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Exhibit
4.1
AMENDMENT NO. 1 TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
U.S. SHIPPING PARTNERS L.P.
This
Amendment No. 1, dated as of August 7, 2006 (this “
Amendment ”), to the Amended and Restated Agreement of
Limited Partnership, dated as of November 3, 2004 (the “
Partnership Agreement ”), of U.S. Shipping Partners
L.P., a Delaware limited partnership (the “
Partnership ”), is entered into and effectuated by US
Shipping General Partner LLC, a Delaware limited liability company,
as the general partner of the Partnership (the “ General
Partner ”), pursuant to authority granted to it in
Article XIII of the Partnership Agreement. Capitalized terms
used but not defined herein are used as defined in the Partnership
Agreement.
WHEREAS,
Section 5.6(a) of the Partnership Agreement provides that the
Partnership may issue additional Partnership Securities for any
Partnership purpose at any time and from time to time to such
Persons for such consideration and on such terms and conditions as
the General Partner shall determine, all without the approval of
any Limited Partners;
WHEREAS,
Section 5.6(b) of the Partnership Agreement provides that the
Partnership Securities authorized to be issued by the Partnership
pursuant to such Section 5.6(a) of the Partnership Agreement may be
issued in one or more classes, or one or more series of any such
classes, with such designations, preferences, rights, powers and
duties as shall be fixed by the General Partner;
WHEREAS,
in connection with the Partnership’s entry into a joint
venture to construct product tankers, in which the Partnership owns
a minority interest but has control of the board of directors of
the joint venture, the Partnership desires to amend the definition
of “Subsidiary” to exclude the joint
venture;
WHEREAS,
the Partnership has determined that certain provisions of the
Partnership Agreement described in the final prospectus included in
the Registration Statement were inadvertently omitted from the
Partnership Agreement;
WHEREAS,
Section 13.1(d)(iv) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partner, may
amend any provision of the Partnership Agreement that is required
to effect the intent expressed in the Registration
Statement;
WHEREAS,
Section 13.1(g) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partner
(subject to the provisions of Section 5.7 of the Partnership
Agreement), may amend any provision of the Partnership Agreement
that the General Partner determines to be necessary or appropriate
in connection with the authorization of the issuance of any class
or series of Partnership Securities pursuant to Section 5.6 of the
Partnership Agreement;
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WHEREAS,
Section 13.1(j) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partner, may
amend any provision of the Partnership Agreement that, in the
discretion of the Company Board, is necessary or advisable to
reflect, account for and deal with appropriately the formation by
the Company of, or investment by the Company in, any corporation,
partnership, joint venture, limited liability company or other
entity, in connection with the conduct by the Company of activities
permitted by the terms of Section 2.4 of the Partnership
Agreement,
WHEREAS,
the Board of Directors of the General Partner (the “
Board ”) has determined that the issuance of the Class
B Convertible Units provided for in this Amendment is permitted by
Section 5.7 of the Partnership Agreement;
WHEREAS,
Section 13.1(d) of the Partnership Agreement provides that the
General Partner, without the approval of any Partner, may amend any
provision of the Partnership Agreement to reflect a change that the
General Partner determines does not adversely affect the Limited
Partners (including any particular class of Partnership Interests
as compared to other classes of Partnership Interests) in any
material respect; and
WHEREAS,
the Board deems it in the best interest of the Partnership to
effect this Amendment to provide for (i) the issuance of Common
Units and Class B Convertible Units to certain accredited investors
pursuant to a Common Unit and Class B Unit Purchase Agreement,
dated as of August 4, 2006, (ii) the conversion of such Class B
Convertible Units into Common Units in accordance with the terms
described herein, (iii) the amendment of the definition of
“Subsidiary” to exclude the joint venture, (iv) the
amendment of the definition of “Available Cash” to
reflect the intent of the Registration Statement by conforming such
definition to that contained in the Registration Statement and (v)
such other matters as are provided herein.
