10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2014
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from . . . . . . . . . . . .  to . . . . . . . . . . . . . .

Commission File No. 001-10852

International Shipholding Corporation

(Exact name of registrant as specified in its charter)

Delaware	36-2989662
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11 North Water Street, Suite 18290,   Mobile, Alabama	36602
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (251) 243-9100

Former name, former address and former fiscal year, if changed since last report:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☑                                No   ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  ☑                                No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

     Large accelerated filer ☐                                                                                                                         Accelerated filer  ☑

     Non-accelerated filer   ☐                                                                                                           Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐No   ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $1 par value. . . . . . . . 7,301,657 shares outstanding as of September 30, 2014

1

INTERNATIONAL SHIPHOLDING CORPORATION

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS (unaudited)	3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)	3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	4
CONDENSED CONSOLIDATED BALANCE SHEETS	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	8
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
ITEM 3 – QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK	60
ITEM 4 – CONTROLS AND PROCEDURES	62
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS	62
ITEM 1A – RISK FACTORS	62
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	83
ITEM 6 – EXHIBITS	84

In this report, the terms “we,” “us,” “our” and the “Company” refer to International Shipholding Corporation and its subsidiaries.  In addition, the term “Notes” means the Notes to our Consolidated Financial Statements contained elsewhere in this report, the term “PCTC” means a Pure Car Truck Carrier vessel, the term “FSI” refers to Frascati Shops, Inc., the term “UOS” refers to United Ocean Services, LLC, and the term “SEC” means the U.S. Securities and Exchange Commission.

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PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(All Amounts in Thousands Except Share Data)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Revenues	$	74,410	$	77,938	$	223,856	$	233,959
Operating Expenses:
Voyage Expenses		60,600		63,311		184,499		191,262
Intangible Amortization		1,029		1,521		3,087		4,669
Vessel Depreciation		6,290		6,130		19,528		17,705
Other Depreciation		18		17		54		51
Administrative and General Expenses		5,398		4,994		16,209		16,597
Loss on Sale of Other Assets		1		6		1		6
Total Operating Expenses		73,336		75,979		223,378		230,290
Operating Income		1,074		1,959		478		3,669
Interest and Other:
Interest Expense		3,115		3,109		7,301		7,387
Derivative (Gain) Loss		(89)		768		(57)		486
Other Income from Vessel Financing		(456)		(522)		(1,417)		(1,616)
Investment Income		(278)		(9)		(302)		(91)
Foreign Exchange Loss (Gain)		30		457		123		(4,560)
		2,322		3,803		5,648		1,606
(Loss) Income Before Benefit for Income Taxes and Equity in Net Income of Unconsolidated Entities		(1,248)		(1,844)		(5,170)		2,063
Provision for Income Taxes:		1,141		18		912		68
Equity in Net Loss of Unconsolidated Entities (Net of Applicable Taxes)		(176)		(360)		(364)		(705)
Net (Loss) Income	$	(2,565)	$	(2,222)	$	(6,446)	$	1,290
Preferred Stock Dividends		1,305		1,076		3,916		1,920
Net (Loss) Income Available to Common Stockholders	$	(3,870)	$	(3,298)	$	(10,362)	$	(630)
Basic Earnings Per Common Share:	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)
Diluted Earnings Per Common Share:	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)
Weighted Average Shares of Common Stock Outstanding:
Basic		7,301,657		7,248,350		7,278,695		7,233,807
Diluted		7,301,657		7,248,350		7,278,695		7,233,807
Common Stock Dividends Per Share	$	0.25	$	0.25	$	0.75	$	0.75

The accompanying notes are an integral part of these statements.

3

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(All Amounts in Thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net (Loss) Income	$	(2,565)	$	(2,222)	$	(6,446)	$	1,290
Other Comprehensive Income (Loss):
Unrealized Foreign Currency Translation Loss		(84)		(307)		(67)		(61)
Change in Fair Value of Derivatives		457		780		422		2,289
Change in Funded Status of Defined Benefit Plan		74		306		225		927
Comprehensive (Loss) Income	$	(2,118)	$	(1,443)	$	(5,866)	$	4,445

The accompanying notes are an integral part of these statements.

