appropriate, effectuating the provisions of the Plan to assure
 that Reorganized USSP continues to be a U.S. Citizen, and such other
 provisions as may be agreed prior to confirmation by the Debtors and a
 steering committee consisting of (i) two persons appointed by a majority-in-interest
 of the Requisite Senior Lenders (the “Senior Representatives”),
 and (ii) one person appointed by a majority-in-interest of the Requisite
 Second Lien Noteholders (the “Second Lien Representative” and, together with the
 Senior Representatives, the “Steering Committee”). The Steering Committee shall,
 after reasonable notice to all three members, act by majority vote of the
 persons present at any meeting of the Steering Committee; provided that at
 least a majority of members of the Steering Committee must be present at any
 meeting in order for valid action to be taken by the Steering Committee; and
 provided further that in the event of a tie vote, the chairman shall have the
 tie breaking vote. If a member of the Steering Committee sells a majority in
 amount of its position it shall resign as a member of the Steering Committee.
 If there be a resignation the slot shall be filled by a majority-in-interest
 of the Requisite Senior Lenders (in the case of a Senior Representative) and
 by majority-in-interest of the Requisite Second Lien Noteholders (in the case
 of the Second Lien Representative).

	
 

	
 

	
 

	
 

	
 

	
The charter and/or bylaws
 of Reorganized USSP or a stockholder agreement to be entered into by (or
 deemed by Court order to be binding upon) all material holders of New Common
 Stock shall (a) set forth certain restrictions relating to the transfer of
 shares of Reorganized USSP for Jones Act and securities law purposes, and to
 preserve valuable tax attributes, (b) regulate the membership of the new
 Board of Directors of Reorganized USSP (the “New Board”) and officers to such
 extent as will assure the preservation of Reorganized USSP’s status as a
 United States Citizen within the provisions of U.S. Coastwise Trade Laws, (c)
 limit the acquisition by any one person or group of persons acting in concert
 of beneficial ownership of more than thirty percent (30%) of the New Common
 Stock (subject to a pre-emergence grandfather clause) unless such person or
 group simultaneously offers to acquire all the outstanding New Common Stock
 and Warrants, (d) prohibit the distribution of dividends by Reorganized USSP
 (and certain other restricted payments) prior to the payment in full of the
 New Term Loan, (e) prohibit the distribution of dividends on the Class B New
 Common Stock until the holders of Class A New Common Stock have received
 their Priority Distribution Amount, (f) require that following the payment in
 full of the New Term Loan (or any refinancing thereof) Reorganized USSP make
 annual distributions on the Class A New Common Stock in an amount equal to
 20% of the Priority Distribution Amount, and (g) prohibit Reorganized USSP
 from incurring indebtedness that would limit or prevent payment of the
 Priority Distribution Amount other than indebtedness used to refinance the
 New Term Loan as long as the principal amount of such indebtedness did not
 exceed the principal amount of the New Term Loan that was refinanced.

20

	
 

	
 

	
 

	
 

	
 

	
All New Board decisions on
 significant corporate events, including sale, acquisition or disposition of
 non-immaterial assets and initiating any initial public offering of
 Reorganized USSP will comply with Delaware law and require the approval of at
 least a majority of the non-management directors who are U.S. Citizens (a “Super Majority”).

 All organizational documents and stockholder agreements shall be in form and
 substance acceptable to the Steering Committee, whose consent shall not be
 unreasonably withheld.

	
 

	
 

	
 

	
 

	
 

	
The structure of the
 Reorganized Debtors shall be such that, at all times, the president, chief
 executive officer or chairman will be able to state in an Affidavit of U.S.
 Citizenship that by no means whatsoever is control of more than twenty-five
 percent (25%) of any equity interest in the Reorganized USSP given or
 permitted to be exercised by a person who is not a U.S. Citizen.

	
 

	
 

	
 

	
Equity
 Issuance

	
 

	
Reorganized USSP may not
 issue and sell any additional shares of Class A New Common Stock other than
 upon exercise of the Class A Warrants. Reorganized USSP may not issue and
 sell more than twenty percent (20%) of the outstanding shares of Class B New
 Common Stock of Reorganized USSP (other than upon exercise of the Class B
 Warrants), including pursuant to a registration statement declared effective
 by the Securities and Exchange Commission without the consent of a
 majority-in-interest of the New Common Stock holders, which majority shall
 include a majority-in-interest of the Foreign Holders, whose consent shall
 not be unreasonably withheld; provided that such consent shall not be
 required for equity issued to cure a financial covenant default. Existing
 shareholders (of either class) shall have pre-emptive rights with respect to
 issuances of Class B New Common Stock, other than issuances (i) pursuant to a
 registration statement declared effective by the Securities and Exchange
 Commission and (ii) to effect an acquisition.

	
 

	
 

	
 

21

	
 

	
 

	
 

	
 

	
Warrants

	
 

	
The Warrants to be issued
 to Foreign Holders shall have the following terms:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the exercise price for the
 Warrants shall be equal to the par value of the shares of the common stock
 underlying the Warrant and may be paid in cash or pursuant to a cashless
 exercise procedure;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Warrants shall expire
 on December 31, 2029;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the Warrants may be
 exercised only by an entity that is a U.S. Citizen;

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
the Warrants shall be
 freely transferable to any person, party or entity subject to applicable
 securities laws; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
the Warrants shall include
 antidilution protection in the event of stock dividend, recapitalization,
 stock split or reclassification of the common stock.

	
 

	
 

	
 

	
 

	
 

	
 

	
In addition, the Class A
 Warrants will provide that in the event Reorganized USSP makes a distribution
 in respect of the Priority Distribution Amount, each holder of such Class A
 Warrant will receive a cash payment equal to the amount it would have received
 had it exercised its Class A Warrant immediately prior to such distribution
 being made and had owned Class A New Common Stock as the time such
 distribution was being made.

	
 

	
 

	
 

	
 

	
III.          Summary
 of Proposed Terms of New Term Loan

	
 

	
 

	
 

	
 

	
New Term
 Loan:

	
Term loan involving two
 ranked tranches of debt with an aggregate principal amount of $300 million.
 The first tranche of the New Term Loan (the “New Senior Debt”) will be in the
 aggregate amount of approximately $225 million and the second tranche of the
 New Term Loan (the “New
 Junior Debt”) will be in the aggregate amount of approximately
 $75 million. USSP and the Steering Committee may by agreement alter the
 allocation of the New Term Loan between the New Senior Debt and the New
 Junior Debt prior to confirmation of the Plan, in consultation within their
 tax advisors. If any such adjustment occurs the interest rate on the New
 Senior Debt will be adjusted up or down such that the projected interest
 obligation on the New Senior Debt would be the same as if the New Senior Debt
 has $225 million in principal and interest rate specified below.

	
 

	
 

	
Borrowers/

 Guarantors:

	
USSP (on or after the
 Effective Date), USS Chartering LLC, USCS Chemical Pioneer Inc., USCS
 Charleston Chartering LLC, USCS Charleston LLC, USS Product Manager LLC, USS
 JV Manager Inc., USS ATB 1 LLC, USS ATB 2 LLC, USS ATB 3 LLC, USS M/V Houston
 LLC, ITB New York LLC, ITB Baltimore LLC, ITB Mobile LLC, USCS ATB LLC, USCS
 Sea Venture LLC, ITB Philadelphia LLC, USCS Chemical Chartering LLC, USS
 Vessel Management LLC and USS Product Carriers LLC (collectively, the “Reorganized
Debtors”).7

	
 

	
 

	
Ratings:

	
The Company shall apply
 for and use its reasonable best efforts to obtain private letter ratings from
 Standard & Poors and Moody’s within two months following the Effective
 Date and use its reasonable best efforts to maintain them thereafter.

	
 

	
 

	
 

	
 

	
7
 The Debtors may elect to dissolve or merge out of existence one or more of
 these entities at the Effective Date.

	
 

22

	
 

	
 

	
 

	
Lenders:

	
 

	
New Term Lenders.

	
 

	
 

	
 

	
Maturity:

	
 

	
The New Term Loan will
 mature on August 7, 2013 (the “Maturity Date”).

	
 

	
 

	
 

	
Interest
 Rate and 

 Payment Dates:

	
 

	
Interest under the New
 Senior Debt shall be paid quarterly at LIBOR plus seven and three-tenths
 percent (7.3%), subject to a two percent (2%) LIBOR floor. Interest under the
 New Junior Debt shall be paid quarterly at LIBOR plus five-tenths percent
 (0.5%), subject to a two percent (2%) LIBOR floor.

	
 

	
 

	
 

	
 

	
 

	
The US Shipping entities
 are considering purchasing one or more LIBOR caps on a portion of the New
 Term Loan and will do so if requested by the Requisite Senior Lenders and
 each such cap can be obtained on commercially reasonable terms.

	
 

	
 

	
 

	
Default
 Rate:

	
 

	
Upon the occurrence and
 during the continuance of any event of default (including, without
 limitation, in respect of letters of credit), interest shall be payable on
 demand at a default rate in an amount equal to two percent (2%) over the then
 applicable interest rate.

	
 

	
 

	
 

	
Amortization:

	
 

	
With respect to the New
 Senior Debt, no amortization prior to the completion of the first full year
 following the Effective Date other than pursuant to the Excess Cash Sweep (as
 defined below), and amortization of one quarter of one percent (0.25%) of the
 New Senior Debt per quarter beginning on the last day of the first full
 fiscal quarter following completion of the first full fiscal year following
 the Effective Date. With respect to the New Junior Debt, no amortization
 prior to the payment in full of the New Senior Debt, and amortization of one
 quarter of one percent (0.25%) of the New Junior Debt per quarter beginning
 on the last day of the first full fiscal quarter following payment in full of
 the New Senior Debt. The balance of the New Term Loan shall be payable on the
 Maturity Date.

23

	
 

	
 

	
 

	
Excess Cash Sweep:

	
 

	
Cash flow
 sweep of one hundred percent (100%) of the Excess Cash Flow (as defined
 below), over and above (i) a $25 million cash balance for the first twelve
 (12) months after the Effective Date and (ii) a $20 million cash balance after
 the first twelve (12) months after the Effective Date (provided that such $20
 million cash balance shall be reduced or increased (though never to exceed
 $20 million) by $2 million for each vessel that is removed or added to
 service following the Effective Date), to prepay the outstanding principal
 amount of the New Term Loan. “Excess Cash Flow” shall mean
 EBITDA in the previous quarter plus net proceeds (after deducting reasonable
 and customary costs of sale) from any vessel sales minus (i) interest and fee
 payments on the New Term Loan and letter of credit fees, (ii) any and all
 cash drydocking costs in previous quarter, budgeted cash drydocking costs for
 the next three quarters and all cash capital costs associated with the 4th
 ATB not funded from cash escrow, (iii) necessary and appropriate repair and
 maintenance costs to the extent such amounts are not already included in the
 determination of EBITDA, (iv) any cash taxes paid in such quarter, (v)
 scheduled amortization payments on the New Term Loan and (vi) any amounts
 used to repurchase New Term Loan Notes (as defined below) as provided in
 “Repurchase of New Term Loan Notes” below. The sweeps of the Excess Cash Flow
 shall be used to repay the New Senior Debt until such debt has been repaid in
 full at which time the sweeps of the Excess Cash Flow shall be used to repay
 the New Junior Debt until such debt has been repaid in full at which time the
 Excess Cash Sweeps shall terminate. In addition to the foregoing, no Excess
 Cash Sweep shall deplete cash reasonably expected by the Company to be
 required to pay its drydocking expenses for the following three quarters.

	
 

	
 

	
 

	
Repurchase of New

 Term Loan Notes:

	
 

	
The
 Reorganized Debtors shall be allowed to use up to 35% of Excess Cash Flow (as
 defined above but excluding clause (vi)) to repurchase New Term Loan Notes in
 the open market as long as (i) the purchase price is no more than 85% of the
 face amount of the New Term Loan Notes repurchased and (ii) such repurchase
 will not result in the rating agencies putting the Reorganized Debtors on
 “selective default”. Such repurchased notes are to be treated as permanently
 retired for all purposes including, but not limited to, interest payments,
 principal payments, and voting. Furthermore, any gain recorded on such repurchase
 is not to be included in any covenant calculation. In addition, no New Term
 Loan Notes relating to New Junior Debt shall be repurchased while there are
 any outstanding obligations with respect to the New Senior Debt.

	
 

	
 

	
 

	
Collateral:

	
 

	
The New Term
 Loan will be secured by all or substantially all of the Reorganized Debtors’
 assets (other than as to de minimis
 assets where it would not be cost-effective to do so). The lien on the
 Reorganized Debtors’ assets securing the New Junior Debt shall be subordinate
 to the lien securing the New Senior Debt.

24

	
 

	
 

	
 

	
Representations,

 Covenants, Events of

 Default, etc.:

	
 

	
All
 representations, covenants, events of default, voting requirements,
 indemnifications, assignment provisions and other terms and provisions of the
 loan agreement under which the New Term Loan is to be issued shall be
 consistent with the similar provisions in the First Lien Credit Agreement and
 otherwise in form and substance reasonably acceptable to the Senior
 Representatives, except that (i) there shall be no other indebtedness for
 borrowed money, whether or not secured, provided that indebtedness
 constituting a capital lease arising from a sale/leaseback transaction
 approved by the agent for the New Term Loan (such approval not to be
 unreasonably withheld) where the net proceeds of such transaction are used to
 prepay the New Term Loan shall not be considered indebtedness for borrowed
 money, and (ii) the only financial covenants shall be a four quarter rolling
 (A) interest coverage test (EBITDA/net interest) with a minimum ratio of one
 and a half times (1.5x) and (B) a debt to EBITDA coverage ratio to be
 determined (but consistent with the interest coverage test and the
 projections provided by USSP to the Senior Secured Lenders), which covenants
 shall only be measured beginning with the fourth full fiscal quarter
 following the Effective Date; provided that if the Reorganized Debtors are in
 default of either or both of these covenants, they shall be permitted to cure
 such default by issuing equity securities representing not more than 25% of
 the outstanding New Common Stock on a fully-diluted basis (calculated as if
 all outstanding Warrants had been exercised) after giving effect to such
 issuance and using the proceeds thereof to repay the New Term Loan in an
 amount such that after giving effect to such repayment as if it had occurred
 on the measurement date the Reorganized Debtors were in compliance with such
 financial covenant(s).

	
 

	
 

	
 

	
 

	
 

	
Reorganized
 USSP shall be prohibited, without the prior consent of the Agent for the New
 Term Loan lenders, from making capital expenditures other than capital
 expenditures (i) for dry docks and UWILD inspections, (ii) as necessary to
 maintain all existing assets in a proper condition as required by law or
 customers or (iii) as set forth in a capital expenditures budget approved by
 the New Board and consented to by the Agent for the New Term Loan lenders,
 such consent not to be unreasonably withheld.

	
 

	
 

	
 

	
Transfer Restriction

	
 

	
The transfer
 of the New Junior Secured Term Notes will be subject to certain transfer
 restrictions that are designed to protect the availability of the Reorganized
 Debtors net operating losses and other tax attributes.

IV.          Treatment
of Claims and Interests 

	
 

	
 

	
 

	
 

	
•

	
Administrative Expense
Claims

	
 

	
Except to
 the extent that a holder entitled to payment agrees to a less favorable
 treatment, or has been paid prior to the Effective Date, in whole or in part,
 on the latest of (i) the Effective Date, (ii) the date on which its claim
 becomes an allowed, or (iii) the date on which its claim becomes payable
 under any agreement relating thereto, or as soon as practicable thereafter,
 each holder of an allowed administrative expense claim shall receive, in full
 satisfaction, settlement, and release of and in exchange for such claim, cash
 equal to the unpaid portion of its claim without interest. Notwithstanding
 the forgoing, (a) any allowed administrative expense claim based on a
 liability incurred by the Debtors in the ordinary course of business by the Debtors
 shall be paid in full and performed by the Debtors or Reorganized Debtors, as
 the case may be, in the ordinary course of business in accordance with the
 terms and conditions of any agreements governing, instruments evidencing or
 other documents relating to such transactions, and (b) any allowed
 administrative expense claim may be paid on such other terms as may be agreed
 on between the holder of such Claim and the Debtors; provided, further, that if any such
 ordinary course expense is not billed or a request for payment is not made
 within ninety (90) days after the Effective Date, such ordinary course
 expense shall be barred.

25

	
 

	
 

	
 

	
 

	
•

	
Secured Tax and Priority

 Tax Claims

	
 

	
Except to
 the extent that a holder agrees to a different treatment or has been paid
 prior to the Effective Date, each holder of an allowed secured tax claim or
 priority tax claim shall, in full satisfaction, release, and discharge of
 such claim, receive at the Debtors’ option: (a) cash, paid in full,
 representing the full amount (without interest) of such holder’s unpaid claim
 on or as soon as reasonably practicable following the later to occur of (x)
 the Effective Date, and (y) the date on which such claim becomes allowed; or
 (b) receive such other terms determined by the Bankruptcy Court to provide
 the holder deferred cash payments having value, as of the Effective Date,
 equal to such claim. Upon payment and satisfaction in full of all allowed
 secured tax claims and priority tax claims, all liens and security interests
 granted to secure such obligations, whether in these chapter 11 cases or
 otherwise, shall be terminated and of no further force or effect.