NOW,
THEREFORE, it is hereby agreed that the Partnership Agreement is
hereby amended as follows:
1. Section
1.1 of the Partnership Agreement is hereby amended to add or amend
and restate the following definitions:
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“
Basic Surplus ” means, with respect to any period
ending prior to the Liquidation Date, on a cumulative basis and
without duplication,
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(a) the
sum of (i) $10 million, (ii) all cash and cash equivalents of the
Partnership Group on hand as of the close of business on the
Closing Date, (iii) all cash receipts of the Partnership Group for
the period beginning on the Closing Date and ending on the last day
of such period, other than cash receipts from Interim Capital
Transactions (except to the extent specified in Section 6.5), (iv)
all cash receipts of the Partnership Group after the end of such
period but on or before the date of determination of Basic Surplus
with respect to such period resulting from Working Capital
Borrowings and (v) the amount of interest paid on debt incurred and
distributions paid on equity issued, in each case in connection
with the construction of a Capital Improvement or replacement asset
and paid during the period beginning on the date that the
Partnership enters into a binding obligation to commence
construction
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of such
Capital Improvement or replacement asset and ending on the earlier
to occur of the date that such Capital Improvement or replacement
asset Commences Commercial Service or the date that it is abandoned
or disposed of (equity issued or debt incurred to fund the
construction period interest payments on debt incurred, or
construction period distributions on equity issued, to finance the
construction of a Capital Improvement or replacement asset shall
also be deemed to be equity issued or debt incurred, as the case
may be, to finance the construction of a Capital Improvement or
replacement asset for purposes of this clause (v)), less
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(b) the
sum of (i) Operating Expenditures for the period beginning on the
Closing Date and ending on the last day of such period and (ii) the
amount of cash reserves established by the General Partner to
provide funds for future Operating Expenditures; provided, however,
that disbursements made (including contributions to a Group Member
or disbursements on behalf of a Group Member) or cash reserves
established, increased or reduced after the end of such period but
on or before the date of determination of Available Cash with
respect to such period shall be deemed to have been made,
established, increased or reduced, for purposes of determining
Basic Surplus, within such period if the General Partner so
determines.
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Notwithstanding
the foregoing, “ Basic Surplu s” with respect to
the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero.
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“
Class B Distribution Increase Date ” has the meaning
assigned to such term in Section 5.12(g).
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“
Class B Convertible Unit Arrearage ” means, with
respect to any Class B Convertible Unit, whenever used, as to any
Quarter, the amount, if any, by which (a) the Minimum Quarterly
Distribution in respect of such Quarter (or, for the period from
the Class B Distribution Increase Date through the Conversion
Effective Date, 115% of the Minimum Quarterly Distribution) exceeds
(b) the sum of all Available Cash distributed with respect to a
Class B Convertible Unit in respect of such Quarter pursuant to
Section 5.12(b)(ii)(B)(x).
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“
Class B Convertible Units ” means a Partnership
Security representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees, and having the
rights and obligations specified with respect to the Class B
Convertible Units in this Agreement. The term “
Class B Convertible Unit ” does not refer to (a) a
Common Unit prior to the conversion of a Class B Convertible Unit
into a Common Unit pursuant to the terms hereof or (b) a
Subordinated Unit.
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“C
onversion Approval ” has the meaning assigned to such
term in Section 5.12(f).
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“
Conversion Approval Date ” has the meaning assigned to
such term in Section 5.12(f).
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“
Conversion Effective Date ” has the meaning assigned
to such term in Section 5.12(h).
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“
Cumulative Class B Convertible Unit Arrearage ” means,
with respect to any Class B Convertible Unit, whenever used, as of
the end of any Quarter, the excess, if any, by which (a) the sum
resulting from adding together the Class B Convertible Unit
Arrearages for each of the Quarters during which any Class B
Convertible Unit has been Outstanding exceeds (b) the sum of any
distributions theretofore made to a Class B Convertible Unit
pursuant to Section 5.12(b)(ii)(B) and the penultimate sentence of
Section 6.5 (including any distributions to be made in respect of
the last of such Quarters).