4

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(All Amounts in Thousands Except Shares)

(Unaudited)

	September 30,		December 31,
ASSETS	2014		2013
Cash and Cash Equivalents	$	21,024	$	20,010
Restricted Cash		1,387		8,499
Accounts Receivable, Net of Allowance for Doubtful Accounts		39,751		30,417
Prepaid Expenses		10,518		8,493
Deferred Tax Asset		633		3,084
Other Current Assets		1,038		1,029
Notes Receivable		3,204		3,987
Material and Supplies Inventory		11,243		11,322
Total Current Assets		88,798		86,841
Investment in Unconsolidated Entities		22,472		14,818
Vessels, Property, and Other Equipment, at Cost:
Vessels		630,090		582,416
Building		1,354		1,211
Land		623		623
Leasehold Improvements		26,348		26,348
Construction in Progress		4,867		2,673
Furniture and Equipment		12,272		11,727
		675,554		624,998
Less -  Accumulated Depreciation		(196,302)		(175,106)
		479,252		449,892
Other Assets:
Deferred Charges, Net of Accumulated Amortization		25,984		29,309
Intangible Assets, Net of Accumulated Amortization		25,669		28,756
Due from Related Parties		2,083		1,974
Notes Receivable		25,256		27,659
Goodwill		2,735		2,735
Deferred Tax Asset		8,866		7,325
Other		4,940		7,383
		95,533		105,141
TOTAL ASSETS	$	686,055	$	656,692

The accompanying notes are an integral part of these statements.

5

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(All Amounts in Thousands Except Shares)

(Unaudited)

	September 30,		December 31,
	2014		2013
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Maturities of Long-Term Debt	$	23,347	$	19,213
Accounts Payable and Other Accrued Expenses		54,901		51,220
Total Current Liabilities		78,248		70,433
Long-Term Debt, Less Current Maturities		230,156		179,016
Other Long-Term Liabilities:
Incentive Obligation		8,872		5,397
Other		47,046		65,306
TOTAL LIABILITIES		364,322		320,152
Stockholders' Equity:
Preferred Stock, $1.00 Par Value, 9.50% Series A Cumulative Perpetual
Preferred Stock, 650,000 Shares Authorized, 250,000 Shares Issued and
Outstanding at September 30, 2014 and December 31, 2013, Respectively		250		250
Preferred Stock, $1.00 Par Value, 9.00% Series B Cumulative Perpetual
Preferred Stock, 350,000 Shares Authorized, 316,250 Shares Issued and
Outstanding at September 30, 2014 and December 31, 2013, Respectively		316		316
Common Stock, $1.00 Par Value, 20,000,000 Shares Authorized,
7,301,657 and 7,203,935 Shares Issued and Outstanding at
September 30, 2014 and December 31, 2013, Respectively		8,727		8,692
Additional Paid-In Capital		140,624		140,115
Retained Earnings		210,549		226,480
Treasury Stock, 1,388,078 Shares at September 30, 2014 and
1,388,066 shares at  December 31, 2013		(25,403)		(25,403)
Accumulated Other Comprehensive Loss		(13,330)		(13,910)
TOTAL STOCKHOLDERS' EQUITY		321,733		336,540
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	686,055	$	656,692

The accompanying notes are in an integral part of these statements.