	
 

	
 

	
 

	
 

	
•

	
Professional

 Compensation and

 Reimbursement Claims

	
 

	
All entities
seeking awards by the Bankruptcy Court of compensation for services rendered
or reimbursement of expenses incurred through and including the date on which
the Plan is confirmed under sections 330, 331, 503(b)(2), 503(b)(3),
503(b)(4) or 503(b)(5) of the Bankruptcy Code shall (a) file, on or before
the date that is sixty (60) days after the Effective Date their respective
applications for final allowances of compensation for professional services
rendered and reimbursement of expenses incurred and (b) be paid in full
without interest, in cash, in such amounts as are allowed by the Bankruptcy
Court in accordance with the order relating to or allowing any such claim or
upon such other terms as may be mutually agreed upon between the holder of
such claim and the Debtors. The Reorganized Debtors are authorized to pay compensation
for services rendered or reimbursement of expenses incurred after the date of
confirmation of the Plan (the “Confirmation Date”)
in the ordinary course of business and without the need for
Bankruptcy Court approval. 

	
 

	
 

	
 

	
 

	
•

	
Priority Non-Tax Claims

	
 

	
Except to
 the extent that a holder (i) has been paid by the Debtors, in whole or in
 part, prior to the Effective Date, or (ii) agrees to a less favorable
 treatment, each holder of an allowed priority non-tax claim shall receive, in
 full satisfaction of such claim, cash in the full amount of the claim
 (without interest), on or as soon as reasonably practicable after the later
 of (a) the Effective Date, or as soon thereafter as reasonably practicable,
 and (b) the date such claim becomes allowed.

26

	
 

	
 

	
 

	
 

	
 

	
Secured Claims

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
Allowed First Lien

 Secured Claims

	
 

	
Under the Plan, claims arising
under the First Lien Credit Agreement (the “Senior Secured Claims”) shall be
allowed, not subject to offset, defense, counterclaim, reduction or
credit of any kind whatsoever, in an amount equal to the sum of (i) the
aggregate principal amount outstanding under the First Lien Credit Agreement
(approximately $332.6 million) as of April 29, 2009, the date of filing of
the chapter 11 cases (the “Commencement Date”), plus (ii) principal amounts
drawn on the Letters of Credit from the Commencement Date through the
Effective Date, plus (iii) an amount equal to the termination obligation in
respect of ISDA Master Agreements governing certain interest rate swaps, plus
(iv) accrued and unpaid letter of credit fees and administrative fees through
the Commencement Date, plus (v) other unpaid amounts due under the First Lien
Credit Agreement, including, without limitation, unpaid cash and PIK interest
through and including the record date for voting on the Plan. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Senior Secured Lenders
 will receive in full, complete and final satisfaction of the Senior Secured
 Claims the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a) 

	
Secured term loan notes in connection with the New Term Loan with respect
to both the New Senior Debt and the New Junior Debt (collectively, the “New Term Loan Notes”) in a principal
amount equal to such holder’s pro rata share in each tranche of debt with
respect to the New Term Loan (the Senior Secured Lenders, in their capacity
as the holders of the New Term Loan Notes, being referred to as the “New Term Lenders”);  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b) 

	
The Senior Secured Lenders will receive shares of Class A New Common
 Stock and Class A Warrants as set forth under “II. Proposed Restructuring—Equity
 Ownership” above; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c) 

	
The pre-petition letters of credit under the First Lien Credit
 Agreement that are outstanding as of the Effective Date shall be replaced and
 returned to the Administrative Agent as issuing bank, marked “canceled” or,
 to the extent Reorganized Debtors are unable to replace any of such letters
 of credit, such letter of credit shall be (a) secured by a back-to-back
 letter of credit issued by an institution acceptable to the Administrative
 Agent equal to 105% of the face amount of such letters of credit or
 (b) cash collateralized in an amount equal to 105% of the face amount of
 such letters of credit by the deposit of cash in such percentage amount in an
 account designated by the Administrative Agent, as issuing bank, which cash
 will be remitted to the Reorganized Debtors upon the expiration, cancellation
 or other termination or satisfaction of the reimbursement obligations in
 respect of such letters of credit.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Debtors
 shall pay in cash, without interest, the fees and the reasonable
 out-of-pocket expenses (including, without limitation, reasonable fees and
 expenses of attorneys and advisors) incurred by, and administration fees
 payable to, the Administrative Agent in their capacity as administrative
 agent under the First Lien Credit Agreement, in each case to the extent not
 reimbursed on or prior to the Effective Date, without the necessity of filing
 a fee application or any other application of any kind or nature with the
 Bankruptcy Court.

27

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Debtors
 shall pay in cash, without interest, the fees and the reasonable
 out-of-pocket expenses (including, without limitation, reasonable fees and
 expenses of attorneys and advisors) incurred by, and administration fees
 payable to, the Collateral Agent, in each case to the extent not reimbursed
 on or prior to the Effective Date, without the necessity of filing a fee
 application or any other application of any kind or nature with the
 Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 prepetition and postpetition fees and expenses of Pillsbury Winthrop Shaw
 Pittman LLP, counsel to the chairman of the Steering Committee, up to a
 maximum of $650,000, shall be paid in cash on the Effective Date by the
 Reorganized Debtors, without the need for application to, or approval of, the
 Bankruptcy Court. Reorganized USSP shall pay the reasonable post-Effective
 Date fees and expenses of Pillsbury (if any) reasonably needed to effectuate
 the Plan.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The fees and
 expenses of counsel to the Senior Secured Lenders in connection with the
 documentation of the New Term Loan, which counsel shall be chosen by the
 Senior Representatives and reasonably acceptable to USSP, and shall be paid
 in cash on the Effective Date by the Reorganized Debtors, without the need
 for application to, or approval of, the Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
•

	
Allowed Second Lien

 Noteholder Claims

	
 

	
Under the Plan, claims arising
 under the Second Lien Indenture (the “Second Lien Secured Claims”) shall be
allowed, not subject to
 offset, defense, counterclaim, reduction or credit of any kind whatsoever, in
 the amount of $100,000,000 (representing the amount of principal outstanding under
 the Second Lien Indenture), plus prepetition accrued and unpaid interest.
 Each Second Lien Noteholder shall receive, in full, complete and final
 satisfaction of its Second Lien Secured Claim, shares of Class B New
 Common Stock and Class B Warrants as set forth under “II. Proposed
 Restructuring—Equity Ownership” above. If USSP and the Steering Committee
 agree, the Second Lien Secured Claims may be permitted a deficiency claim to
 be treated as a general unsecured claim.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 prepetition and postpetition fees and expenses of the Indenture Trustee,
 including administrative and professional fees and expenses (including the
 fees and expenses of Seward &Kissel LLP as primary Indenture Trustee’s
 counsel), shall be paid in cash on the Effective Date by the Reorganized
 Debtors, without the need for application to, or approval of, the Bankruptcy
 Court.

28

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 prepetition and postpetition fees and expenses of Bracewell & Giuliani
 LLP, counsel to the Second Lien Representative and special co-counsel to the
 Indenture Trustee, up to a maximum of $450,000 (including within such
 $450,000 reimbursement of the fees and expenses of Blank Rome LLP as special
 maritime counsel to Second Lien Representative, up to a maximum amount of
 $15,000), shall be paid in cash on the Effective Date by the Reorganized
 Debtors, without the need for application to, or approval of, the Bankruptcy
 Court. In addition, Reorganized USSP shall pay the reasonable post-Effective
 Date fees and expenses of Bracewell (if any) reasonably needed to effectuate
 the Plan.

	
 

	
 

	
 

	
 

	
 

	
•

	
Other Secured Claims

	
 

	
Except to
 the extent that a holder agrees to a less favorable treatment, on the
 Effective Date, at the sole option of the Debtors, (i) each Allowed Other
 Secured Claim shall be reinstated and rendered unimpaired in accordance with
 section 1124(2) of the Bankruptcy Code, or (ii) each holder of an Allowed
 Other Secured Claim shall receive, in full satisfaction of such Claim, either
 (a) a note with periodic Cash payments having a present value equal to the
 amount of such holder’s Allowed Other Secured Claim, (b) the proceeds of the
 sale or disposition of its Collateral securing such Claim to the extent of
 the value of the holder’s secured interest in such Collateral, (c) the
 Collateral securing such Claim and any interest on such Claim required to be
 paid pursuant to section 506(b) of the Bankruptcy Code, or (d) such other
 distribution as necessary to satisfy the requirements of the Bankruptcy Code.

	
 

	
 

	
 

	
 

	
 

	
Unsecured Claims

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
General Unsecured

	
 

	
Amount
 payable on general unsecured claims to be agreed between the Debtors and the
 Steering Committee, but not to exceed $100,000 unless the Debtors and the
 Steering Committee in their judgment conclude that it would be cost effective
 to agree to a higher number.

	
 

	
 

	
 

	
 

	
 

	
•

	
Insured Claims

	
 

	
A holder of
 an allowed claim that is an insured claim shall be paid in the ordinary
 course of the business of the Reorganized Debtors from the proceeds of any
 insurance policy covering such claims maintained by or for the benefit of the
 Debtors or the Reorganized Debtors.

	
 

	
 

	
 

	
 

	
 

	
Equity Interests

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
USSP Prepetition Equity

 Interests

	
 

	
On the
 Effective Date, all USSP Prepetition Equity Interests shall be deemed
 cancelled and extinguished and the holders of USSP Prepetition Equity
 Interests shall not be entitled to, and shall not receive or retain, any
 property or interest in property on account of such Prepetition Equity
 Interests under the Plan. Holders of USSP Prepetition Equity Interests shall
 not be required to surrender their certificates or other interests evidencing
 ownership of such Prepetition Equity Interests.

	
 

	
 

	
 

	
 

	
 

	
•

	
GP Prepetition Equity

 Interests

	
 

	
On the
 Effective Date, all prepetition equity interests in USSGP (“GP Prepetition Equity Interests”)
 shall be deemed cancelled and extinguished and the holders of GP Prepetition
 Equity Interests shall not be entitled to, and shall not receive or retain,
 any property or interest in property on account of such Prepetition Equity
 Interests under the Plan. Holders of GP Prepetition Equity Interests shall
 not be required to surrender their certificates or other interests evidencing
 ownership of such Prepetition Equity Interests.

29

V.          Cash
Collateral

	
 

	
 

	
 

	
 

	
Cash Collateral

	
 

	
The Debtors
 will enter into a stipulation (the “Cash Collateral Stipulation”) with the
 Collateral Agent regarding the use of cash collateral to satisfy the ongoing
 working capital requirements of the Company during these chapter 11 cases on
 terms and conditions acceptable to the Senior Representatives, whose consent
 shall not be unreasonably withheld.

	
 

	
 

	
 

	
Adequate Protection

	
 

	
Pursuant to
 sections 361, 362, 363(c) and 507 of the Bankruptcy Code, the Collateral
 Agent, in each case for the benefit of
 itself and the Senior Secured Lenders, shall be granted the
 following adequate protection (the “Adequate Protection”) of the prepetition
 security interests of the Senior Secured Lenders, for, and equal in amount
 to, the diminution in the value (the “Diminution in Value”) of the pre-petition
 security interests of the Senior Secured Lenders, calculated in accordance
 with section 506(a) of the Bankruptcy Code, whether or not such Diminution in
 Value results from the sale, lease or use by the Debtors of the collateral
 securing the First Lien Credit Agreement (including, without limitation, cash
 collateral (as defined in Section 363(a) of the Bankruptcy Code)), or the
 stay of enforcement of any prepetition security interest arising from section
 362 of the Bankruptcy Code, or otherwise.

	
 

	
 

	
 

	
 

	
 

	
(a) 

	
Adequate Protection Lien. As security for
and solely to the extent of the Diminution in Value of the prepetition
security interests of Collateral Agent, the Collateral Agent shall be
granted, effective and perfected as of the date the stipulation ordering the
use of Cash Collateral has been entered with the Bankruptcy Court (the “Cash Collateral Stipulation”), and
without the necessity of the execution of mortgages, security agreements,
pledge agreements, financing statements or other agreements, a security
interest in and lien on the Collateral (as defined in the First Lien Credit
Agreement) (the “Adequate Protection Liens”),
which Adequate Protection Liens shall rank in the same relative priority and
right as do the security interests and liens of the Collateral Agent.  

	
 

	
 

	
 

	
 

	
 

	
 

	
(b) 

	
Super-Priority Claim. To the extent of any
 Diminution in Value of the prepetition security interests of the Collateral
 Agent, the Collateral Agent shall be granted a superpriority administrative
 expense claim as provided for in section 507(b) of the Bankruptcy Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Interest. As additional adequate protection,
 the Senior Secured Lenders shall receive cash payments of interest accruing
 on the principal amount of the loans outstanding under the First Lien Credit
 Agreement at the Commencement Date at LIBOR plus fifty basis points. Interest
 shall be paid quarterly in arrears on the last day of each calendar quarter
 prior to the Effective Date and on the Effective Date.

30

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 Indenture Trustee, for the benefit of itself and each of the Second Lien
 Noteholders, shall also be granted each of the foregoing forms of adequate
 protection other than interest payments provided in clause (c), in all cases
 subject to the limitations, subordination provisions and other terms and
 conditions of the Intercreditor Agreement dated as of August 7, 2006,
 between, among others, the Administrative Agent, the Collateral Agent and the
 Indenture Trustee.

	
 

	
Termination Date

	
 

	
The earliest
 of (x) the Effective Date; (y) the date on which Cash Collateral is used in a
 manner contrary to the Cash Collateral Stipulation; and (z) November 16,
 2009.

VI.          Other
Plan Provisions

	
 

	
 

	
 

	
Releases and Exculpation

	
 

	
The Debtors
 will release their respective current and former officers and directors, the
 Senior Secured Lenders, the Second Lien Noteholders, the Administrative
 Agent, the Collateral Agent, the Indenture Trustee, the Senior Representatives,
 the Second Lien Representative, and the respective officers, directors,
 employees, agents, advisors, and professionals of each of the foregoing,
 including the Debtors (all of the foregoing the “Releases”), from all claims arising
 before the Effective Date other than claims (i) based upon willful
 misconduct, intentional fraud, or criminal conduct as determined by a final
 order entered by a court of competent jurisdiction and (ii) claims against
 any Senior Secured Lender and Second Lien Noteholder relating to the
 purported termination of certain of Debtors’ rights and agreements with
 respect to USS Products Investor LLC.

	
 

	
 

	
 

	
 

	
 

	
The Plan
 will include standard exculpation for the Releasees for participating in the
 Debtors’ chapter 11 cases, including any parties’ respective present or
 former officers, directors, employees, agents, and advisors of each of the
 forgoing.

	
 

	
 

	
 

	
 

	
 

	
The Senior
 Secured Lenders and the Second Lien Noteholders will release the Debtors and
 their respective current and former officers, directors, employees, agents,
 advisors, and professionals from all claims arising on or before the
 Effective Date, other than claims (i) based upon willful misconduct,
 intentional fraud, or criminal conduct as determined by a final order entered
 by a court of competent jurisdiction and (ii) claims relating to the
 purported termination of certain of Debtors’ rights and agreements with
 respect to USS Products Investor LLC.

	
 

	
 

	
 

	
 

	
 

	
To the
 extent permitted by applicable law, the Administrative Agent, the Collateral
 Agent, the Indenture Trustee, the Senior Representatives, the Second Lien
 Representative and their respective officers, directors, agents, advisors,
 and professionals shall be released by all creditors and interest holders
 from any and all claims arising at any time.

31

	
 

	
 

	
 

	
 

	
Governance

	
 

	
The New
 Board shall (a) have up to seven (7) members, two (2) of whom shall be
 members of management, at least one (1) of whom shall be independent and
 shall serve as the Chairman of the New Board, and the remainder shall not be
 members of management. The initial New Board shall be appointed by the
 Requisite Senior Lenders (in consultation with (but not subject to the
 consent of) the Second Lien Representative, provided that the New Board shall
 include at least one person proposed by the Second Lien Representative and
 reasonably acceptable to the Senior Representatives, prior to the hearing to
 consider Confirmation of the Plan; and provided further that the Requisite
 Senior Lenders shall use commercially reasonable efforts to appoint as
 directors two individuals (one of whom shall be the chairman) who are not
 affiliated with the Debtors, the Senior Secured Lenders or the Second Lien
 Noteholders and who have relevant industry experience. The members of the New
 Board shall have staggered terms and the New Board shall meet the standards
 of the U.S. Coastwise Trade Laws. 

	
 

	
 

	
 

	
 

	
 

	
 

	
All existing
 corporate governance documents of the Debtors shall be restated as of the
 Effective Date in order to (i) be in compliance with the Bankruptcy Code and
 (ii) to effectuate the provisions of the Plan. For the avoidance of doubt,
 the senior management and the composition of the board of directors of
 Reorganized Debtor (and the term of each director) at the Effective Date
 shall be acceptable to the Steering Committee.

	
 

	
 

	
 

	
 

	
Management Equity Plan

	
 

	
The Plan
 shall provide for a Management Equity Plan of ten percent (10.0%) New Common
 Stock (the “Management
 Equity Plan”), all of which shall be in the form of Class B
 New Common Stock (such Class B New Common Stock, the “MEP Class B New Common Stock”).
 The terms of the Management Equity Plan, including an initial grant of fifty
 percent (50.0%) of the MEP Class B New Common Stock (twenty five percent
 (25%) of which will vest on the Effective Date and the balance of which will
 vest in equal amounts on each of the first, second and third anniversary of
 the Effective Date (subject to immediate vesting in full upon a sale of the
 Reorganized Debtors)), and the reservation of the other fifty percent (50.0%)
 of the MEP Class B New Common Stock for issuance from time to time following
 the Effective Date to persons and upon terms established by the New Board,
 are to be approved as part of the Plan. Management incentive compensation
 shall also be developed and in all events shall be subject to objective
 criteria or certified by independent financial or compensation advisors to be
 consistent with industry comparables

	
 

	
 

	
 

	
 

	
Milestones8

	
 

	
“Milestones”
 shall mean the following milestones related to the Debtors’ Cases:

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The Debtors
shall have filed the Plan and disclosure statement (the “Disclosure Statement”) in support of the
Plan, in form and in substance reasonably acceptable to the Steering
Committee, on or before July 13, 2009. 