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“E
xcess Payment ” has the meaning set forth in Section
5.12(b)(vi)(B) (as set forth in Section 5.12(g)).
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“
Initial Unit Price ” means (a) with respect to the
Common Units, the Class B Convertible Units, the Class A
Subordinated Units and the Class B Subordinated Units, the initial
public offering price per Common Unit at which the Underwriters
offered the Common Units to the public for sale as set forth on the
cover page of the prospectus included as part of the Registration
Statement and first issued at or after the time the Registration
Statement first became effective or (b) with respect to any other
class or series of Units, the price per Unit at which such class or
series of Units is initially sold by the Partnership, as determined
by the General Partner, in each case adjusted as the General
Partner determines to be appropriate to give effect to any
distribution, subdivision or combination of Units.
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“
Issue Price ” means the price at which a Unit is
purchased from the Partnership, after taking into account any sales
commission or underwriting discount charged to the Partnership and
after taking into account any other form of discount with respect
to the price at which a Unit is purchased from the Partnership;
provided, however, in the case of the Class B Convertible
Units, the Issue Price shall be deemed to be $17.12 per unit and in
the case of the Privately Placed Common Units, $18.34 per
unit.
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“
Private Placement Value ” means with respect to the
Class B Convertible Units and the Privately Placed Common Units,
$20.99 per unit.
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“
Privately Placed Common Units ” means the Common Units
issued pursuant to the Unit Purchase Agreement.
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“
Remaining Net Positive Adjustments ” means, as of the
end of any taxable period, (i) with respect to the Unitholders
holding Common Units, Class B Convertible Units, Class A
Subordinated Units or Class B Subordinated Units, the excess of (a)
the Net Positive Adjustments of the Unitholders holding Common
Units, Class B Convertible Units, Class A Subordinated Units or
Class B Subordinated Units as of the end of such period exceeds (b)
the sum of those Partners’ Share of Additional Book Basis
Derivative Items for each prior taxable period, (ii) with respect
to the General Partner (as holder of the General Partner Interest),
the amount by which (a) the Net Positive Adjustments of the General
Partner as of the end of such period exceeds (b) the sum of the
General Partner’s Share of Additional Book Basis Derivative
Items with respect to the General Partner Interest for each prior
taxable period, and (iii) with respect to the holders of
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Incentive
Distribution Rights, the amount by which (a) the Net Positive
Adjustments of the holders of Incentive Distribution Rights as of
the end of such period exceeds (b) the sum of the Share of
Additional Book Basis Derivative Items of the holders of the
Incentive Distribution Rights for each prior taxable
period.
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“
Share of Additional Book Basis Derivative Items ”
means, in connection with any allocation of Additional Book Basis
Derivative Items for any taxable period, (i) with respect to the
Unitholders holding Common Units, Class B Convertible Units, Class
A Subordinated Units or Class B Subordinated Units, the amount that
bears the same ratio to such Additional Book Basis Derivative Items
as the Unitholders’ Remaining Net Positive Adjustments as of
the end of such period bears to the Aggregate Remaining Net
Positive Adjustments as of that time, (ii) with respect to the
General Partner (as holder of the General Partner Interest), the
amount that bears the same ratio to such additional Book Basis
Derivative Items as the General Partner’s Remaining Net
Positive Adjustments as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustment as of that time, and
(iii) with respect to the Partners holding Incentive Distribution
Rights, the amount that bears the same ratio to such Additional
Book Basis Derivative Items as the Remaining Net Positive
Adjustments of the Partners holding the Incentive Distribution
Rights as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustments as of that time.
