SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

EXHIBIT 10.2

SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

          THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 24, 2005 (this “Amendment”), is entered into by and among U.S. SHIPPING PARTNERS L.P., a Delaware limited partnership, U.S. SHIPPING OPERATING LLC, a Delaware limited liability company, ITB BALTIMORE LLC, a Delaware limited liability company, ITB GROTON LLC, a Delaware limited liability company, ITB JACKSONVILLE LLC, a Delaware limited liability company, ITB MOBILE LLC, a Delaware limited liability company, ITB NEW YORK LLC, a Delaware limited liability company, ITB PHILADELPHIA LLC, a Delaware limited liability company, USS CHARTERING LLC, a Delaware limited liability company, USCS CHEMICAL CHARTERING LLC, a Delaware limited liability company, USCS CHEMICAL PIONEER INC., a Delaware corporation and successor-by-conversion to USCS Chemical Pioneer LLC, USCS CHARLESTON LLC, a Delaware limited liability company, USCS CHARLESTON CHARTERING LLC, a Delaware limited liability company, USCS ATB LLC, a Delaware limited liability company (each of the foregoing being individually called a “Borrower” and collectively, the “Borrowers”), the various financial institutions as are or may become parties to the Credit Agreement as defined hereinafter (collectively, the “Lenders”), CANADIAN IMPERIAL BANK OF COMMERCE (“CIBC”), as administrative agent (in such capacity together with its successors in such capacity, the “Administrative Agent”) for the Lenders, CIBC, as letter of credit issuer (the “Letter of Credit Issuer”), and KEYBANK NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors in such capacity, the “Collateral Agent”) for the Secured Parties (as defined in the Credit Agreement hereinafter defined).

W I T N E S S E T H:

          WHEREAS, the Borrowers, the Lenders, the Letter of Credit Issuer, the Administrative Agent and the Collateral Agent have entered into that certain Second Amended and Restated Credit Agreement dated as of November 3, 2004, as amended by the certain First Amendment to Second Amended and Restated Credit Agreement dated as of August 1, 2005 (as further amended, restated or otherwise modified, the “Credit Agreement”).

          WHEREAS, the Borrowers, the Lenders, the Letter of Credit Issuer, the Administrative Agent and the Collateral Agent intend to amend certain provisions of the Credit Agreement as set forth herein.

          NOW THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, the parties hereto agree as follows:

          SECTION 1.          Definitions.  Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning assigned to such term in the Credit Agreement.

          SECTION 2.          Amendment of Section 1.1 of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended as follows:

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          SECTION 3.          Amendment of Section 4.10 of the Credit Agreement.  Section 4.10 of the Credit Agreement is hereby amended (a) by inserting the text “including the payment of construction costs for the ATB provided that the aggregate amount of the construction costs incurred pursuant to the ATB Construction Contract does not exceed $53,100,000,” immediately after the text “permitted Capital Expenditures” in clause (i), and (b) by deleting the text “in an amount not to exceed $45,600,000” in clause (iii). 

          SECTION 4.          Amendment of Section 7.1.1 of the Credit Agreement.  Clause (a) of Section 7.1.1 of the Credit Agreement is hereby amended by inserting the text “and each New ATB Construction Contract” immediately after the text “pursuant to the ATB Construction Contract”. 

          SECTION 5.          Amendment of Section 7.1.8 of the Credit Agreement.  Section 7.1.8 of the Credit Agreement is hereby amended (i) by replacing the text “the ATB, any contracts executed with the ATB Contractor with respect to the ATB” with the text “the ATB, each New ATB, any contracts executed with the ATB Contractor with respect to the ATB or any New ATB” and (ii) by inserting the text “, deliver a Third Party Consent, substantially in the form of Exhibit K-2, duly executed and delivered by the respective charterer, with respect to each Material Charter executed after the Closing Date, not later than 180 days immediately following the execution of such Material Charter” immediately after the text “equipment, chattel paper, and instruments”.