	
 

	
 

	 

	
 

	
8
Any of the milestones are subject to the Bankruptcy Court calendar
availability, the milestones set forth in the second, third and fourth bullets
may be automatically extended by either USSP or the Steering Committee for 30
days and may be further modified or extended by agreement of USSP and the
Steering Committee.

32

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The
 Bankruptcy Court shall have held a hearing to consider approval of such
 disclosure statement and confirmation of such plan of reorganization within
 one hundred and fifteen (115) days after the Commencement Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The
 Bankruptcy Court shall have entered an order in form and substance reasonably
 satisfactory to the Steering Committee approving such disclosure statement
 and confirming the Plan within one hundred and seventy five (175) days after
 the Commencement Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The
 substantial consummation (as defined in Section 1101 of the Bankruptcy Code)
 of the Plan occurring and all conditions to the effectiveness of the Plan
 having been satisfied or waived by the Steering Committee on or prior to
 November 16, 2009.

	
 

	
 

	
 

	
 

	
Other Terms and

 Conditions

	
 

	
The Plan and
 the documentation implementing the Plan will contain customary release,
 injunction, discharge, integration, retention of jurisdiction and governing
 law provisions, as well as customary conditions to confirmation and
 effectiveness of the Plan and such other conditions to confirmation and
 effectiveness of the Plan as may be reasonably required by the Steering
 Committee.

	
 

	
 

	
 

	
 

	
 

	
 

	
The Plan and
 all related documentation shall reflect the terms and conditions of this Plan
 Term Sheet to the parties’ mutual satisfaction and shall contain such other
 terms and conditions as the parties mutually agree.

	
 

	
 

	
 

	
 

	
 

	
 

	
This Plan
 Term Sheet will become part of the Plan Support Agreement containing
 customary terms and conditions to be executed by the Company and the
 Requisite Senior Lenders and the Requisite Second Lien Noteholders in support
 of the Plan.

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 distributions on and treatment of claims contemplated herein shall become
 effective and binding only upon the confirmation and effective date of a plan
 under chapter 11 of the Bankruptcy Code which has been voted upon and
 approved in accordance with section 1126(c) of the Bankruptcy Code, and
 confirmed by the Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
The
 Reorganized Debtors shall use their reasonable best efforts to offset any
 cancellation-of-indebtedness income arising from the Plan against all
 available losses. To the extent there is any COD income remaining, the
 Reorganized Debtors shall use their reasonable best efforts to obtain the
 benefits of the new tax legislation permitting a deferral of such income.

	
 

	
 

	
 

	
 

	
 

	
 

	
Each member
 of the Steering Committee shall be acting only in its own interests and shall
 not be liable in any way to any other Senior Secured Lender or Second Lien
 Noteholder other than with respect to willful misconduct, intentional fraud,
 or criminal conduct as determined by a final order entered by a court of
 competent jurisdiction, and shall cease to act as representatives of the Senior
 Secured Lenders and the Second Lien Noteholders, as the case may be, on the
 Effective Date.

33Exhibit 10.2

	
 

	
EXECUTION COPY

	
UNITED
 STATES BANKRUPTCY COURT

	
SOUTHERN
 DISTRICT OF NEW YORK

	
 

	
 

	
 

	
 

	 

	 	
 

	
 

	
X

	 	
 

	
 

	
In re

	 	
 

	
Chapter 11

	
 

	 	
 

	
 

	
U.S.
 SHIPPING PARTNERS L.P., et al.

	 	
 

	
Case No.
 09-12711 (RDD)

	
 

	 	
 

	
 

	
Debtors.

	 	
 

	
(Jointly
 Administered)

	
 

	 	
 

	
 

	 

	 	
 

	
 

	
X

	 	
 

	
 

	
U.S.
 SHIPPING PARTNERS L.P., et al.,

	 	
 

	
 

	
 

	 	
 

	
 

	
                  Plaintiffs,

	 	
 

	
 

	
 

	 	
 

	
 

	
- against -

	 	
 

	
Adv. Proc.
 No. 09-1170 

	
 

	 	
 

	
(RDD)

	
BLACKSTONE
 CORPORATE DEBT

 ADMINISTRATION L.L.C.; CERBERUS PARTNERS, 

 L.P.; STYX PARTNERS, L.P.; A3 FUNDING LP; 

 BLACKSTONE MEZZANINE PARTNERS II USS L.P.; 

 BLACKSTONE MEZZANINE HOLDINGS II L.P.; 

 BLACKSTONE FAMILY INVESTMENT 

 PARTNERSHIP V USS L.P.; BLACKSTONE FAMILY 

 INVESTMENT PARTNERSHIP V L.P.; BLACKSTONE 

 FAMILY INVESTMENT PARTNERSHIP V-A USS 

 SMD L.P.; BLACKSTONE PARTICIPATION 

 PARTNERSHIP V L.P.; BLACKSTONE 

 PARTICIPATION PARTNERSHIP V USS L.P.; 

 BLACKSTONE FAMILY INVESTMENT 

 PARTNERSHIP V-A L.P.; and BLACKSTONE 

 CAPITAL PARTNERS V USS L.P.,

	 	
 

	
 

	
 

	 	
 

	
 

	
                  Defendants.

	 	
 

	
 

	
X

	 	
 

	
 

	 

	 	
 

	
 

SETTLEMENT AGREEMENT AND RELEASE

                    This
Settlement Agreement and Release (the “Agreement”), dated as of July 10, 2009,
is entered into by and among U.S. Shipping Partners L.P. (“USSP”), USS
Product Manager LLC (“Product Manager”), USS Product Carriers LLC (“Product
Carriers”), USS PC Holding Corp. (collectively, the “Debtors”),
Blackstone Corporate Debt Administration L.L.C., Blackstone Capital Partners V
USS L.P., Blackstone Family Investment Partnership V USS L.P., Blackstone
Family Investment Partnership V-A USS SMD L.P., Blackstone Participation
Partnership V USS L.P., Blackstone Mezzanine Partners II USS L.P., Blackstone
Mezzanine Holdings II USS L.P., Blackstone Family Mezzanine Partnership II USS
SMD L.P., Cerberus Partners, L.P., Styx Partners, L.P., and A3 Funding LP
(collectively, the “Blackstone/Cerberus Parties”9) and USS Products
Investor LLC (“Products Investor”) (taken together, the “Parties”): 

RECITALS

                    WHEREAS,
on March 14, 2006, Product Carriers entered into a contract with the National
Steel and Shipbuilding Company (“NASSCO”), which was subsequently
amended and restated (the “Construction Contract”), under which NASSCO
would construct nine double-hulled tankers for USSP; 

                    WHEREAS,
on August 7, 2006, Product Carriers and certain of the Blackstone/Cerberus
Parties agreed to form a joint venture (the “Joint Venture”) to finance
the construction of the first five NASSCO vessels (the “Vessels”);

                    WHEREAS,
Products Investor was formed for the purpose of carrying out the Joint Venture;

                    WHEREAS,
some or all of the Parties entered into various additional agreements to
accomplish the Joint Venture’s goals, including but not limited to a Limited
Liability Company Agreement (the “LLC Agreement”), dated August 7, 2006,
a Revolving Notes Facility Agreement (the “Credit Agreement”), dated
August 7, 2006, and a Management and Operating Agreement (the “Management
Agreement”), dated August 7, 2006;

	
 

	
 

	 
	
 

	
9
 For purposes of this Agreement, the Blackstone/Cerberus Parties are
 understood and agreed to encompass all Blackstone and Cerberus entities that
 are currently Class A Members (as defined below) and/or lenders pursuant to
 the Credit Agreement (as defined below).

35

                    WHEREAS,
pursuant to the LLC Agreement, certain of the Blackstone/Cerberus Parties are “Class
A Members” and Product Carriers is the “Class B Member,” and Product
Carriers was appointed as Products Investor’s initial Managing Member;

                    WHEREAS,
pursuant to the Management Agreement, Product Manager was appointed to act as
manager of the Vessels (“Vessel Manager”) and was responsible for, among
other things, construction oversight, chartering the Vessels, and the crewing,
management, maintenance and repair of the Vessels;

                    WHEREAS,
in February 2009, the Blackstone/Cerberus Parties sent a series of letters
notifying Product Manager and Product Carriers that they were taking certain
actions under the operative agreements (i.e.,
the Management Agreement, the LLC Agreement and the Credit Agreement),
including, among other things, (a) declaring an Event of Default under the
Credit Agreement; (b) terminating Product Manager as Vessel Manager; (c)
removing Product Carriers as Managing Member and designating Blackstone Capital
Partners V USS L.P. as the new Managing Member; and (d) advising Products
Investor that it was commencing foreclosure proceedings on certain of its
assets (collectively, the “February Actions”); 

                    WHEREAS,
Product Carriers and Product Manager sent corresponding objections to the
February Actions to the Blackstone/Cerberus Parties;

                    WHEREAS,
on April 3, 2009, Product Carriers and Product Manager filed an action (the “State
Court Action”), USS Product Carriers LLC
and USS Product Manager LLC v. Blackstone Corporate Debt Administration L.L.C.
et al. (Index No. 601038/2009), in the Supreme Court of the State of
New York, County of New York, seeking a declaration that the February Actions
were unauthorized and invalid and, pending a final determination of the State
Court Action, seeking a preliminary injunction to prevent the
Blackstone/Cerberus Parties from exercising their claimed rights under the
operative agreements;

36

                    WHEREAS,
on April 8, 2009, the Blackstone/Cerberus Parties filed an Answer and
Counterclaim, together with a Cross-Motion for Preliminary Injunction seeking
to enjoin Product Carriers and Product Manager from holding themselves out as
Managing Member and Vessel Manager for Products Investor, and from interfering
with any foreclosure on Products Investor’s assets;

                    WHEREAS,
pending a hearing on Product Carriers’ and Product Manager’s motion for the
preliminary injunction, Product Carriers, Product Manager and the
Blackstone/Cerberus Parties agreed to a temporary restraining order restraining
the Blackstone/Cerberus Parties from (i) foreclosing upon the vessel Golden State or the membership interests
in the Joint Venture’s subsidiary that owns the vessel except upon five
business days prior notice, which notice could not be given before May 1, 2009,
or (ii) replacing Product Manager as vessel manager of the vessel Golden State and the other four vessels
currently being constructed for the Joint Venture prior to May 7, 2009, with
notice of replacement, if any, to be given at least five business days prior to
such replacement;

                    WHEREAS,
Debtors commenced their voluntary cases under chapter 11 of title 11 of the
United States Code, 11 U.S.C. §§ 101 et seq., as amended
(the “Bankruptcy Code”), on April 29, 2009 (the “Petition Date”)
in the United States Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”), Case No. 09-12711 (RDD) (Jointly
Administered);

37

                    WHEREAS,
on the Petition Date, Debtors filed an adversary proceeding, entitled U.S. Shipping Partners, L.P., et al. v. Blackstone
Corporate Debt Administration L.L.C. et al., No. 09-1170 (RDD) (the
“Adversary Proceeding”), and removed the State Court Action to United
States District Court for the Southern District of New York, which was
subsequently referred to the Bankruptcy Court (No. 09-1175 (RDD)); 

                    WHEREAS,
by Motion dated April 29, 2009, the Debtors sought (a) entry of an order
enforcing the automatic stay of section 362 of the Bankruptcy Code against the
Blackstone/Cerberus Parties from, inter alia,
foreclosing upon the assets of the Joint Venture and interfering with the
Debtors’ functioning as Managing Member of the Joint Venture, and (b) if the
automatic stay did not apply, the issuance of a preliminary injunction pursuant
to section 105 of the Bankruptcy Code, and on April 30, 2009, Product Carriers,
Product Manager and the Blackstone/Cerberus Parties stipulated to the entry of
a temporary restraining order pending a hearing on the preliminary injunction
request;

                    WHEREAS,
mutually desiring to avoid the burdens, risks and expenses of potential
litigation between themselves, the Parties have entered into this Agreement to
facilitate a full and final resolution and settlement of the Adversary
Proceeding and the State Court Action, and to fully and finally resolve and
settle any and all disputes between themselves; 

                    WHEREAS,
the Debtors have considered the benefit to the Debtors’ estates and creditors
that will be received as a result of the settlement of the Adversary Proceeding
and the State Court Action, particularly in light of the costs, uncertainties
and risks of further litigation, and have concluded that the settlement
contained herein is (i) fair and equitable, (ii) a reasonable resolution of the
Adversary Proceeding and the State Court Action, and (iii) in the best
interests of the Debtors, their estates, their creditors, and all other
parties-in-interest;

                    WHEREAS,
the Parties desire to set forth detailed terms for the settlement that was set
forth on the Bankruptcy Court record by the Parties on June 3, 2009,

38

                     NOW,
THEREFORE, in consideration of the foregoing, the covenants and releases
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties agree as follows:

                    1.     Bankruptcy
Court Approval/Effective Date. (a) This Agreement is subject to approval by
the Bankruptcy Court under Rule 9019 of the Federal Rules of Bankruptcy
Procedure (“Rule 9019”) and Sections 363(b) and (f) of the Bankruptcy
Code. If the Effective Date (as defined below) does not occur and this
Agreement is terminated, neither this Agreement, its terms, any affidavits
filed in support of this Agreement, correspondence regarding it, nor any
negotiations in connection with this Agreement shall be, or be construed as or
deemed to be, evidence of or an admission by or against any Party or admissible
in any judicial, administrative or other proceeding, and this Agreement shall
be null, void and of no further force or effect ab initio, and the Parties shall retain all of their rights,
claims and defenses vis-à-vis one another, including, without limitation, the
claims and defenses asserted or assertable in the Adversary Proceeding and/or
the State Court Action. 

39

                    (b)     The
effective date of the Agreement (the “Effective Date”) shall occur on
the date that all of the following conditions precedent are satisfied or, in
the case of the condition in paragraph 1(b)(iv), satisfied or waived: (i) this
Agreement shall have been executed and delivered by all Parties hereto; (ii)
the Bankruptcy Court shall have entered on the docket an order (the “Approval
Order”) approving the settlement in form and substance reasonably
satisfactory to the Parties (including, without limitation, findings by the
Bankruptcy Court that the Parties had entered into this Agreement in good faith
and are entitled to the protections of Section 363(m) of the Bankruptcy Code);
(iii) no stay of the Approval Order prohibiting the consummation of the
transactions contemplated by this Agreement shall be in effect; and (iv) either no
appeal of the Approval Order shall have been filed or be pending on the 11th
day following the date of entry thereof or, if there has been an appeal of the
Approval Order, all appellate remedies have been fully exhausted and the
Approval Order has been affirmed. If all the conditions to the Effective Date
have been satisfied other than the condition in paragraph 1(b)(iv), the
Blackstone/Cerberus Parties shall have the right to waive, in their sole discretion,
satisfaction of such condition. In the event the Effective Date does not occur
or cannot occur because one of the conditions precedent cannot be satisfied,
and such conditions are not waived by the Blackstone/Cerberus Parties, the
terms set forth herein shall be null and void and of no binding effect on any
of the Parties. Each of the Parties hereto shall use their commercially
reasonable efforts to cause the Effective Date to occur as promptly as possible
after the date hereof, which for the avoidance of doubt shall not in any way
impair the Blackstone/Cerberus Parties right, in their sole discretion, to not
waive any unsatisfied condition precedent hereunder.

                    (c)     Debtors
shall file a motion seeking approval under Rule 9019 and Sections 363(b) and
(f) of the Bankruptcy Code, in form and substance reasonably acceptable to the
Blackstone/Cerberus Parties, within 5 business days of the execution of this
Agreement. The Parties hereto shall use reasonable efforts to cause the entry of
the Approval Order approving and incorporating this Agreement. Reasonable
efforts shall include the presentation of necessary evidence (documentary and
testimony) to support entry of the Approval Order.

40

                    2.     Transfer
of Product Carriers’ Class B Interest. (a) As of the Effective Date,
Product Carriers shall irrevocably transfer, for consideration of $1, all of
its right, title and interest as the Class B Member under the LLC Agreement,
and all such right, title and interest, and all obligations, of the Class B
Member under the LLC Agreement shall be automatically and irrevocably deemed
transferred, free and clear of all Liens (as
defined below) other than the NASSCO Lien (as defined below), to the
Class A Members ratably according to each such Class A Member’s interest
(obtained by dividing such Class A Member’s Capital Account (as defined in the
LLC Agreement) balance by the aggregate Capital Account balances of all Class A
Members). Products Carriers agrees that it shall file, and cause to be filed,
all tax returns, reports and any other tax-related documents in a manner
consistent with the transfer of the Class B Member Interest for $1. Product
Carriers represents and warrants to the Blackstone/Cerberus Parties on the date
hereof and immediately prior to the transfer on the Effective Date that,
Product Carriers (i) is the record and beneficial owner of the Class B Member
Interest (as defined in the LLC Agreement), and (ii) has good and valid title
to the Class B Member Interest, free and clear of any lien, mortgage, pledge,
claim, encumbrance, charge or other security interest (a “Lien”), other
than any Lien (I) on payments and other distributions made in connection with
the Class B Member Interest arising as a result of the Collateral Assignment
entered into between Product Carriers and NASSCO on August 7, 2006, to secure
obligations owed under Article 36 of the Construction Contract (the “NASSCO Lien”) and (II) on the
Class B Member Interest, and any payments and distributions made in respect
thereof, arising as a result of the Bankruptcy Court’s Stipulation and Second
Interim Order Regarding Use of Cash Collateral and Adequate Protection, dated
May 27, 2009, and any subsequent interim or final order that supercedes such
Second Interim Order. 