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“
Subsidiary ” means, with respect to any Person, (a) a
corporation of which more than 50% of the voting power of shares
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors or other governing body of such
corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general
or limited) in which such Person or a Subsidiary of such Person is,
at the date of determination, a general or limited partner of such
partnership, but only if more than 50% of the partnership interests
of such partnership (considering all of the partnership interests
of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or
more Subsidiaries of such Person, or a combination thereof, or (c)
any other Person (other than a corporation or a partnership) in
which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person; provided,
however , that U.S. Product Investors LLC shall not be a
Subsidiary of the Company for purposes of this
Agreement.
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“
Unit ” means a Partnership Security that is designated
as a “Unit” and shall include Common Units, Class B
Convertible Units and Class A Subordinated Units, Class B
Subordinated Units but shall not include (i) a General Partner
Interest or (ii) Incentive Distribution Rights.
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“
Unit Majority ” means, during the Class A
Subordination Period, a majority of the Outstanding Common Units
(excluding Common Units owned by the General Partner and its
Affiliates) voting as a class, a majority of the Class B
Convertible Units voting as
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a class,
and a majority of the Outstanding Class A Subordinated Units and
Class B Subordinated Units voting as a single class, and, after the
end of the Class A Subordination Period, a majority of the
Outstanding Units.
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“
Unit Purchase Agreement ” means the Common Unit and
Class B Unit Purchase Agreement, dated as of August 4, 2006, among
the Partnership and the purchasers named therein.
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“
Unitholders ” means the holders of Common Units, Class
B Convertible Units and Subordinated Units.
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2. Section
1.1 of the Partnership Agreement is hereby further amended to amend
and restate the final sentence of the definition of “Common
Unit” as follows:
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The
term “ Common Unit ” does not refer to a
Subordinated Unit or a Class B Convertible Unit prior to its
conversion into a Common Unit pursuant to the terms
hereof.
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3. Section
4.5(f) of the Partnership Agreement is hereby amended and restated
to read in its entirety:
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Subject
to Section 4.10, the General Partner and its Affiliates shall have
the right at any time to transfer their Class A Subordinated Units,
Class B Subordinated Units, Class B Convertible Units and Common
Units (whether issued upon conversion of the Subordinated Units,
the Class B Convertible Units or otherwise) to one or more Persons
who are U.S. Citizens.
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4. Section
4.8(c) of the Partnership Agreement is hereby amended and restated
to read in its entirety:
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(c) The
transfer of a Subordinated Unit shall be subject to the
restrictions imposed by Section 6.7(b). The transfer of a
Class B Convertible Unit or a Privately Placed Common Unit shall be
subject to the restrictions imposed by Section 6.7(c).
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5. Section
5.5(a) of the Partnership Agreement is hereby amended to add the
following at the end of such section:
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The
initial Capital Account balance in respect of each Class B
Convertible Unit shall be the Private Placement Value for such
Class B Convertible Unit, and the initial Capital Account balance
of each holder of Class B Convertible Units in respect of all Class
B Convertible Units held shall be the product of such initial
balance for a Class B Convertible Unit multiplied by the number of
Class B Convertible Units held thereby. The initial Capital
Account balance in respect of each Privately Placed Common Unit
shall be the Private Placement Value for such Privately Placed
Common Unit, and the initial Capital Account balance of each holder
of Privately Placed Common Units in respect of all Privately Placed
Common Units held shall be the product of such initial balance for
a Privately Placed Common Unit multiplied by the number of
Privately Placed Common Units held thereby. Immediately
following the creation of a Capital
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Account
balance in respect of each Class B Convertible Unit, each
Unitholder acquiring a Class B Convertible Unit at original
issuance shall be deemed to have received a cash distribution in
respect of such Class B Convertible Units in an amount equal to the
product of (x) the total number of Class B Convertible Units so
acquired by such Unitholder, multiplied by (y) the difference
between the Private Placement Value and the Issue Price of a
Class
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