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          SECTION 6.          Amendment of Section 7.2.2 of the Credit Agreement.  Clause (e) of Section 7.2.2 of the Credit Agreement is hereby deleted in its entirety and replaced with the following text:

          SECTION 7.          Amendment of Section 7.2.7 of the Credit Agreement.  Clause (a) of Section 7.2.7 of the Credit Agreement is hereby amended (i) by inserting the text “or any New ATB” immediately after the text “expenditures for the ATB” and immediately before the text “, expenditures for the purchase of the M/V Gus W. Darnell pursuant to the Darnell Acquisition Agreement and refurbishment of the M/V Gus W. Darnell in an amount not to exceed $30,000,000 in the aggregate,”, (ii) by inserting the text “pursuant to a Vessel Acquisition or” immediately after the text “Vessels constructed or acquired” and immediately before the text “with the proceeds of any Credit Extensions”, and (iii) by replacing the text “acquire any Vessel (other than the ATB)” with the text “acquire any Vessel (other than the ATB or any New ATB) pursuant to a Vessel Acquisition or”. 

          SECTION 8.          Amendment of Section 7.2.11 of the Credit Agreement.  Section 7.2.11 of the Credit Agreement is hereby amended by inserting the text “or any New ATB Construction Contract” immediately after the text “or the ATB Construction Contract”.

          SECTION 9.          Addition of Section 7.2.15 to the Credit Agreement.  Article VII of the Credit Agreement is hereby amended by inserting the following new Section 7.2.15 in the appropriate place: 

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          SECTION 10.          Limited Waiver Consent of Section 7.2.12(a) of the Credit Agreement.  The Lenders, the Administrative Agent, the Letter of Credit Issuer and the Collateral Agent do hereby consent to a waiver of Section 7.2.12(a) of the Credit Agreement for the limited purpose of permitting an amendment and other modifications to the ATB Construction Contract that, among other things, extend the construction completion date of the ATB to November 30, 2006, increase construction costs to be paid by the Borrowers in an amount not to exceed $7,500,000, and establish a daily penalty rate of $30,000 to be paid by the ATB Contractor for each day delay in delivery of the ATB beyond November 30, 2006; provided that (i) the terms of such amendment and other modifications are reasonably satisfactory to the Administrative Agent, and (ii) the instruments with respect to security supporting the performance of the ATB Contractor under the ATB Construction Contract are simultaneously amended to provide terms that are more favorable in the aggregate to the Borrowers than the existing terms and that are reasonably satisfactory to the Administrative Agent.  Except as expressly set forth herein, no portion of this Section 10 shall be deemed or interpreted in any way to be a waiver of any provision of the Credit Agreement or any other Loan Document or of any right, power or remedy under the Credit Agreement or any other Transaction Document or applicable law.

          SECTION 11.          Ratification.  Each Borrower hereby ratifies and confirms all of the Obligations under the Credit Agreement and the other Loan Documents.  This Amendment is an amendment to the Credit Agreement, and the Credit Agreement as amended hereby, is hereby ratified, approved and confirmed in each and every respect.

          SECTION 12.          Effectiveness.  This Amendment shall be effective as of the date first written above, provided that the conditions set forth in this Section 12 are satisfied:

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          SECTION 13.          Governing Law; Severability; Entire Agreement.  THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).  Any provision of this Amendment or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.  This Amendment and the other Transaction Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. 

          SECTION 14.          Execution in Counterparts.  This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

          SECTION 15.          Successors and Assigns.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that (a) no Borrower may assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent, the Letter of Credit Issuer and all Lenders; and (b) the rights of sale, assignment and transfer of the Lenders are subject to Section 10.11 of the Credit Agreement. 

          SECTION 16.          Miscellaneous.  (a) On and after the effectiveness of this Amendment, each reference in each Transaction Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended or otherwise modified by this Amendment; (b) the execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any default of the Borrower or any right, power or remedy of the Administrative Agent, the Letter of Credit Issuer, the Collateral Agent or the Lenders under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents; (c) this Amendment is a Loan Document executed pursuant to the Credit Agreement and shall

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(unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement; and (d) a facsimile signature of any party hereto shall be deemed to be an original signature for purposes of this Amendment.

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by its officers thereunto duly authorized as of the date first above written.

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