                    (b)     The
Parties hereby acknowledge and agree that effective as of the Effective Date
(i) Product Carriers will not be and no longer has the right to be the Managing
Member of Products Investor, and (ii) Product Carriers no longer has, nor has
any right to appoint, any persons acting as directors and representatives of
the Class B Member on the Board of Directors of Products Investor. Product
Carriers shall, as of the Effective Date, deliver to the Blackstone/Cerberus Parties
the Certificate of Interest (as defined in the LLC Agreement) with respect to
the Class B Member Interest endorsed in blank or accompanied by duly executed
assignment documents.

41

                    (c)     It
is further understood and agreed that, except as expressly set forth in this
Agreement, (i) Product Carriers shall have as of the Effective Date
relinquished all rights under the LLC Agreement with respect to Products
Investor and (ii) the Debtors shall have as of the Effective Date relinquished
all rights in respect of Products Investor and the Joint Venture, including all
Vessels owned by or being constructed on behalf of the Joint Venture.

                    (d)     At
the Effective Date, there shall be a closing of the books of Products Investor,
and each item of income, gain, loss and deduction of Products Investor for the
period from January 1, 2009 through but excluding the Effective Date shall be
allocated among the Class A Members and the Class B Member in accordance with
the LLC Agreement as in effect on the date hereof. For the avoidance of doubt,
no item of income, gain, loss or deduction arising from and after the Effective
Date shall be allocated to Product Carriers.

                    (e)     The
Parties hereto acknowledge and agree that as of the Effective Date the
Performance Guaranty, dated as of August 7, 2006, made by U.S. Shipping
Partners L.P. and USS PC Holding Corp. to Products Investor, shall be
terminated and of no further force and effect. 

42

                    3.     Termination
of Management Agreement. (a) Debtors hereby acknowledge, confirm, and agree
that as of the Effective Date Product Manager shall be terminated as Vessel
Manager with respect to all Vessels, provided, however, that
Product Manager shall remain as Vessel Manager and continue to provide
Management and Operating Services (as defined in the Management Agreement) with
respect to all Vessels, except as provided in this Agreement (but for the
avoidance of doubt, as of the Effective Date Product Manager shall not provide
Construction Supervision Services (as defined in the Management Agreement)
except to the extent requested by Products Investor in accordance with
paragraph 4(c)(i) hereof), until the earlier of (i) seventy-five days following
the Effective Date, provided that Product Manager has complied in all material
respects with its obligations in Section 3(b) below to cooperate with and
assist in the transition of vessel management duties, and (ii) such time
following the Effective Date as Products Investor and/or Blackstone/Cerberus
Parties appoint a replacement Vessel manager (the “Replacement Vessel
Manager”) in their sole discretion, the Replacement Vessel Manager assumes
full operational and management control of the Golden
State, the Pelican State and
any other Vessel Delivered (as defined in the Construction Contract) prior to
the Effective Date (collectively the “Operating Vessels”), and Debtors
receive notification from Products Investor that full operational and
management control of the Operating Vessels has been assumed by such
Replacement Vessel Manager (which the Blackstone/Cerberus Parties estimate will
be completed within approximately 60 days from the Effective Date), such notice
to be given no later than one business day after the date all persons employed
by Debtors or USS Transport LLC have vacated the Golden State and the Pelican
State at the request of the Blackstone/Cerberus Parties (the period between the Effective Date
and the earlier of the foregoing dates being the “Management Transition
Period”). The Blackstone/Cerberus Parties agree to use commercially
reasonable efforts to (i) appoint a Replacement Vessel Manager as soon as
practicable after the Effective Date and (ii) cause the Replacement Vessel
Manager to assume full operational and management control of the Operating
Vessels within approximately 60 days after the Effective Date. Subject to
paragraph 3(e) of this Agreement, Product Manager shall not be entitled to any
Management Fees (as defined in the Management Agreement) from Products Investor
or the Blackstone/Cerberus Parties for the period from and after June 2, 2009,
except for payments that are expressly provided for by this Agreement. Product
Manager shall be entitled to receive from Products Investor, and Products
Investor shall pay to Product Manager, all Reimbursable Expenses (as defined in
the Management Agreement and including any such expenses as specified in
paragraph 3(c) hereof as being Reimbursable Expenses) pursuant to Section 4.3
of the Management Agreement which are incurred prior to the end of the
Management Transition Period in providing Management and Operating Services
under the Management Agreement or pursuant to this paragraph 3(a), consistent
with past practice and regardless of whether incurred before or after the date
of this Agreement. All payments of Reimbursable Expenses shall be made in the
ordinary course of business consistent with past practice.

43

                    (b)     During
the Management Transition Period, Debtors agree that Product Manager shall use
commercially reasonable efforts to cooperate with and assist the Replacement
Vessel Manager with an orderly transition of Vessel Manager duties with respect
to the Operating Vessels. Upon completion of the Management Transition Period,
or at such earlier time as Products Investor or the Blackstone/Cerberus Parties
may request, upon at least five (5) business days’ notice, with respect to any
Vessel, Debtors and their affiliates, crew, employees, staff, and agents shall
immediately vacate all Vessels, unless Products Investor or the
Blackstone/Cerberus Parties in their sole discretion determine to waive this
requirement in writing on an individual-by-individual basis for specifically
identified Vessel personnel (it being understood and agreed that any such
individual may elect to remain in the employ of Debtors). The Parties agree
that the Management Agreement and all rights and obligations of Product Manager
thereunder shall be terminated upon completion of the Management Transition Period;
provided, however, that Sections 4.3, 7, 8, 12 through 16, 18, 20 and 21 of the
Management Agreement shall survive termination of the Management Agreement and
shall apply to services rendered pursuant to this Agreement as though they were
provided pursuant to the Management Agreement.

44

                    (c)     Debtors
agree to use commercially reasonable efforts to assist Products Investor and
Blackstone/Cerberus Parties in obtaining any consents, novations,
authorizations, approvals, exemptions, notices or other agreements from third
parties, including without limitation the U.S. Navy Military Sealift Command,
Marathon Petroleum Company LLC and BP West Coast Products LLC, with regard to
any charters, the appointment of the Replacement Vessel Manager, and all other
matters contemplated in this Agreement, as may be reasonably requested by the
Blackstone/Cerberus Parties, it being understood and agreed that (i) Debtors
shall not be required to expend any funds in assisting the Blackstone/Cerberus
Parties in obtaining any consents, novations, authorizations, approvals,
exemptions, notices or other agreements from third parties hereunder unless
such expenditure of funds is specifically requested by the Blackstone/Cerberus
Parties in writing, in which event such funds expended by the Debtors shall be
Reimbursable Expenses under the Management Agreement and reimbursed to Product
Manager in accordance with the Management Agreement and (ii) the failure of
Products Investor and the Blackstone/Cerberus Parties to obtain any consents,
novations, authorizations, approvals, exemptions, notices or other agreements
from third parties shall not affect the Settlement Payments due Product Manager
hereunder.

45

                    (d)     As
soon as practicable, Debtors shall deliver to Products Investor, the
Blackstone/Cerberus Parties, and/or the Replacement Vessel Manager copies of
all books, records, reports, and contracts of Products Investor, Vessel Manager
(with respect to the Vessels) and the Vessels and all further information
concerning Products Investor’s business, properties and, except to the extent
prohibited by applicable law, personnel, including but not limited to the
reports and statements set forth on Schedule A hereto, and any other
reports required pursuant to the LLC Agreement, Management Agreement, and
Credit Agreement as the Blackstone/Cerberus Parties may reasonably request.

                    (e)     The
Parties agree that, in the event all conditions to the Effective Date have been
satisfied other than the condition in paragraph 1(b)(iv), until the Effective
Date, Products Investor shall continue to pay to Product Manager, in accordance
with the terms of the Management Agreement, (i) the Annual Management Fee (as
defined in the Management Agreement) in respect of each Operating Vessel (all
payments made pursuant to this Section 3(e)(i) being collectively referred to
as the “Interim Management Fee”) and (ii) the Oversight Fee (as defined
in the Management Agreement) in respect of each Vessel under construction (all
payments made pursuant to this Section 3(e)(ii) being collectively referred to
as the “Interim Oversight Fee”). For the avoidance of doubt, if all the
conditions to the Effective Date other than the condition in paragraph 1(b)(iv)
have been satisfied, Product Manager shall be entitled to receive from Products
Investor, and Products Investor shall pay to Product Manager, promptly
following the eleventh day after entry of the Approval Order, all Annual
Management Fees and Oversight Fees that Product Manager would have received
during the period beginning on June 2, 2009 and ending on the date hereof, and
all payments of Annual Management Fees and Oversight Fees pursuant to this
sentence shall be Interim Management Fees and Interim Oversight Fees for
purposes of this Agreement.

46

                    (f)     The
Parties hereto acknowledge and agree that simultaneous with the termination of
the Management Agreement as set forth in paragraph 3(b), all obligations of
USSP and USS JV Manager Inc. (“JV Manager”) to Products Investor under
that certain Performance Guaranty, dated as of August 7, 2006, made by USSP and
JV Manager to Products Investor (the “Performance Guaranty”), shall be
terminated and of no further force and effect; provided, however, that
notwithstanding the foregoing, the obligations of USSP and JV Manager under the
Performance Guaranty in respect of Product Manager’s obligations under Section
7.3 of the Management Agreement shall survive termination of the Performance
Guaranty.

                    4.     Settlement
Payments. On the Effective Date, the Blackstone/Cerberus Parties, jointly
and severally, shall deposit Fourteen Million Dollars ($14,000,000) less the
amount of Interim Management Fees and Interim Oversight Fees actually paid to
Product Manager between the date hereof and the Effective Date into an escrow
account (the “Escrow Account”) pursuant to the terms of an escrow
agreement substantially in the form attached hereto as Exhibit A for the
purpose of funding the payment obligations in paragraphs 4(a) through 4(c). The
Blackstone/Cerberus Parties shall, in cases of paragraphs 4(a) through (c),
cause distributions from the Escrow Account to, and Products Investor shall, in
cases of paragraphs 4(d) and (e) directly pay, Product Manager at the times and
in the manner set forth below (the “Settlement Payments”):

                    (a)     On
the Effective Date, Nine Million Dollars ($9,000,000) by wire transfer of
immediately available funds less 50% of the amount of Interim Management Fees
actually paid to Product Manager between the date hereof and the Effective
Date.

                    (b)     On
the 40th day following the conclusion of the Management Transition
Period (or, if such date is not a business day, on the first business day after
such date), subject to the orderly transition of vessel management with respect
to the Operating Vessels as provided in paragraph 3(b), Two Million Three
Hundred Thousand Dollars ($2,300,000) less 50% of the amount of Interim Management
Fees actually paid to Product Manager between the date hereof and the Effective
Date.

47

                    (c)     Two
Million Seven Hundred Thousand Dollars ($2,700,000) less the amount of Interim
Oversight Fees actually paid to Product Manager between the date hereof and the
Effective Date, such amount to be paid in equal monthly installments through
December 2010, on the 17th day of each calendar month (or, if such date is not
a business day, on the first business day after such date) commencing with the
first month after the Effective Date. For the avoidance of doubt, from and
after the Effective Date (i) Debtors shall have no obligation to, and shall
not, perform Construction Supervision Services on behalf of Products Investor
except, and then only, to the extent reasonably requested by Products Investor
in writing and shall perform no other Construction Supervision Services
pertaining to any of the Vessels, (ii) the payments due under this paragraph
4(c) are due and payable whether or not Product Manager renders any
Construction Supervision Services and (iii) neither Product Manager nor any
Manager’s Covered Person (as defined in the Management Agreement) shall be
liable, responsible or accountable in damages or otherwise to Products
Investor, the JV Subsidiaries (as defined in the Management Agreement) or the
Blackstone/Cerberus Parties for any losses, damages, liabilities, demands or
expenses suffered by Products Investor, the JV Subsidiaries or the
Blackstone/Cerberus Parties for mistakes of judgment or for action or inaction
in performing Construction Supervision Services on behalf of Products Investor
to the extent reasonably requested by Products Investor in writing pursuant to
clause (i) of this sentence, except to the extent arising out of (A) the gross
negligence or willful misconduct of such Manager’s Covered Person or (B) a
violation of any Applicable Law (as defined in the Management Agreement) by the
Manager’s Covered Person. The Blackstone/Cerberus Parties and Products Investor
hereby agree to hold harmless and indemnify the Debtors for any damages or
liabilities incurred by the Debtors during the period from the Effective Date
through and until the completion of construction of the Vessels, arising from
or related to the services performed by a person or construction manager other
than Product Manager or as a result of Products Investor not appointing another
person to provide Construction Supervision Services and not requesting Product
Manager to provide such services. 

48

                    (d)     Upon
Delivery (as defined in the Construction Contract) of any of Vessels 3, 4 and
5, to the extent Products Investor receives a provisional deduction in Progress
Payments (as defined in the Construction Contract) made to NASSCO based on NASSCO’s
cost performance pursuant to Article 3(e) of the Construction Contract with
respect to such Vessel (such deduction amount, a “Cost Under-run Provisional
Deduction”), Products Investor shall, within 2 days of making any Progress
Payment that has been reduced to give effect to such Cost Under-run Provisional
Deduction, pay Product Manager (by wire transfer of immediately available
funds) an amount equal to 50% of the first One Million Dollars ($1,000,000) of
any such Cost Under-run Deduction. For the avoidance of doubt, (i) the
aggregate amount that Product Manager may receive under this paragraph shall be
up to, but not in excess of, Five Hundred Thousand Dollars ($500,000) and (ii)
if Product Manager does not receive $500,000 in connection with any Cost
Under-run Provisional Deduction in respect of Vessel 3, then additional amounts
shall be paid from the Cost Under-run Provisional Deductions in respect of
Vessel 4, if any, and, if necessary, Vessel 5, if any, until Product Manager
has received a total of $500,000 in the aggregate under this provision;
provided that any payment due under this paragraph 4(d) with respect to Vessel
5 shall be made within 2 days after receipt of the Cost Under-run Payment (as
defined below), if any, made by NASSCO to Products Investor.

49

                    (e)     Upon
the expiration of Vessel 5’s Guarantee Period (as defined in the Construction
Contract), to the extent Products Investor receives a payment based on NASSCO’s
cost performance pursuant to Article 3(d) of the Construction Contract with
respect to such Vessel (such deduction amount, a “Cost Under-run Payment”),
Products Investor shall, within 2 days of receipt of such Cost Under-run
Payment, pay Product Manager (by wire transfer of immediately available funds)
an amount equal to 50% of the first $500,000 of any such Cost Under-run Payment
not applied to satisfy Products Investor’s obligations under paragraph
4(d). For the avoidance of doubt, the
aggregate amount that Product Manager may receive under this paragraph 4(e)
shall be up to, but not in excess of, Two Hundred and Fifty Thousand Dollars
($250,000).

                    (f)     The
payments to be made pursuant to paragraphs 4(a) through (e) shall be in
settlement of the termination of the Management Agreement, and payment of
management and other fees to have been paid thereunder. For the avoidance of doubt, in addition to
the payments to be made pursuant to paragraphs 4(a) through (e), Product
Manager shall be entitled to receive, and Products Investor shall pay to Product
Manager, in accordance with the terms of the Management Agreement, all
Reimbursable Expenses incurred by Product Manager through the end of the
Management Transition Period.

50

                    (g)     The
Settlement Payments shall be in full settlement of any and all claims or
interests whatsoever Debtors may have relating to Products Investor and the
Blackstone/Cerberus Parties, other than claims for Reimbursable Expenses and
indemnification under Section 7 of the Management Agreement, and in full settlement
of all other claims being released by Debtors pursuant to this Agreement. The Settlement Payments shall be made by
wire transfer to an account in the United States to be designated by Product
Manager. Failure by Products Investor
to make payments pursuant to paragraph 4(d) and (e) in accordance with the
dates set forth in this Agreement shall not be deemed a default under this
Agreement, unless a missed payment shall not have been cured within 3 business
days following receipt by Products Investor, the Blackstone/Cerberus Parties,
and their counsel, of written notice of such missed payment by the
Debtors. With respect to the payments
due under paragraphs 4(d) and (e), Product Investors shall provide Product
Manager with notice of when the respective Vessels are delivered, and, if the
aggregate amount to be paid thereunder to Product Manager is not paid with
respect to any Vessel, documentation demonstrating in reasonable detail whether
or not a Cost-under Run Payment is due and the calculation of the Cost-under
Run Payment. For the avoidance of
doubt, except as provided in paragraph 4(i), the Blackstone/Cerberus Parties’
obligations under this paragraph 4 shall be satisfied in full, with respect to
each payment, upon the transfer of funds to the account or accounts designated
by Product Manager for such payments. 