6

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All Amounts in Thousands Except Shares)

(Unaudited)

	Nine Months Ended September 30,
		2014		2013
Cash Flows from Operating Activities:
Net (Loss) Income	$	(6,446)	$	1,290
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by
Operating Activities:
Depreciation		20,073		18,068
Amortization of Deferred Charges		14,615		7,525
Amortization of Intangible Assets		3,087		4,669
Deferred Tax		912		-
Non-Cash Share Based Compensation		1,185		1,023
Equity in Net Loss of Unconsolidated Entities		364		705
Loss on Sale of Assets		1		6
Loss (Gain) on Foreign Currency Exchange		123		(4,560)
Changes in:
Deferred Drydocking Charges		(7,037)		(14,445)
Accounts Receivable		(5,210)		3,415
Inventories and Other Current Assets		(2,703)		257
Other Assets		(961)		760
Accounts Payable and Accrued Liabilities		1,748		2,375
Other Long-Term Liabilities		(4,426)		4,561
Net Cash Provided by Operating Activities		15,325		25,649
Cash Flows from Investing Activities:
Principal payments received under Direct Financing Leases		-		558
Capital Improvements to Vessels and Other Assets		(64,710)		(27,963)
Investment in Unconsolidated Entities		(7,887)		(500)
Net Decrease (Increase) in Restricted Cash Account		9,112		(7,825)
Acquisition of United Ocean Services, LLC, net of cash acquired		-		(2,475)
Proceeds from Payments on Note Receivables		3,186		4,895
Net Cash Used In Investing Activities		(60,299)		(33,310)
Cash Flows from Financing Activities:
Issuance of Preferred Stock		-		53,336
Proceeds from Issuance of Debt		94,545		67,000
Repayment of Debt		(38,190)		(94,788)
Additions to Deferred Financing Charges		(987)		(2,005)
Dividends Paid		(9,380)		(6,526)
Net Cash Provided by Financing Activities		45,988		17,017
Net Increase in Cash and Cash Equivalents		1,014		9,356
Cash and Cash Equivalents at Beginning of Period		20,010		19,868
Cash and Cash Equivalents at End of Period	$	21,024	$	29,224
Supplemental Disclosure of non-cash investing activities
Additions to vessels, property, plant and equipment included in accounts payable and other accrued expenses	$	1,434	$	2,453

The accompanying notes are an integral part of these statements.

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

(Unaudited)

Note 1.  Basis of Preparation

We operate a diversified fleet of U.S. and International flag vessels that provide international and domestic maritime transportation services. For additional information on our business, see Item 2 of Part I of this report.

We have prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, and as permitted hereunder, we have omitted certain information and footnote disclosures required by U.S. Generally Accepted Accounting Principles (GAAP) for complete financial statements.  We suggest that you read these interim statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013.  The condensed consolidated balance sheet as of December 31, 2013 included in this report has been derived from the audited financial statements at that date.

The foregoing 2014 interim results are not necessarily indicative of the results of operations for the full year 2014.  Management believes that it has made all adjustments necessary, consisting only of normal recurring adjustments, for a fair statement of the information presented.

Our policy is to consolidate each subsidiary in which we hold a greater than 50% voting interest or otherwise control its operating and financial activities.  We use the equity method to account for investments in entities in which we hold a 20% to 50% voting or economic interest and have the ability to exercise significant influence over operating and financial activities, and the cost method to account for investments in entities in which we hold a less than 20% voting interest and in which we cannot exercise significant influence over operating and financial activities.

Revenues and expenses relating to our Rail-Ferry, Jones Act, and Specialty segments’ voyages are recorded over the duration of the voyage based on percentage of completion.  Our voyage expenses are estimated at the beginning of the voyages based on historical actual costs or from industry sources familiar with those types of charges.  As the voyage progresses, these estimated costs are revised with actual charges and timely adjustments are made.  Based on our prior experience, we believe there is not a material difference between recording estimated expenses ratably over the voyage versus recording expenses as incurred.  Revenues and expenses relating to our other vessels’ voyages, which require limited estimates or assumptions, are recorded when earned or incurred during the reporting period.

We have eliminated all significant intercompany balances, accounts, and transactions in consolidation.

Certain amounts in the condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. Such reclassifications primarily relate to a related party receivable that was reclassified as other current assets versus note receivable in the balance sheet.