                    5.     Jan
Ziobro. The Debtors hereby agree
that as of the Effective Date of this Agreement, and for so long as Mr. Jan T.
Ziobro is employed by any of Debtors or their affiliates (it being understood
and agreed that Debtors shall have no obligation to retain Mr. Ziobro as an
employee), Debtors shall, upon reasonable prior notice, provide to Products
Investor and/or the person providing construction oversight services to
Products Investor reasonable access to Mr. Ziobro promptly upon request in
connection with oversight of Vessel construction, including following the
termination of the Management Agreement, consistent with past practice. For the avoidance of doubt, no consideration
shall be paid to Debtors in connection with the performance by Mr. Ziobro of
such services beyond the Settlement Payments set forth in this Agreement.

51

                    6.     Vessel
Sales. (a)  With respect to any one or more Vessels, in the event Products
Investor makes a bona fide
decision to sell one or more of the Vessels then, prior to effecting any such
sale of one or more of the Vessels, Products Investor shall provide written
notice to Debtors that it intends to effect a sale of a Vessel or Vessels (a “Proposed
Sale Notice”). 

                    (b)     Within
21 days of the date such Proposed Sale Notice is delivered to Debtors, Debtors
may elect, by delivery of a bona fide written
notice (a “Purchase Offer Notice”) to Products Investor not later than
the end of such 21 day period, to offer to purchase one or more of the Vessels
offered. The Purchase Offer Notice
shall include evidence reasonably satisfactory to Products Investor demonstrating
that Debtors have adequate financial resources to timely consummate the
purchase of the Vessel or Vessels. The
terms of any Purchase Offer Notice shall expire on the tenth day following its
delivery to Products Investor. If
Products Investor accepts the Purchase Offer Notice within such ten day period,
then Products Investor shall sell the Vessel or Vessels to Debtors on a date
designated by Debtors that is not more than 120 days after the date the
Purchase Offer Notice is accepted by Products Investor. For the avoidance of doubt, Products
Investor is under no obligation to accept any Purchase Offer Notice.

                    (c)     In
the event that a Purchase Offer Notice was delivered but was not accepted by
Products Investor, then Products Investor may sell the Vessel or Vessels to a
third party purchaser free of any right of Debtors, provided, however,
that Debtors will be permitted to fully participate as a bidder in, and not be
subject to a negative bias in connection with, any such sales process.  Products Investor shall exercise its
commercially reasonable business judgment in conducting any sales process and
in determining the successful bidder (if any) and the terms of any accepted
purchase offer for any Vessel or group of Vessels.

52

                    7.     Releases.
(a)     As of the
Effective Date and again as of the last day of the Management Transition
Period, Debtors and each of their predecessors, successors, assigns, agents,
attorneys, insurers, subsidiaries, affiliates, stockholders, officers,
directors, employees, heirs, executors, administrators, trusts, and trustees
(collectively, “Debtor Releasors”) fully and irrevocably release the
Blackstone/Cerberus Parties, any other Blackstone or Cerberus entity that at
any time was a member of Products Investor or a lender under the Credit
Agreement, and Products Investor, and each of their predecessors, successors,
parents, subsidiaries, affiliates, divisions, officers, present and former
directors, members, partners, principals, employees, agents, shareholders,
assigns, heirs, executors, administrators, trusts, trustees, and counsel
(collectively, the “Blackstone/Cerberus Releasees”) of and from any and
all manner of claims, demands, rights, liabilities, losses, obligations,
duties, damages, debts, expenses, interest, penalties, sanctions, fees,
attorneys’ fees, costs, actions, potential actions, causes of action, suits,
agreements, judgments, decrees, matters, issues and controversies of any kind,
nature or description whatsoever, whether known or unknown, disclosed or undisclosed,
accrued or unaccrued, apparent or not apparent, foreseen or unforeseen, matured
or not matured, suspected or unsuspected, liquidated or not liquidated, fixed
or contingent, whether direct, derivative, individual, representative, legal,
equitable, or of any type, or in any other capacity, whether based on state,
local, foreign, federal, statutory, regulatory, common, or other law that any
or all Debtor Releasors ever had, now have, or hereinafter shall or may have,
against any or all of the Blackstone/Cerberus Releasees for, upon or by reason
of any matter, cause, or thing whatsoever in any way relating to, involving,
referring to, arising out of, or based upon, directly or indirectly, any
actions, transactions, occurrences, statements, representations,
misrepresentations, omissions, allegations, facts, practices, events, claims or
any other matters or things whatsoever, or any series thereof, existing or
occurring on or prior to the last day of the Management Transition Period;
provided, however, that nothing herein shall release (i) the
Blackstone/Cerberus Releasees from any of their obligations under this
Agreement, (ii) Products Investor from its obligations under Sections 4.3 and
7.2 of the Management Agreement, or (iii) any claim of any Debtor Releasor
based on any Blackstone/Cerberus Releasees’ ownership of USSP’s 13% Senior
Secured Notes due 2014.

53

                    (b)     As
of the Effective Date and again as of the last day of the Management Transition
Period, the Blackstone/Cerberus Parties, on behalf of themselves and on behalf
of any other Blackstone or Cerberus entity that at any time was a member of
Products Investor or a lender under the Credit Agreement, Products Investor and
each of their predecessors, successors, assigns, agents, attorneys, insurers,
subsidiaries, affiliates, stockholders, officers, directors, employees, heirs,
executors, administrators, trusts, and trustees (collectively, the “Blackstone/Cerberus
Releasors”) fully and irrevocably release Debtors and each of their
predecessors, successors, parents, subsidiaries, affiliates, divisions,
officers, present and former directors, members, partners, principals,
employees, agents, shareholders, assigns, heirs, executors, administrators,
trusts, trustees, and counsel (collectively, “Debtor Releasees”) of and
from any and all manner of claims, demands, rights, liabilities, losses,
obligations, duties, damages, debts, expenses, interest, penalties, sanctions,
fees, attorneys’ fees, costs, actions, potential actions, causes of action,
suits, agreements, judgments, decrees, matters, issues and controversies of any
kind, nature or description whatsoever, whether known or unknown, disclosed or
undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or
unforeseen, matured or not matured, suspected or unsuspected, liquidated or not
liquidated, fixed or contingent, whether direct, derivative, individual,
representative, legal, equitable, or of any type, or in any other capacity,
whether based on state, local, foreign, federal, statutory, regulatory, common,
or other law that any or all the Blackstone/Cerberus Releasors ever had, now
have, or hereinafter shall or may have, against any or all of the Debtor
Releasees for, upon or by reason of any matter, cause, or thing whatsoever in
any way relating to, involving, referring to, arising out of, or based upon,
directly or indirectly, any actions, transactions, occurrences, statements,
representations, misrepresentations, omissions, allegations, facts, practices,
events, claims or any other matters or things whatsoever, or any series
thereof, existing or occurring on or prior to the last day of the Management
Transition Period; provided, however, that nothing herein shall release (i) the
Debtor Releasees from any of their obligations under this Agreement, (ii)
Product Manager from its obligations under Section 7.3 of the Management
Agreement, or (iii) any claim of any Blackstone/Cerberus Releasor based on such
entity’s ownership of USSP’s 13% Senior Secured Notes due 2014.

54

                    (c)     The
Debtor Releasors and the Blackstone/Cerberus Releasors, in connection with and
as part of the releases described in paragraphs 7(a) and (b) above, voluntarily
waive Section 1542 of the California Civil Code, or any similar, comparable or
equivalent provision of the statutory or non-statutory law of any other
jurisdiction. Section 1542 provides:

	
 

	
 

	
 

	
A general
 release does not extend to claims which the creditor does not know or suspect
 to exist in his or her favor at the time of executing the release, which if
 known by him or her must have materially affected his or her settlement with
 the debtor.

55

                    (d)     The
Parties acknowledge that they may hereafter discover facts different from or in
addition to those they now know or believe to be true with respect to the
matters that are the subject of this Agreement, and they expressly agree to
assume the risk of the possible discovery of additional or different facts, and
agree that the releases contained herein shall be and remain effective in all
respects regardless of such additional or different facts, unless this
Agreement shall be declared null and void as provided herein.

                    8.     No
Further Actions. (a) Other than enforcement of the terms of this
Agreement and Sections 4.3 and 7.2 of the Management Agreement, the Debtor
Releasors (i) shall not institute, commence, assert or prosecute against any of
the Blackstone/Cerberus Releasees any claim, demand, action, suit or proceeding
of any kind or nature whatsoever, in law or in equity, directly or indirectly,
whether by way of action, defense, set-off, cross-complaint, counterclaim or
otherwise, and whether for payment, damages, loss, specific performance or
otherwise, related to any claim to be released pursuant to paragraph 7(a)
herein; and (ii) shall indemnify and hold each of the Blackstone/Cerberus
Releasees harmless against any and all costs (including attorneys’ fees and
expenses) and liabilities incurred by them as a result of the Debtor Releasors
breach of the foregoing clause 8(a)(i).

                    (b)     Other
than enforcement of the terms of this Agreement and Section 7.3 of the
Management Agreement, the
Blackstone/Cerberus Releasors (i) shall not institute, commence, assert
or prosecute against any of the Debtor Releasees any claim, demand, action,
suit or proceeding of any kind or nature whatsoever, in law or in equity,
directly or indirectly, whether by way of action, defense, set-off,
cross-complaint, counterclaim or otherwise, and whether for payment, damages,
loss, specific performance or otherwise, related to any claim to be released
pursuant to paragraph 7(b) herein; and (ii) shall indemnify and hold each of
the Debtor Releasees harmless against any and all costs (including attorneys’
fees and expenses) and liabilities incurred by them as a result of the
Blackstone/Cerberus Releasors’ breach of the foregoing clause 8(b)(i). 

56

                    (c)     The
provisions of paragraphs 8(a) and (b) shall be in full force and effect upon
execution of this Agreement, and shall remain in effect upon the Effective Date
and thereafter.

                    9.     Dismissal
of Actions. Upon the Effective
Date, in consideration of the mutual promises, covenants, agreements and other
consideration described in this Agreement, Debtors shall file or cause to be
filed appropriate notices and/or stipulations dismissing the Adversary
Proceeding with prejudice, and the Parties shall jointly file or cause to be
filed appropriate notices and/or stipulations dismissing the State Court Action
with prejudice. The Parties shall bear
their own respective costs (including without limitation attorneys’ fees) in
the Adversary Proceeding and the State Court Action. 

                    10.     Confidential
Information. The Debtors shall keep
confidential, and cause their affiliates, and Debtors’ and their affiliates’
respective officers, directors, employees and advisors to keep confidential,
all information relating to Products Investor and its subsidiaries, including
but not limited to information related to their business, charters and related
rates, vendors, customers, market analyses, financial information, business
plans, employee compensation information, and contracts (collectively, “Confidential
Information”), except as required by law and except for information that is
available to the public on the Effective Date, or thereafter becomes available
to the public other than as a result of a breach of this paragraph 10. For purposes of this paragraph 10 the term
“Confidential Information” should not include any information that (a) is or
becomes generally available to the public or (b) was or becomes available to
Debtors, its affiliates, or any of their respective officers, directors,
employees and advisors on a non-confidential basis from a source other than the
Blackstone/Cerberus Parties or Products Investor.

57

                    11.     Restriction
on Certain Amendments to LLC Agreement and Construction Contract. Products Investor shall not, and the
Blackstone/Cerberus Parties shall not permit Products Investor to, amend in any
respect (a) any provision of the LLC Agreement which would be effective for any
period prior to the Effective Date, (b) the Construction Contract if such
amendment would have the effect of (i) decreasing the Contract Price (as such
term is defined in the Construction Contract) for any Vessel or (ii) increasing
Contractor’s Actual Cost (as such term is defined in the Construction
Contract), for any Vessel or (c) Articles 3(a), (c), (d) or (e), 5, 6, 7 or 9
of the Construction Contract, if, and only to the extent that, any of the
foregoing amendments of Articles 3(a), (c), (d) or (e), 5, 6, 7 or 9 of the
Construction Contract could otherwise reasonably be expected to adversely
affect Product Manager’s rights to receive payments pursuant to paragraph 4(d)
or (e) of this Agreement. For the
avoidance of doubt, no amendment shall be deemed to adversely affect Product
Manager’s right to receive payments pursuant to paragraphs 4(d) or (e) of this
Agreement so long as Product Manager receives the payments contemplated by
those paragraphs at the time the payments would have been received but for the
amendments.  Notwithstanding anything
to the contrary herein, Products Investor may amend the Construction Contract
to defer progress and other payments to NASSCO for no more than six months and
such amendments shall not be deemed to adversely affect Product Manager’s
rights to receive payments pursuant to paragraph 4(d) or (e) hereof as long as
such amendments do not have the effect of or result in a decrease in the
Contract Price or an increase in the Contractor’s Actual Cost.

58

                    12.     Miscellaneous.

                              (a)     By
entering into this Agreement, the Parties do not intend to make, nor shall they
be deemed to have made, any admission of liability of any kind whatsoever. The
Parties agree that they are entering into this Agreement for the purpose of
settling certain disputes between them and to avoid further expense with
respect to those disputes.

                              (b)     The
Blackstone/Cerberus Parties and Products Investor shall not, and shall instruct
their officers, directors and employees, and use commercially reasonable
efforts to instruct the other persons or entities who are Blackstone/Cerberus
Releasors, not to, either directly or through other persons or entities, publish
or communicate any Disparaging (as defined below) remarks, comments or
statements concerning any of the Debtor Releasees or the operations, prospects
or business of the Debtors. The Debtors shall not, and shall instruct their
officers, directors and employees, and use commercially reasonable efforts to
instruct the other persons or entities who are Debtor Releasors, not to, either
directly or through other persons or entities, publish or communicate any
Disparaging remarks, comments or statements concerning any of the
Blackstone/Cerberus Releasees or the operations, prospects or business of the
Blackstone/Cerberus Parties. Notwithstanding the foregoing, nothing in this
paragraph shall prevent a Party from responding in a manner that does not
violate the preceding sentences to (i) inquiries regarding the State Court
Action or the Adversarial Proceeding, (ii) any statement made at any time after
the date hereof by another Party hereto, or (iii) any article appearing at any
time after the date hereof in the press. “Disparaging” remarks, comments or
statements are those that impugn the character, honesty, integrity, morality or
business acumen or abilities in connection with any aspect of the operation of
business of the covered individual or entity. 

59

                              (c)     This
Agreement constitutes the entire agreement between the Parties regarding the
settlement of their disputes. Each Party acknowledges that it has not executed
this Agreement in reliance on any representation, inducement, promise,
agreement, or warranty that is not contained in this Agreement.

                              (d)     The
Parties agree that the prior drafting history of this Agreement shall not be
used to construe any term of this Agreement. 

                              (e)     This
Agreement has been negotiated by each Party and its respective attorneys, and
the language hereof will not be construed for or against any such Party as the
principal drafter of this Agreement.

                              (f)     The
individuals signing this Agreement and the Parties on whose behalf such
individuals are signing hereby represent and warrant that they are empowered
and authorized to sign on behalf of and bind the Parties for whom they have
signed.

                              (g)     The
Parties represent and warrant that, as of the Effective Date of this Agreement,
they have not assigned, conveyed, or otherwise transferred the rights to any
claims, demands, causes of action, rights, or obligations related in any way to
the claims to be released in paragraphs 7(a) and (b) to any other person or
entity, nor shall they hereafter do so; provided, however, that (i) in August
2006 the Debtors granted to its secured lenders a security interest in the
Management Agreement and the proceeds thereof and (ii) the Bankruptcy Court has
entered orders, including its order dated May 27, 2009 and any subsequent
interim or final order that supercedes the May 27, 2009 order, that provides
the Debtors’ secured lenders with a security interest in all of the property of
the Debtors, now owned or hereafter acquired.

                              (h)     Each
Party agrees that this Agreement shall be binding upon the heirs, successors,
assigns, subsidiaries, and affiliates of each Party. 

60

                              (i)     The
Parties agree that “Products Investor” as used in this Agreement shall mean USS
Products Investor LLC and its successors and assigns. 

                              (j)     Each
Party represents and agrees: (i) that it has fully reviewed this Agreement and
has had the opportunity to seek advice by independent counsel of its choosing
in that regard; (ii) that it fully understands the terms of this Agreement and
has entered into this Agreement voluntarily without any coercion or duress on
the part of any person or entity; and (iii) that it was given adequate time to
consider all implications of this Agreement prior to entering into it.

                              (k)     This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

                              (l)     This
Agreement may not be amended or modified except by a written instrument executed
by the duly authorized representatives of all of the Parties.

                              (m)    Each party to
this Agreement shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party to this
Agreement may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated herein.

                              (n)     This
Agreement shall be governed by the laws of the State of New York applicable to
agreements entered into within the State of New York excluding the choice of
law rules thereof. The Parties agree that they are subject to the continuing jurisdiction
of the Bankruptcy Court for the purpose of enforcing the provisions of this
Agreement. 

61

                              (o)     The
Debtors and the Blackstone/Cerberus Parties agree that solely for purposes of
executing this Agreement and consummating the actions contemplated herein,
Blackstone Capital Partners V USS, L.P. shall be recognized as the managing
member of Products Investor. To the extent other actions are required to be
taken by Products Investor prior to the Effective Date, the Parties shall
reasonably cooperate in implementing a mechanism to effectuate such actions. 

*   *   *   *   *   *

62

IN WITNESS
WHEREOF, the Parties have caused this Agreement to be executed by themselves or
their duly authorized representatives as of the date hereof.

ACCEPTED AND AGREED:

	
 

	
 

	
 

	
 

	
 

	
U.S.
 SHIPPING PARTNERS L.P.

	
 

	
By:

	
US Shipping
 General Partner LLC, its General Partner

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: Joseph
 Gehegan

	
 

	
 

	
Title: Chief
 Operating Officer

	
 

	
 

	
 

	
 

	
USS PRODUCT
 MANAGER LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: Joseph
 Gehegan

	
 

	
 

	
Title: Chief
 Operating Officer

	
 

	
 

	
 

	
 

	
USS PRODUCT
 CARRIERS LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: Joseph
 Gehegan

	
 

	
 

	
Title: Chief
 Operating Officer

	
 

	
 

	
 

	
 

	
USS PC
 HOLDING CORP.

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: Joseph
 Gehegan

	
 

	
 

	
Title: Chief
 Operating Officer

	
 

	
 

	
 

	
 

	
 

	
BLACKSTONE
 CORPORATE DEBT ADMINISTRATION L.L.C.

	
 

	
 

	
 

	
 

	
By:

	
Blackstone
 Debt Advisors L.P., its Sole Member

	
 

	
 

	
 

	
 

	
By:

	
BCLO
 Advisors L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: George
 Fan

	
 

	
 

	
Title: Managing Director

63

	
 

	
 

	
 

	
 

	
 

	
BLACKSTONE
 CAPITAL PARTNERS V USS, L.P.

	
 

	
 

	
 

	
 

	
By:
 Blackstone Management Associates V USS L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By: BMA V
 USS L.L.C., its Sole Member

	
 

	
 

	
 

	
 

	
By: 

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: David
 I. Foley

	
 

	
 

	
Title:
 Senior Managing Director

	
 

	
 

	
 

	
 

	
BLACKSTONE
 FAMILY INVESTMENT PARTNERSHIP V USS L.P.

	
 

	
 

	
 

	
 

	
By: BCP V
 USS Side-by-Side GP L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: David
 I. Foley

	
 

	
 

	
Title:
 Senior Managing Director

	
 

	
 

	
 

	
 

	
BLACKSTONE
 FAMILY INVESTMENT PARTNERSHIP V-A USS SMD L.P.

	
 

	
 

	
 

	
 

	
By: Blackstone
 Family GP L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: David
 I. Foley

	
 

	
 

	
Title:
 Senior Managing Director

	
 

	
 

	
 

	
 

	
BLACKSTONE
 PARTICIPATION PARTNERSHIP V USS L.P.

	
 

	
 

	
 

	
 

	
By: BCP V
 USS Side-by-Side GP L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: David
 I. Foley

	
 

	
 

	
Title:
 Senior Managing Director

64

	
 

	
 

	
 

	
 

	
 

	
BLACKSTONE
 MEZZANINE PARTNERS II USS L.P.

	
 

	
 

	
 

	
 

	
By:
 Blackstone Mezzanine Associates II USS L.P., its General Partner

	
 

	
 

	
 

	
 

	
By:
 Blackstone Mezzanine Management Associates II USS L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: George
 Fan

	
 

	
 

	
Title:   Managing Director

	
 

	
 

	
 

	
 

	
BLACKSTONE
 MEZZANINE HOLDINGS II USS L.P.

	
 

	
 

	
 

	
 

	
By: BMP II
 USS Side by Side GP L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: George
 Fan

	
 

	
 

	
Title:   Managing Director

	
 

	
 

	
 

	
 

	
BLACKSTONE
 FAMILY MEZZANINE PARTNERSHIP II USS SMD L.P.

	
 

	
 

	
 

	
 

	
By:
 Blackstone Family GP L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	 

	
 

	
 

	
 

	
Name: George
 Fan

	
 

	
 

	
Title:   Managing Director

65

F&J COMMENTS: 6/30//09 TO

SRZ COMMENTS: 06/26/09

SUBJECT TO FRE 408

	
 

	
 

	
 

	
 

	
 

	
CERBERUS PARTNERS, L.P.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Cerberus Associates,
 L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
STYX PARTNERS, L.P.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Styx Associates, LLC, its
 General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
A3 FUNDING LP

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
A3 Fund Management LLC,
 its General Partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
USS PRODUCTS INVESTOR LLC

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Blackstone Capital
 Partners V USS L.P.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Blackstone Management
 Associates V L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
BMA V USS L.L.C., its Sole
 Member

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: David I. Foley

	
 

	
 

	
 

	
Title: Senior Managing
 Director

	
 

Schedule A

	
 

	
 

	
1.

	
Consolidated audited
 financial statements for the Fiscal Year ending December 31, 2008 pursuant to
 Section 8.2(a) of the LLC Agreement.10 

	
 

	
 

	
2.

	
Monthly reports for the
 months of May and June of 2009 pursuant to Section 8.2(f) of the LLC
 Agreement. 

	
 

	
 

	
3.

	
Quarterly reports for the
 Fiscal Quarters ending March 31 and June 30 of 2009 pursuant to Section
 8.2(c) of the LLC Agreement. 

	
 

	
 

	
4.

	
Annual operating budget
 for Products Investor for the 2009 Fiscal Year pursuant to Section 6.9 of the
 LLC Agreement. 

	
 

	
 

	
5.

	
Annual operating budget
 for each Vessel for the 2009 Fiscal Year. 

	
 

	
 

	
6.

	
Quarterly tax estimates
 for the Fiscal Quarter ended June 30, 2009, pursuant to Section 8.3(b) of the
 LLC Agreement. 

	
 

	
 

	
7.

	
Any and all materials
 received from NASSCO for the months of April, May and June of 2009. 

	
 

	
 

	
8.

	
Construction reports
 including status updates from the inspection team at the Shipyard (as defined
 in the Construction Contract) for the months of March, April, May and June of
 2009 pursuant to Section (2)(ii) of the Management Agreement. 

	
 

	
 

	 

	
 

	
10 The Blackstone/Cerberus Parties understand
 and acknowledge that these financial statements will show all the existing
 debt of the Joint Venture to be a current liability, and that all deferred
 financing costs will have been written off.

67

EXHIBIT A

ESCROW AGREEMENT

This Escrow Agreement (this
“Escrow Agreement”) dated as of July [ ], 2009, entered into by and
among JP Morgan Chase Bank N.A. (“Escrow Agent”), USS Product Manager
LLC (“Product Manager”) and Blackstone Capital Partners V USS, L.P. (“Blackstone
Entity”). 

RECITALS

WHEREAS, the Blackstone
Entity, Product Manager and certain other parties have entered into a
Settlement Agreement and Release dated as of July 10, 2009 (the “Settlement
Agreement”). This Escrow Agreement shall become effective upon the
occurrence of the Effective Date as defined in the Settlement Agreement; 

WHEREAS, the Blackstone
Entity and Product Manager desire that the Escrow Agent act as escrow agent for
the purpose of holding the Escrow Funds (as defined below) in the Escrow
Account (as defined below) and making payments as provided herein, and Escrow
Agent is willing to act in such capacity pursuant to the terms of this Escrow
Agreement; and 

WHEREAS, the Blackstone
Entity and Product Manager intend that the funds deposited into the Escrow
Account contemporaneously with the execution of this Agreement shall satisfy
the payments to Products Manager pursuant to paragraphs 4(a)-(c) of the
Settlement Agreement, subject to the terms and conditions of this Escrow
Agreement and the Settlement Agreement. 

NOW THEREFORE, 

The Blackstone Entity,
Product Manager and Escrow Agent hereby agree that, in consideration of the
mutual promises and covenants contained herein, Escrow Agent shall hold in
escrow and shall distribute the Escrow Funds in accordance with and subject to
the terms and conditions set forth herein: 

I. DEFINITIONS

1.        Certain Definitions

Capitalized terms used or
incorporated herein but not defined herein will have the meanings given to them
in the Settlement Agreement. 

II. INSTRUCTIONS

	
 

	
 

	
 

	
1.

	
Escrow
 Funds

	
 

	
 

	
 

	
 

	
(a)

	
On the Effective Date, the
 Blackstone/Cerberus Parties shall deposit with the Escrow Agent the amount
 required pursuant to paragraph 4 of the Settlement Agreement in immediately
 available funds (such amount, the “Deposit”). The Deposit shall be
 deposited with Escrow Agent in Account Number [•] (the “Escrow Account”).

	
 

	
 

	
 

	
 

	
(b)

	
The foregoing Deposit,
plus all interest, dividends, gains or other income earned with respect
thereto (if any), less any funds distributed or paid in accordance with this
Escrow Agreement, are collectively referred to herein as “Escrow Funds.”  

	
 

	
 

	
 

	
2.

	
Appointment of Escrow Agent

The Blackstone Entity and
Product Manager hereby appoint Escrow Agent, and Escrow Agent hereby agrees, to
act as custodian of the Escrow Funds, and to hold, invest, reinvest and
distribute the Escrow Funds in accordance with the instructions and terms and
conditions of this Escrow Agreement. The Escrow Agent shall, except to the
extent prohibited by law, segregate the funds credited to the Escrow Account
from its other funds held as an agent or in trust. 

	
 

	
 

	
 

	
3.

	
Investment
 of Escrow Funds 

	
 

	
 

	
 

	
 

	
(a)

	
Upon receipt of the
 Deposit, the Escrow Agent shall deposit Escrow Funds in a non-interest
 bearing account, unless otherwise instructed by the Blackstone Entity and
 Product Manager. JP Morgan Chase Bank N.A. is a participant in the FDIC’s
 Transaction Account Guarantee Program. A customer maintaining any non-interest
 bearing transaction account(s) at JP Morgan Chase Bank N.A. may benefit from
 the insurance coverage provided in the Program (the “Program”) in the
 form of a full guarantee by the FDIC of such account(s). The FDIC maintains
 the right to modify and/or interpret the provisions of the Program and,
 accordingly, the Escrow Agent may implement such modifications and/or
 interpretations at any time upon written notice to the Blackstone Entity and
 Product Manager. 

	
 

	
 

	
 

	
 

	
(b)

	
Escrow Agent shall have no
 liability for any loss arising from or related to any such investment other
 than in accordance with paragraph 4 of the Terms and Conditions sections of
 this Escrow Agreement. 

	
 

	
 

	
 

	
 

	
(c)

	
All interest, gains, and
 other income (if any) earned with respect to the Escrow Account (its “Escrow
 Earnings”) shall be credited to and held in such Escrow Account. 

	
 

	
 

	
 

	
4.

	
Distribution
 of Escrow Funds 

	
 

	
 

	
 

	
 

	
(a)

	
4(a) Payment Amount.

	
 

	
 

	
 

	
 

	
 

	
          (i)     On
 the Effective Date, Product Manager and the Blackstone Entity shall jointly
 execute and deliver to the Escrow Agent a certificate substantially in the
 form of Exhibit A attached hereto (the “Joint Instruction
 Certificate”) instructing the Escrow Agent to make a distribution of the
 amount set forth in the Joint Instruction Certificate (the “4(a) Payment
 Amount”) to Product Manager by wire transfer to the Product Manager
 Account identified on Schedule A to this Escrow Agreement or such
 other account as may be designated by Product Manager in writing to Escrow
 Agent from time to time (the “Product Manager Account”).

	
 

	
 

	
 

	
 

	
 

	
          (ii)     Upon
 receipt of the Joint Instruction Certificate, Escrow Agent shall as soon as
 practicable thereafter, release from the Escrow Account, and pay to Product
 Manager in immediately available funds the 4(a) Payment Amount in accordance
 with the disbursement instructions set forth in such Joint Instruction
 Certificate.

-2-

	
 

	
 

	
 

	
 

	
(b)

	
4(b) Payment Amount.

	
 

	
 

	
 

	
 

	
 

	
          (i)     No
 later than the 30th day following the conclusion of the Management
 Transition Period, Product Manager shall execute and deliver to the Escrow
 Agent a certificate substantially in the form of Exhibit B attached
 hereto (the “4(b) Request Certificate”) instructing the Escrow Agent
 to make a distribution from the Escrow Account of the amount required
 pursuant to paragraph 4(b) of the Settlement Agreement (the “4(b) Payment
 Amount”) to Product Manager by wire transfer to the Product Manager
 Account. 

	
 

	
 

	
 

	
 

	
 

	
          (ii)     At
 the time of delivery of the 4(b) Request Certificate, a duplicate copy of
 such certificate shall be delivered to the Blackstone Entity. On the 40th
 day following the conclusion of the Management Transition Period (or, if such
 date is not a business day, on the first business day after such date) (the “4(b)
 Payment Date”), the Escrow Agent shall release from the Escrow Account
 and pay to Product Manager from the Escrow Account in immediately available
 funds the 4(b) Payment Amount in accordance with the disbursement
 instructions set forth in the 4(b) Request Certificate, provided that such
 distribution shall not be made if the Blackstone Entity shall have filed a
 motion with the Bankruptcy Court requesting a determination that Product
 Manager is not entitled to receive the payment under paragraph 4(b) of the
 Settlement Agreement, such motion to have been filed with the Bankruptcy
 Court and a copy delivered by the Blackstone Entity to the Escrow Agent and
 Product Manager at least three days prior to the 4(b) Payment Date (a “4(b)
 Objection”).

	
 

	
 

	
 

	
 

	
(c)

	
4(c) Payment Amount.

	
 

	
 

	
 

	
 

	
 

	
          (i)     On
 the Effective Date, pursuant to paragraph 4(c) of the Settlement Agreement,
 Product Manager shall execute and deliver to the Escrow Agent a certificate
 substantially in the form of Exhibit C attached hereto (the “4(c)
 Request Certificate”) instructing the Escrow Agent to make monthly
 distributions from the Escrow Account on the amount set forth in the 4(c)
 Request Certificate, (each a “4(c) Payment Amount”), such 4(c) Payment
 Amount to be paid on the 17th day of each calendar month commencing with the
 first month after the Effective Date (each a “4(c) Payment Date”), by
 wire transfer to the Product Manager Account.

	
 

	
 

	
 

	
 

	
 

	
          (ii)     At
the time of delivery of the 4(c) Request Certificate, a duplicate copy of
such certificate shall be delivered to the Blackstone Entity. On each 4(c)
Payment Date, the Escrow Agent shall release from the Escrow Account and pay
to Product Manager from the Escrow Account in immediately available funds the
4(c) Payment Amount in accordance with the disbursement instructions set
forth in the 4(c) Request Certificate, provided that such distributions shall
not be made if the Blackstone Entity shall have filed a motion with the
Bankruptcy Court requesting a determination that Product Manager is not
entitled to receive payments under paragraph 4(c) of the Settlement
Agreement, such motion to have been filed with the Bankruptcy Court and a
copy delivered by the Blackstone Entity to the Escrow Agent and Product
Manager at least three days prior to a 4(c) Payment Date (a “4(c) Objection”). 

	
 

	
 

	
 

-3-

	
 

	
 

	
 

	
 

	
(d)

	
Resolution of Objection.

	
 

	
 

	
 

	
 

	
 

	
In the event that the
 Blackstone Entity shall deliver a 4(b) Objection or a 4(c) Objection, Product
 Manager and the Blackstone Entity shall attempt in good faith to agree upon
 the proper instructions to be given to the Escrow Agent with respect to such
 distribution(s) (if any) in accordance with the applicable provisions of the
 Settlement Agreement. If such parties should so agree, joint written instructions
 of such parties setting forth such agreement shall be prepared and signed by
 both parties and shall be furnished to the Escrow Agent. The Escrow Agent
 shall be entitled to rely on any such joint written instructions and make the
 one or more distributions (if any) from the Escrow Account. If no such
 agreement is reached after good faith negotiation, the Bankruptcy Court shall
 resolve the dispute.

	
 

	
 

	
 

	
The Escrow Agent will act
 solely on the instruction from the Product Manager and/or the Blackstone Entity
 as provided in paragraph 4 of this Escrow Agreement, and shall not be
 responsible for, nor chargeable with, knowledge of, nor have any requirements
 to comply with the terms and conditions of the Settlement Agreement.

	
 

	
 

	
 

	
5.

	
Addresses

Any notices, consents,
 waivers or other communications required or permitted to be given under the
 terms of the Escrow Agreement must be in writing and will be deemed to have
 been delivered: (i) upon receipt, when delivered personally; (ii) upon
 receipt, when sent by facsimile (provided confirmation of transmission is
 mechanically or electronically generated and kept on file by the sending
 party); or (iii) one Business Day after deposit with an overnight courier
 service, in each case properly addressed to the party to receive the same.
 The addresses and facsimile numbers for such communications shall be: 

	
 

	
 

	
 

	
 

	
(a)

	
If to the Escrow Agent: 

	
 

	
 

	
 

	
 

	
 

	
JP Morgan Chase Bank N.A.

	
 

	
 

	
Escrow Services

	
 

	
 

	
4 New York Plaza, 21st
 Floor

	
 

	
 

	
New York, NY 10004 

	
 

	
 

	
Attn: Andy Jacknick/Christopher
 Fasouletos

	
 

	
 

	
Telephone Number: (212)
 623-6224

	
 

	
 

	
Facsimile Transmission
 No.: (212) 623-6168 

-4-

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
If to the Blackstone
 Entity: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Blackstone Entity

	
 

	
 

	
 

	
c/o Blackstone Capital
 Partners V USS, L.P.