Note 2.  Out of Period Adjustments

During 2014, an error was identified related to the cutoff of voyage revenues between the first and second quarter of 2014 which would have resulted in an increase in revenue and an increase in voyage expenses for the quarter ended March 31, 2014.  During the three months ended June 30, 2014 we recorded an out of period adjustment to correct this error.  The impact of correcting this error resulted in an increase to pre-tax income of$108,000 and a  decrease to net loss by $61,000.  We evaluated the impact of this error on the results of our previously issued financial statements for the first quarter of 2014 and concluded that the impact was not

8

material. We also evaluated the impact of correcting the error in the second quarter of 2014 and concluded that the impact was not material.

Note 3.  Operating Segments

Our six operating segments, Jones Act, Pure Car Truck Carriers, Dry Bulk Carriers, Rail-Ferry, Specialty Contracts, and Other are distinguished primarily by the market in which the segment assets are deployed, the physical characteristics of those assets, and the type of services provided to our customers. We report in the Other category the results of several of our subsidiaries that provide ship and cargo charter brokerage, ship management services and agency services to our operating subsidiaries as well as third party customers.  Also included in the Other category are corporate related items, results of insignificant operations, and income and expense items not allocated to the other reportable segments. We manage each reportable segment separately, as each requires different resources depending on the nature of the contract or terms under which the vessels within the segment operate. 

We allocate interest expense to the segments in proportion to the fixed assets (defined as the carrying value of vessels, property, and other equipment) within each segment.  Additionally, we include the results of two of our unconsolidated entities, Oslo Bulk, AS and  Oslo Bulk Holding Pte. Ltd, in our Dry Bulk Carriers segment, and the results of another unconsolidated entity, Terminales Transgolfo, S.A. de C.V., to our Rail-Ferry segment.  The results of our remaining unconsolidated entities, Saltholmen Shipping Ltd (a company owning two Chemical Tankers) and Brattholmen Shipping Ltd (a company owning two Asphalt Tankers), are included in our Specialty Contracts segment.  We do not allocate to our segments; (i) administrative and general expenses, (ii) (loss) gain on sale of other assets, (iii) derivative (income) loss, (iv) income taxes, (v) loss (gain) on sale of investment, (vi) other income from vessel financing, (vii) investment income, and (viii) foreign exchange loss (gain).  Intersegment revenues are based on market prices and include revenues earned by our subsidiaries that provide specialized services to our operating companies. Finally, we use “gross voyage profit” as the primary measure for our segments’ profitability to assist in monitoring and managing our business.

9

The following table presents information about segment profit and loss for the three months ended September 30, 2014 and 2013:

RESULTS OF OPERATIONS

three MONTHS ENDED September 30, 2014

COMPARED TO THE three MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	32,101		$	15,290		$	1,910		$	-		$	9,462		$	-		$	58,763
Variable Revenue		-			3,520			1,786			9,435			1,497			(591)			15,647
Total Revenue from External Customers		32,101			18,810			3,696			9,435			10,959			(591)			74,410
Intersegment Revenues(Eliminated)		-			-			-			-			-			(4,321)			(4,321)
Intersegment Expenses Eliminated		-			-			-			-			-			4,321			4,321
Voyage Expenses		25,340			16,199			2,933			7,940			10,351			(1,134)			61,629
Loss (Income) of Unconsolidated Entities		-			-			373			81			(278)			-			176
Gross Voyage Profit	$	6,761		$	2,611		$	390		$	1,414		$	886		$	543		$	12,605
Gross Voyage Profit Margin		21	%		14	%		11	%		15	%		8	%		92	%		17	%
2013
Fixed Revenue	$	31,003		$	14,843		$	919		$	-		$	7,928		$	-		$	54,693
Variable Revenue		-			7,990			4,634			10,419			227			(25)			23,245
Total Revenue from External Customers		31,003			22,833			5,553			10,419			8,155			(25)			77,938
Intersegment Revenues (Eliminated)		-			-			-			-			-			(5,519)			(5,519)
Intersegment Expenses Eliminated		-			-			-			-			-			5,519			5,519
Voyage Expenses		24,400			19,728			4,801			8,494			7,602			(193)			64,832
Loss of Unconsolidated Entities		-			-			315			45			-			-			360
Gross Voyage Profit	$	6,603		$	3,105		$	437		$	1,880		$	553		$	168		$	12,746
Gross Voyage Profit Margin		21	%		14	%		8	%		18	%		7	%		(672)	%		16	%