	
 

	
 

	
 

	
345 Park Avenue

	
 

	
 

	
 

	
29th Floor

	
 

	
 

	
 

	
New York, New York 10154

	
 

	
 

	
 

	
Attention: David I. Foley

	
 

	
 

	
 

	
Telephone Number: (212)
 583-5832

	
 

	
 

	
 

	
Facsimile Transmission No:
 (212) 583-5703 

	
 

	
 

	
 

	
with a copy (which shall
 not constitute notice) to (legal counsel): 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Schulte Roth & Zabel
 LLP

	
 

	
 

	
 

	
919 Third Avenue

	
 

	
 

	
 

	
New York, NY 10022

	
 

	
 

	
 

	
Attention: Adam C. Harris,
 Esq.

	
 

	
 

	
 

	
Telephone Number: (212)
 756-2253

	
 

	
 

	
 

	
Facsimile Number: (212)
 593-5955 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
If to Product Manager: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
USS Product Manager LLC

	
 

	
 

	
 

	
399 Thornall Street

	
 

	
 

	
 

	
Edison, New Jersey 08837

	
 

	
 

	
 

	
Attention: Joe Gehegan

	
 

	
 

	
 

	
Telephone Number:
 732-636-2701

	
 

	
 

	
 

	
Facsimile Number:
 732-635-1918 

	
 

	
 

	
 

	
with a copy (which shall
 not constitute notice) to (legal counsel): 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fulbright & Jaworski
 L.L.P.

	
 

	
 

	
 

	
666 Fifth Avenue

	
 

	
 

	
 

	
New York, New York 10103 

	
 

	
 

	
 

	
Attention: David Barrack
 and Roy L. Goldman

	
 

	
 

	
 

	
Telephone Number:
 212-318-3000

	
 

	
 

	
 

	
Facsimile: 212-318-3400 

Notwithstanding the above,
in the case of communications delivered to the Escrow Agent pursuant to (i),
(ii) and (iii) of this paragraph 5, such communications shall be deemed to have
been given on the date received by an officer of the Escrow Agent or any
employee of the Escrow Agent who reports directly to any such officer at the
above-referenced office. In the event that the Escrow Agent, in its sole
discretion, shall determine that an emergency exists, the Escrow Agent may use
such other means of communication as the Escrow Agent deems appropriate.
“Business Day” shall mean any day other than a Saturday, Sunday or any other
day on which the Escrow Agent located at the notice address set forth above is
authorized or required by law or executive order to remain closed. 

	
 

	
 

	
 

	
6.

	
Distribution of Escrow Funds
Upon Termination

	
 

	
Upon termination of the
 Escrow Agreement, any Escrow Funds then held hereunder shall be distributed
 to the Blackstone Entity. 

-5-

	
 

	
 

	
 

	
7.

	
Compensation

	
 

	
 

	
 

	
 

	
          (a)          On the Effective Date,
 Escrow Agent shall be paid a fee of $[ ], to be paid 50% by the Blackstone
 Entity and 50% by Product Manager, in consideration of the services to be
 provided by the Escrow Agent hereunder. 

	
 

	
 

	
 

	
 

	
          (b)          Promptly after receipt of
 documentation reasonably satisfactory to the Blackstone Entity and Product
 Manager, Escrow Agent shall be reimbursed upon demand for all reasonable and
 documented out-of-pocket expenses, disbursements and advances incurred or
 made by Escrow Agent in connection with this Escrow Agreement, in each case,
 to be paid 50% by the Blackstone Entity and 50% by Product Manager.

	
 

	
 

	
 

	
8.

	
Taxation
 of Escrow Earnings 

	
 

	
 

	
 

	
 

	
          (a)          The parties hereto agree
that, for tax reporting purposes, Product Manager shall be treated as the
owner of all Escrow Funds while held by Escrow Agent, and Escrow Agent shall,
for each calendar year (or portion thereof) for which the Escrow Funds are so
held report the interest, dividend and other income (the “Earnings”) earned
on the Escrow Funds on Internal Revenue Service Form 1099. On the tenth day
of each January, April, June and September, and on each date Escrow Funds are
released, in order to allow Product Manager to satisfy its income tax
liabilities with respect to the Earnings, the Escrow Agent shall release and
disburse to Product Manager in accordance with payment instructions on
Schedule A of the 4(c) Request Certificate, an amount of cash from the
Earnings in the Escrow Fund equal to the product of 40% and the total amount
of Earnings with respect to any period for which Product Manager has not
received a distribution under this Section 8(a).  

	
 

	
 

	
 

	
 

	
          (b)          Product Manager will
provide the Escrow Agent with its tax identification number by furnishing an
appropriate Internal Revenue Service Form W-9 and any other forms and
documents that the Escrow Agent may reasonably request (collectively, “Tax
Reporting Documentation”) to the Escrow Agent within 30 days after the date
hereof. The parties hereto understand that, if such Tax Reporting
Documentation is not so provided to the Escrow Agent, the Escrow Agent may be
required by the Internal Revenue Code of 1986, as amended, to withhold and
promptly remit to the Internal Revenue Service a portion of any interest or
other income earned on the investment of monies or other property held by the
Escrow Agent pursuant to this Escrow Agreement. 

	
 

	
 

	
 

	
III. TERMS AND CONDITIONS:

	
 

	
 

	
 

	
1.

	
The duties,
 responsibilities and obligations of Escrow Agent shall be limited to those
 expressly set forth herein and no duties, responsibilities or obligations
 shall be inferred or implied. Escrow Agent shall not be subject to, nor
 required to comply with, any other agreement between or among the Blackstone
 Entity or Product Manager or to which the Blackstone Entity or Product
 Manager are a party, even though reference thereto may be made herein, or to
 comply with any direction or instruction (other than those contained herein
 or delivered in accordance with this Escrow Agreement) from the Blackstone
 Entity or Product Manager or any entity acting on their behalf. Escrow Agent
 shall not be required to, and shall not, expend or risk any of its own funds
 or otherwise incur any financial liability in the performance of any of its
 duties hereunder, except in the case of its fraud, gross negligence or
 willful misconduct. 

-6-

	
 

	
 

	
2.

	
This Escrow
 Agreement is for the sole and exclusive benefit of the parties hereto and
 their respective successors hereunder, and shall not be deemed to give or
 confer, either express or implied, any legal or equitable right, remedy,
 benefit or claim to or upon any other entity or person whatsoever. 

	
 

	
 

	
3.

	
If at any
 time Escrow Agent is served with any judicial or administrative order,
 judgment, decree, writ or other form of judicial or administrative process
 which in any way affects the Escrow Funds (including but not limited to
 orders of attachment or garnishment or other forms of levies or injunctions
 or stays relating to the transfer of Escrow Funds) (each, an “Order”),
 Escrow Agent shall, within three (3) business days of receipt of such Order
 provide to the Blackstone Entity and Product Manager a courtesy copy of such
 Order (which shall include a copy of any written material provided with such
 Order). The Blackstone Entity, Product Manager and Escrow Agent shall use
 their reasonable best efforts to oppose or limit the effect of such Order.
 Escrow Agent is authorized to comply with such Order in any manner as it or
 its legal counsel of its own choosing deems reasonably appropriate; and if
 Escrow Agent reasonably complies with any such Order, Escrow Agent shall not
 be liable to any of the parties hereto or to any other person or entity even
 though such Order may be subsequently modified or vacated or otherwise
 determined to have been without legal force or effect. 

	
 

	
 

	
4.

	
          (a)          Escrow
 Agent shall not be liable for any action taken or omitted or for any loss or
 injury resulting from its actions or its performance or lack of performance
 of its duties hereunder in the absence of fraud, gross negligence or willful
 misconduct on its part. In no event shall Escrow Agent be liable (i) for
 acting in accordance with or relying upon any joint instruction, notice,
 demand, certificate or document from the Blackstone Entity or Product Manager
 or any entities acting on their behalf, in each case as permitted by this
 Escrow Agreement, (ii) for any consequential, punitive or special damages,
 (iii) for the acts or omissions of its nominees, correspondents, designees,
 subagents or subcustodians, or (iv) for an amount in excess of the value of
 the Escrow Funds, valued as of the date of deposit. 

	
 

	
 

	
 

	
          (b)          If
 any fees, expenses or costs incurred by, or any obligations owed to, Escrow
 Agent hereunder are not promptly paid when due, Escrow Agent shall give
 notice in writing to the Blackstone Entity and Product Manager of such
 failure to pay. If such fees, expenses or costs are not paid by the
 Blackstone Entity and Product Manager within ten (10) business days of such
 notice, Escrow Agent may reimburse itself therefor from the Escrow Funds and may
 sell, convey or otherwise dispose of any Escrow Funds for such purpose. 

	
 

	
 

	
 

	
          (c)          Escrow
 Agent may consult with legal counsel at the expense of the Blackstone Entity
 and Product Manager as to any matter relating to this Escrow Agreement, and
 Escrow Agent shall not incur any liability in acting in accordance with any
 advice from such counsel. 

	
 

	
 

	
 

	
          (d)          Escrow
 Agent shall not incur any liability for not performing any act or fulfilling
 any duty, obligation or responsibility hereunder by reason of any occurrence
 beyond the control of Escrow Agent (including but not limited to any act or
 provision of any present or future law or regulation or governmental
 authority, any act of God or war, or the unavailability of the Federal
 Reserve Bank wire or telex or other wire or communication facility).

-7-

	
 

	
 

	
5.

	
Unless
 otherwise specifically set forth herein, Escrow Agent shall proceed as soon
 as practicable to collect any checks or other collection items at any time
 deposited hereunder. All such collections shall be subject to Escrow Agent’s
 usual collection practices or terms regarding items received by Escrow Agent
 for deposit or collection. Escrow Agent shall not be required, or have any
 duty, to notify anyone of any payment or maturity under the terms of any
 instrument deposited hereunder, nor to take any legal action to enforce
 payment of any check, note or security deposited hereunder or to exercise any
 right or privilege which may be afforded to the holder of any such security. 

	
 

	
 

	
6.

	
Escrow Agent
 shall provide to the Blackstone Entity and Product Manager monthly statements
 identifying transactions, transfers or holdings of Escrow Funds and each such
 statement shall be deemed to be correct and final upon receipt thereof by
 each of the Blackstone Entity and Product Manager unless Escrow Agent is
 notified in writing to the contrary within thirty (30) business days of the
 date of such statement. 

	
 

	
 

	
7.

	
Escrow Agent
 shall not be responsible in any respect for the form, execution, validity,
 value or genuineness of documents or securities deposited hereunder, or for
 any description therein, or for the identity, authority or rights of persons
 executing or delivering or purporting to execute or deliver any such
 document, security or endorsement. 

	
 

	
 

	
8.

	
Escrow Agent
 is authorized to comply with and rely upon any notices, instructions or other
 communications actually received by it and believed by it to have been sent
 or given jointly by the Blackstone Entity and Product Manager or by a person
 or persons authorized by them. Whenever under the terms hereof the time for
 giving a notice or performing an act falls upon a Saturday, Sunday, or
 banking holiday, such time shall be extended to the next day on which Escrow
 Agent is open for business. 

	
 

	
 

	
9.

	
The
 Blackstone Entity and Product Manager, jointly and severally, shall be liable
 for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent
 harmless from and against any and all claims, losses, liabilities, costs,
 damages or expenses (including reasonable attorneys’ fees and expenses)
 (collectively, “Losses”) arising from or in connection with or related
 to this Escrow Agreement or being Escrow Agent hereunder (including but not
 limited to Losses incurred by Escrow Agent in connection with its successful
 defense, in whole or in part, of any claim of fraud, gross negligence or
 willful misconduct on its part), provided, however, that nothing contained
 herein shall require Escrow Agent to be indemnified for Losses caused by its
 fraud, gross negligence or willful misconduct. 

	
 

	
 

	
10.

	
          (a)          The
 Blackstone Entity and Product Manager may jointly remove Escrow Agent at any
 time by giving to Escrow Agent thirty (30) calendar days’ prior notice in
 writing signed by the Blackstone Entity and Product Manager. Escrow Agent may
 resign at any time by giving to the Blackstone Entity and Product Manager
 thirty (30) calendar days’ prior written notice thereof; provided, however,
 that no such resignation shall be effective until a successor agent
 reasonably acceptable to the Blackstone Entity and Product Manager shall have
 been appointed and such appointment shall have been accepted by such
 successor escrow agent and Escrow Agent shall have delivered all Escrow Funds
 and any instruments in which the Escrow Funds have been invested in
 accordance with this Escrow Agreement to such successor escrow agent.

-8-

	
 

	
 

	
 

	
          (b)          Within
 twenty (20) calendar days after giving the foregoing notice of removal to
 Escrow Agent or receiving the foregoing notice of resignation from Escrow
 Agent, the Blackstone Entity and Product Manager shall jointly agree on and
 appoint a successor Escrow Agent. Any such successor escrow agent shall agree
 to be bound by the terms of this Escrow Agreement and shall, upon receipt of
 the Escrow Funds and any instruments in which the Escrow Funds have been
 invested in accordance with this Escrow Agreement, become Escrow Agent
 hereunder. If a successor Escrow Agent has not accepted such appointment by
 the end of such 20-day period, Escrow Agent may, in its sole discretion,
 apply to a court of competent jurisdiction for the appointment of a successor
 Escrow Agent or for other appropriate relief. The costs and expenses
 (including reasonable attorneys’ fees and expenses) incurred by Escrow Agent
 in connection with such proceeding shall be paid by, and be deemed a joint
 and several obligation of, the Blackstone Entity and Product Manager. 

	
 

	
 

	
 

	
          (c)          Upon
 receipt of the identity of the successor Escrow Agent, Escrow Agent shall
 deliver the Escrow Funds then held hereunder to the successor Escrow Agent,
 less Escrow Agent’s fees, costs and expenses or other obligations owed to
 Escrow Agent. 

	
 

	
 

	
 

	
          (d)          Upon
 proper delivery of the Escrow Funds to a successor Escrow Agent in accordance
 with the terms hereof, Escrow Agent shall have no further duties,
 responsibilities or obligations hereunder. 

	
 

	
 

	
11. 

	
          (a)          In
 the event of any ambiguity or uncertainty hereunder or in any notice,
 instruction or other communication received by Escrow Agent hereunder, Escrow
 Agent may, in its sole discretion, refrain from taking any action other than
 retain possession of the Escrow Funds, unless Escrow Agent receives written
 instructions, signed by the Blackstone Entity and Product Manager, which
 eliminates such ambiguity or uncertainty.

	
 

	
 

	
 

	
          (b)          In
 the event of any dispute between or conflicting claims by or among the
 Blackstone Entity and Product Manager and/or any other person or entity with
 respect to any Escrow Funds, Escrow Agent shall be entitled, in its sole
 discretion, to refuse to comply with any and all claims, demands or
 instructions with respect to such Escrow Funds so long as such dispute or
 conflict shall continue, and Escrow Agent shall not be or become liable in
 any way to the Blackstone Entity or Product Manager for failure or refusal to
 comply with such conflicting claims, demands or instructions. Escrow Agent
 shall be entitled to refuse to act until, in its sole discretion, either (i)
 such conflicting or adverse claims or demands shall have been determined by a
 final order, judgment or decree of the Bankruptcy Court, which order,
 judgment or decree is not subject to appeal, or settled by agreement between
 the conflicting parties as evidenced in a writing satisfactory to Escrow
 Agent or (ii) Escrow Agent shall have received security or an indemnity
 satisfactory to it sufficient to hold it harmless from and against any and
 all Losses which it may incur by reason of so acting. Escrow Agent may, in
 addition, elect, in its sole discretion, to commence in the Bankruptcy Court
 an interpleader action or seek other judicial relief or orders as it may
 deem, in its sole discretion, necessary. The costs and expenses (including
 reasonable attorneys’ fees and expenses) incurred in connection with such
 proceeding shall be paid by, and shall be deemed a joint and several
 obligation of, the Blackstone Entity and Product Manager.

-9-

	
 

	
 

	
12.

	
This Escrow
 Agreement shall be interpreted, construed, enforced and administered in
 accordance with the internal substantive laws (and not the choice of law
 rules) of the State of New York and the United States. Each of the Blackstone
 Entity, Product Manager and the Escrow Agent hereby submits to the personal
 jurisdiction of and each agrees that all proceedings relating hereto shall be
 brought in the Bankruptcy Court. Each of the Blackstone Entity, Product
 Manager and the Escrow Agent hereby waives the right to trial by jury. To the
 extent that in any jurisdiction the Blackstone Entity, Product Manager or the
 Escrow Agent may be entitled to claim, for itself or its assets, immunity
 from suit, execution, attachment (whether before or after judgment) or other
 legal process, each hereby irrevocably agrees not to claim, and hereby
 waives, such immunity. Each of the Blackstone Entity, Product Manager and the
 Escrow Agent waives personal service of process and consents to service of
 process by certified or registered mail, return receipt requested, directed
 to it at the address last specified for notices hereunder, and such service
 shall be deemed completed ten (10) business days after the same is so mailed.
 

	
 

	
 

	
13.

	
This Escrow
 Agreement may be amended, waived or otherwise modified only by a written
 amendment or waiver signed by all the parties hereto or, in the case of a
 waiver, by the party or parties hereto against whom the waiver is to be
 effective. No failure or delay by any party hereto in exercising any right,
 power or privilege hereunder shall operate as a waiver thereof. 

	
 

	
 

	
14.

	
The rights
 and remedies conferred upon the parties hereto shall be cumulative, and the
 exercise or waiver of any such right or remedy shall not preclude or inhibit
 the exercise of any additional rights or remedies. The waiver of any right or
 remedy hereunder shall not preclude the subsequent exercise of such right or
 remedy. 

	
 

	
 

	
15.

	
Each of the
 Blackstone Entity, Product Manager and the Escrow Agent hereby represents and
 warrants, individually and not with respect to any other party to this Escrow
 Agreement (a) that this Escrow Agreement has been duly authorized, executed
 and delivered on its behalf and constitutes its legal, valid and binding
 obligation and (b) that the execution, delivery and performance of this Escrow
 Agreement by itself do not and will not violate any applicable law or
 regulation.

	
 

	
 

	
16.

	
The
 invalidity, illegality or unenforceability of any provision of this Escrow
 Agreement shall in no way affect the validity, legality or enforceability of
 any other provision; and if any provision is held to be enforceable as a
 matter of law, the other provisions shall not be affected thereby and shall
 remain in full force and effect. 

	
 

	
 

	
17.

	
This Escrow
 Agreement, along with the Settlement Agreement, shall constitute the entire
 agreement of the parties with respect to the subject matter and supersedes
 all prior oral or written agreements in regard thereto, and to the extent
 there is a conflict between the two agreements, the Settlement Agreement
 shall control. 

	
 

	
 

	
18.

	
Upon
 distribution of the final installment of the 4(c) Payment Amount to Product
 Manager pursuant to paragraph 5(c)(1) hereof, this Escrow Agreement shall
 terminate. The provisions of these Terms and Conditions shall survive
 termination of this Escrow Agreement and/or the resignation or removal of the
 Escrow Agent.

-10-

	
 

	
 

	
19.

	
No printed
 or other material in any language, including prospectuses, notices, reports,
 and promotional material which mentions “JP Morgan Chase Bank N.A.” by name
 or the rights, powers, or duties of the Escrow Agent under this Escrow
 Agreement shall be issued by any other parties hereto, or on such party’s
 behalf, without the prior written consent of Escrow Agent.

	
 

	
 

	
20.

	
The headings
 contained in this Escrow Agreement are for convenience of reference only and
 shall have no effect on the interpretation or operation hereof. 

	
 

	
 

	
21.

	
This Escrow
 Agreement may be executed by each of the parties hereto in any number of
 counterparts, each of which counterpart, when so executed and delivered,
 shall be deemed to be an original and all such counterparts shall together
 constitute one and the same agreement.

	
 

	
 

	
22.

	
The Escrow
 Agent does not have any interest in the Escrow Funds deposited hereunder but
 is serving as escrow holder only and having only possession thereof. The
 Blackstone Entity and Product Manager, jointly and severally, shall pay or
 reimburse the Escrow Agent upon request for any transfer taxes or other taxes
 relating to the Escrow Funds incurred in connection herewith and shall
 indemnify and hold harmless the Escrow Agent any amounts that it is obligated
 to pay in the way of such taxes. Any payments of income from the Escrow
 Accounts shall be subject to withholding regulations then in force with
 respect to United States taxes. It is understood that the Escrow Agent shall
 be responsible for income reporting only with respect to income earned on
 investment of funds which are a part of the Escrow Funds and is not
 responsible for any other reporting. 

	
 

	
 

	
23.

	
Neither this
 Escrow Agreement nor any of the rights, interests or obligations hereunder
 may be assigned by any party hereto (whether by operation of law or
 otherwise) without the prior written consent of the other parties hereto, and
 any attempted or purported assignment in violation of this paragraph 23 will
 be null and void; provided that this Escrow Agreement (including the rights,
 interests and obligations hereunder) may be assigned by the Blackstone Entity
 by operation of any reorganization, restructuring, consolidation, merger or
 similar transaction of the Blackstone Entity. 

	
 

	
 

	
24.

	
Except as
 expressly provided in paragraphs 4(b) and 4(c) of the Terms and Conditions
 herein, Escrow Agent hereby waives any and all rights to offset that it may
 have against the Escrow Funds including, without limitation, claims arising
 as a result of any claims, amounts, liabilities, costs, expenses, damages, or
 other losses that Escrow Agent may be otherwise entitled to collect from any
 party to this Escrow Agreement or any of their respective affiliates.

	
 

	
 

	
25.

	
Compliance with Court Orders. In the event
 that any escrow property shall be attached, garnished or levied upon by any
 court order, or the delivery thereof shall be stayed or enjoined by an order
 of a court, or any order, judgment or decree shall be made or entered by any
 court order affecting the property deposited under this Escrow Agreement, the
 Escrow Agent is hereby expressly authorized, in its sole discretion, to obey
 and comply with all writs, orders or decrees so entered or issued, which it
 is advised by legal counsel of its own choosing is binding upon it, whether
 with or without jurisdiction, and in the event that the Escrow Agent obeys or
 complies with any such writ, order or decree it shall not be liable to any of
 the parties hereto or to any other person, entity, firm or corporation, by
 reason of such compliance notwithstanding such writ, order or decree be
 subsequently reversed, modified, annulled, set aside or vacated.

-11-

	
 

	
 

	
26.

	
Patriot Act Disclosure. Section 326 of the
 Uniting and Strengthening America by Providing Appropriate Tools Required to
 Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”)
 requires the Escrow Agent to implement reasonable procedures to verify the
 identity of any person that opens a new account with it. Accordingly, the
 parties acknowledge that Section 326 of the USA PATRIOT Act and the Escrow
 Agent’s identity verification procedures require the Escrow Agent to obtain
 information which may be used to confirm the parties identity including
 without limitation name, address and organizational documents (“identifying
 information”). The parties agree to provide the Escrow Agent with and consent
 to the Escrow Agent obtaining from third parties any such identifying
 information required as a condition of opening an account with or using any
 service provided by the Escrow Agent.

Security Procedures. In
the event funds transfer instructions are given (other than in writing at the
time of execution of this Escrow Agreement), whether in writing, by facsimile
or otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons designated on
schedule 1 hereto (“Schedule 1”), and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated.
Each funds transfer instruction shall be executed by an authorized signatory, a
list of such authorized signatories is set forth on Schedule 1. The persons and
telephone numbers for call-backs may be changed only in a writing actually
received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to
contact any of the authorized representatives identified in Schedule 1, the
Escrow Agent is hereby authorized to seek confirmation of such instructions by
telephone call-back to any one or more of Blackstone Entity or the Product
Manger’s executive officers, (“Executive Officers”), as the case may be,
which shall include the titles of______________________, as the Escrow Agent
may select. Such “Executive Officer” shall deliver to the Escrow Agent a fully
executed incumbency certificate, and the Escrow Agent may rely upon the
confirmation of anyone purporting to be any such officer. The Escrow Agent and
the beneficiary’s bank in any funds transfer may rely solely upon any account
numbers or similar identifying numbers provided by Blackstone Entity and the
Product Manager to identify (a) the beneficiary, (b) the beneficiary’s bank, or
(c) an intermediary bank. The Escrow Agent may apply any of the escrowed funds
for any payment order it executes using any such identifying number, even when
its use may result in a person other than the beneficiary being paid, or the
transfer of funds to a bank other than the beneficiary’s bank or an intermediary
bank designated. The parties acknowledge that these security procedures are
commercially reasonable.

-12-

IN WITNESS
WHEREOF, each of the parties has caused this Escrow Agreement to be executed by
a duly authorized officer as of the day and year first written above.

	
 

	
 

	
 

	
  BLACKSTONE
 CAPITAL PARTNERS V USS, L.P.

	 

	
 

	
 

	
  By:
 

	
BLACKSTONE
 MANAGEMENT

	
 

	
ASSOCIATES V
 L.L.C., its General Partner

	
 

	
 

	
  By:
 

	
BMA V USS
 L.L.C., its Sole Member

	
 

	
 

	
  By:

	
 

	
 

	 

	
 

	
 

	
Name: David
 Foley 

	
 

	
Title:   Senior Managing Director

	
 

	
 

	
 

	
 

	
 

	
  USS
 PRODUCT MANAGER LLC

	
 

	
 

	
  By:

	
 

	
 

	 

	
 

	
 

	
Name:

	
 

	
Title:

	
 

	
  JP
 Morgan Chase Bank N.A., as Escrow Agent

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
  By:

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

SCHEDULE 1

          Telephone Number(s) and authorized
signature(s) for Person(s) Designated to give Funds Transfer Instructions

If to Blackstone Entity:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name

	
 

	
Telephone Number

	
 

	
Signature

	
 

	
 

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
2.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
3.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
If to Product Manager:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name

	
 

	
Telephone Number

	
 

	
Signature

	
 

	
 

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
2.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
3.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	 

	
 

	 

	
 

EXHIBIT A
 JOINT INSTRUCTION CERTIFICATE

[DATE]                         

JP Morgan
Chase Bank N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004

Attn: Andy
Jacknick/Christopher Fasouletos

          Re:
Account
#[               ]

Gentlemen:

                    Reference
is made to the Escrow Agreement, dated as of July [ ], 2009 (the “Escrow
Agreement”), entered into by and among JP Morgan Chase Bank N.A. (“Escrow
Agent”), USS Product Manager LLC (“Product Manager”) and Blackstone
Capital Partners V USS, L.P. (“Blackstone Entity”).

                    Capitalized
terms not defined herein shall have the meanings assigned to them in the Escrow
Agreement.

                    The
instructions set forth in this letter constitute the Joint Instruction
Certificate given pursuant to Section II; Paragraph 4(a) of the Escrow
Agreement.

                    Pursuant
to Section II; Paragraph 4(a) of the Escrow Agreement, Product Manager and the
Blackstone Entity hereby jointly instruct the Escrow Agent to disburse the
aggregate amount of _____________ Dollars ($_________)11 from the Escrow
Account to Product Manager in accordance with the written payment instructions
of Product Manager (which are attached hereto as Schedule A). 

                    The
Blackstone Entity and Product Manager hereby agree that the disbursement of the
4(a) Payment Amount from the Escrow Account to Product Manager in accordance
with the provisions of this letter constitutes full payment of the amount
required by Section II; Paragraph 4(a) of the Escrow Agreement and Section 4(a)
of the Settlement Agreement, to be released by the Escrow Agent on the
Effective Date.

	
 

	
 

	 

	
 

	
11 Such amount to be $9,000,000 less 50% of the amount of Interim Management Fees
actually paid to Product Manager between the date of the Settlement Agreement
and the Effective Date. 

                    The
amount of the Escrow Account not disbursed pursuant to the foregoing provisions
of this letter shall remain subject to the terms and conditions of the Escrow
Agreement.

                    Please
acknowledge your receipt of this letter by your signature below where indicated
and your return of this letter, as so acknowledged, to Adam C. Harris, Esq. of
Schulte Roth & Zabel LLP, by facsimile to (212) 593-5955 and to David Barrack
and Roy L. Goldman, of Fulbright & Jaworski L.L.P., by facsimile to (212)
318-3400. 

	
 

	
 

	
 

	
Very truly
 yours,

	
 

	
 

	
 

	
 

	
 

	
 

	
BLACKSTONE
 CAPITAL PARTNERS V USS, L.P.

	
 

	 

	 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
By:

	
BLACKSTONE
 MANAGEMENT

	
 

	
 

	
 

	
ASSOCIATES V
 L.L.C., its General Partner

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
BMA V USS
 L.L.C., its Sole Member

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
Name: David
 Foley

	
 

	
 

	
 

	
Title:
 Senior Managing Director

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
USS PRODUCT
 MANAGER LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Acknowledged:

	
 

	
JP Morgan
 Chase Bank N.A., as Escrow Agent

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

SCHEDULE A

Payment Instructions

of Product Manager

	
 

	
 

	
 

	
Name of Bank:

	
 

	
ABA Number:

	
 

	
Name of Account:

	
 

	
Account Number:

	
 

	
Ref: 

EXHIBIT B

4(b) REQUEST CERTIFICATE

	
 

	
 

	
 

	
[DATE] 

JP Morgan
Chase Bank N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004 

Attn: Andy
Jacknick/Christopher Fasouletos

          Re:
Account #[          ]

Gentlemen: 

                    Reference
is made to the Escrow Agreement, dated as of July [ ], 2009 (the “Escrow
Agreement”), entered into by and among JP Morgan Chase Bank N.A. (“Escrow
Agent”), USS Product Manager LLC (“Product Manager”) and Blackstone
Capital Partners V USS, L.P. 

                    Capitalized
terms not defined herein shall have the meanings assigned to them in the Escrow
Agreement. 

                    The
instructions set forth in this letter constitute the 4(b) Request Certificate
given pursuant to Section II; Paragraph 4(b) of the Escrow Agreement. 

                    Pursuant
to Section II; Paragraph 4(b) of the Escrow Agreement, Product Manager hereby
instructs the Escrow Agent to disburse the aggregate amount of _____________
Dollars ($_________)12 from the Escrow Account to Product Manager on
____, 2009, being the 40th day following the conclusion of the Management
Transition Period in accordance with the written payment instructions of
Product Manager (which are attached hereto as Schedule A). 

                    Product
Manager hereby agrees that the disbursement of the 4(b) Payment Amount from the
Escrow Account to Product Manager in accordance with the provisions of this
letter constitutes full payment of the amount required by Section II; Paragraph
4(b) of the Escrow Agreement and Section 4(b) of the Settlement Agreement to be
released by the Escrow Agent on the 4(b) Payment Date. 

                    The
amount of the Escrow Account not disbursed pursuant to the foregoing provisions
of this letter shall remain subject to the terms and conditions of the Escrow
Agreement. 

	
 

	
 

	 

	
 

12 Such amount to be $2,300,000 less 50% of
the amount of Interim Management Fees actually paid to Product Manager between
the date of the Settlement Agreement and the Effective Date. 

                    Please
acknowledge your receipt of this letter by your signature below where indicated
and your return of this letter, as so acknowledged, to Adam C. Harris, Esq. of
Schulte Roth & Zabel LLP, by facsimile to (212) 593-5955 and to David Barrack
and Roy L. Goldman, of Fulbright & Jaworski L.L.P., by facsimile to (212)
318-3400. 

	
 

	
 

	
 

	
 

	
 

	
        Very truly yours,

	
 

	
 

	
 

	
 

	
USS PRODUCT
 MANAGER LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Acknowledged:

	
 

	
 

	
JP Morgan
 Chase Bank N.A., as Escrow Agent

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
 

	
Name:

	
 

	
Title:

SCHEDULE A

Payment Instructions 

of Product Manager

	
 

	
 

	
 

	
Name of Bank:

	
 

	
ABA Number:

	
 

	
Name of Account:

	
 

	
Account Number:

	
 

	
Ref:

EXHIBIT C

4(c) REQUEST CERTIFICATE

	
 

	
 

	
 

	
[DATE] 

JP Morgan
Chase Bank N.A. 

Escrow Services 

4 New York Plaza, 21st Floor 

New York, NY 10004 

Attn: Andy
Jacknick/Christopher Fasouletos 

          Re:
Account
#[             ]

Gentlemen: 

                    Reference
is made to the Escrow Agreement, dated as of July [ ], 2009 (the “Escrow
Agreement”), entered into by and among JP Morgan Chase Bank N.A. (“Escrow
Agent”), USS Product Manager LLC (“Product Manager”) and Blackstone
Capital Partners V USS, L.P. 

                    Capitalized
terms not defined herein shall have the meanings assigned to them in the Escrow
Agreement. 

                    The
instructions set forth in this letter constitute the 4(c) Request Certificate
given pursuant to Section II; Paragraph 4(c) of the Escrow Agreement. 

                    Pursuant
to Section II; Paragraph 4(c) of the Escrow Agreement, Product Manager hereby
instructs the Escrow Agent to disburse from the Escrow Account to Product
Manager an aggregate amount of _________ Dollars ($_____________) (the “Aggregate
4(c) Payment Amount”), paid in equal monthly installments through December
2010, on the 17th day of each calendar month commencing ______13 17,
2009 in accordance with the written payment instructions of Product Manager
(which are attached hereto as Schedule A). 

                    Product
Manager hereby agrees that the disbursement of the Aggregate 4(c) Payment
Amount from the Escrow Account to Product Manager in accordance with the
provisions of this letter shall constitute full payment of the amount required
by Section II; Paragraph 4(c) of the Escrow Agreement and Section 4(c) of the
Settlement Agreement. 

                    The
amount of the Escrow Account not disbursed pursuant to the foregoing provisions
of this letter shall remain subject to the terms and conditions of the Escrow
Agreement.

* * *

	
 

	
 

	
 

	 

	
 

	
13

	
The first
 month after the Effective Date

          Please
acknowledge your receipt of this letter by your signature below where indicated
and your return of this letter, as so acknowledged, to Adam C. Harris, Esq. of
Schulte Roth & Zabel LLP, by facsimile to (212) 593-5955 and to David
Barrack and Roy L. Goldman, of Fulbright & Jaworski L.L.P., by facsimile to
(212) 318-3400.

	
 

	
 

	
 

	
 

	
 

	
     Very
 truly yours,

	
 

	
 

	
 

	
USS PRODUCT
 MANAGER LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	 	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Acknowledged:

	
 

	
 

	
 

	
 

	
JP Morgan
 Chase Bank N.A., as Escrow Agent

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	 	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

SCHEDULE A

Payment Instructions

of Product Manager

	
 

	
 

	
 

	
Name
 of Bank:

	
 

	
ABA
 Number:

	
 

	
Name
 of Account:

	
 

	
Account
 Number:

	
 

	
Ref:

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