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The following table presents information about segment profit and loss for the nine months ended September 30, 2014 and 2013:

RESULTS OF OPERATIONS

NINE MONTHS ENDED September 30, 2014

COMPARED TO THE NINE MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	94,408		$	46,200		$	5,194		$	-		$	26,650		$	-		$	172,452
Variable Revenue		-			11,319			8,881			27,101			4,624			(521)			51,404
Total Revenue from External Customers		94,408			57,519			14,075			27,101			31,274			(521)			223,856
Intersegment Revenues(Eliminated)		-			-			-			-			-			(12,963)			(12,963)
Intersegment Expenses Eliminated		-			-			-			-			-			12,963			12,963
Voyage Expenses		77,370			50,355			9,992			22,874			28,826			(1,831)			187,586
Loss (Income) of Unconsolidated Entities		-			-			542			148			(326)			-			364
Gross Voyage Profit	$	17,038		$	7,164		$	3,541		$	4,079		$	2,774		$	1,310		$	35,906
Gross Voyage Profit Margin		18	%		12	%		25	%		15	%		9	%		(252)	%		16	%
2013
Fixed Revenue	$	90,581		$	48,043		$	2,457		$	-		$	21,519		$	-		$	162,600
Variable Revenue		-			27,755			12,183			29,115			2,253			53			71,359
Total Revenue from External Customers		90,581			75,798			14,640			29,115			23,772			53			233,959
Intersegment Revenues (Eliminated)		-			-			-			-			-			(16,557)			(16,557)
Intersegment Expenses Eliminated		-			-			-			-			-			16,557			16,557
Voyage Expenses		72,106			63,574			14,688			23,894			22,100			(431)			195,931
Loss of Unconsolidated Entities		-			-			653			52			-			-			705
Gross Voyage Profit (Loss)	$	18,475		$	12,224		$	(701)		$	5,169		$	1,672		$	484		$	37,323
Gross Voyage Profit Margin		20	%		16	%		(5)	%		18	%		7	%		913	%		16	%

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The following table is a reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements:

	Three Months Ended September 30,				Year to date as of September 30,
(All Amounts in Thousands)		2014		2013		2014		2013
Revenues	$	74,410	$	77,938	$	223,856	$	233,959
Voyage Expenses*		61,629		64,832		187,586		195,931
Net Loss of Unconsolidated Entities		176		360		364		705
Gross Voyage Profit		12,605		12,746		35,906		37,323
Vessel Depreciation		6,290		6,130		19,528		17,705
Other Depreciation		18		17		54		51
Gross Profit		6,297		6,599		16,324		19,567
Other Operating Expenses:
Administrative and General Expenses		5,398		4,994		16,209		16,597
Loss on Sale  of Other Assets		1		6		1		6
Less:  Net Loss of Unconsolidated Entities		(176)		(360)		(364)		(705)
Total Other Operating Expenses		5,223		4,640		15,846		15,898
Operating Income	$	1,074	$	1,959	$	478	$	3,669
* Includes Intangible Amortization

Note  4.  Inventory

Spare parts and warehouse inventories are stated at the lower of cost or market based on the first-in, first-out method of accounting. Our fuel inventory is based on the average inventory method of accounting. Our inventory consists of three major classes, the break out of which is included in the following table:

(All Amounts in Thousands)		September 30,		December 31,
Inventory Classes		2014		2013
Spare Parts Inventory	$	4,195	$	3,968
Fuel Inventory		4,547		4,663
Warehouse Inventory		2,501		2,691
	$	11,243	$	11,322

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Note 5.  Investment in Unconsolidated Entities

The following table summarizes our equity in net loss of unconsolidated entities for the three and nine months ended September  30, 2014 and 2013, respectively.

		Three Months ended September 30,				Nine Months Ended September 30,
		2014		2013		2014		2013
(All Amounts in Thousands)
Oslo Bulk, AS	$	(55)	$	(193)	$	(142)	$	(290)
Oslo Bulk Holding Pte, Ltd		(318)		(122)		(400)		(363)
Terminales Transgolfo,  S . A .  D E  C . V .		(81)		(45)		(148)		(52)
Brattholmen Shipping, Ltd		30		-		30		-
Saltholmen Shipping, Ltd		248		-		296		-
Total Equity in Net Loss of Unconsolidated Entities	$	(176)	$	(360)	$	(364)	$	(705)

These investments have been accounted for under the equity method and our portion of their earnings or losses is presented net of any applicable taxes on our condensed consolidated statements of income (loss) under the caption: "Equity in Net Loss of Unconsolidated Entities (Net of Applicable Taxes).”

During 2014, we invested approximately $5.9 million cash and $2.0 million cash to acquire a 30% interest in Saltholmen Shipping Ltd and Brattholmen Shipping Ltd, respectively.  Brattholmen Shipping Ltd was organized to purchase and operate two Asphalt Tankers.  Saltholmen Shipping Ltd  was organized to purchase and operate two newbuildingChemicalTankers.  All four vessels were immediately employed on long-term bareboat charters. 

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Note 6.  Goodwill, Other Intangible Assets, and Deferred Charges

Amortization expense for intangible assets was approximately $1.0 million and $1.5 million for the three months ended September 30, 2014 and 2013, respectively.  Amortization expense for deferred charges was approximately $5.7 million and $3.3 million for the three months ended September 30, 2014 and 2013, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred chargesfor the three months endedSeptember 30, 2014:

(All Amounts in Thousands)
	Amortization Period	Balance at      June 30, 2014		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	58	$	-	$	-	$	-	$	58
Trade names - UOS	96 months		1,449		-		(57)		-		1,392
Customer Relationships - FSI	240 months		386		-		(6)		-		380
Customer Relationships - UOS	96 months		24,805		-		(966)		-		23,839
Total Definite Life Intangibles		$	26,698	$	-	$	(1,029)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	22,284	$	2,940	$	(5,154)	$	2,520	$	22,590
Financing Charges and Other	various		2,991		619		(563)		347		3,394
Total Deferred Charges		$	25,275	$	3,559	$	(5,717)	$	2,867	$	25,984

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Amortization expense for intangible assets was approximately $3.1 million and $4.6 million for the nine months ended September 30, 2014 and 2013, respectively.  Amortization expense for deferred charges was approximately $14.6 million and $7.5 million for the nine months ended September 30, 2014 and 2013, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred charges for the nine months ended September 30, 2014:

(All Amounts in Thousands)
	Amortization Period	Balance at December 31, 2013		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	60	$	-	$	(2)	$	-	$	58
Trade names - UOS	96 months		1,561		-		(169)		-		1,392
Customer Relationships - FSI	240 months		396		-		(16)		-		380
Customer Relationships - UOS	96 months		26,739		-		(2,900)		-		23,839
Total Definite Life Intangibles		$	28,756	$	-	$	(3,087)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	26,428	$	7,038	$	(13,745)	$	2,869	$	22,590
Financing Charges and Other	various		2,881		1,034		(868)		347		3,394
Total Deferred Charges		$	29,309	$	8,072	$	(14,613)	$	3,216	$	25,984

Note 7.  Income Taxes

We recorded a tax provision of $912,000 on our $5.2 million of loss before taxes and equity in net loss of unconsolidated entities for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, we recorded an income tax provisionof$68,000 on our $2.1 million of income before taxes and equity in net loss of unconsolidated entities. In general, the company’s interim tax provision for the nine months ended September 30, 2014, is determined by applying an estimated annual effective tax rate to the year to date earnings subject to U.S. income taxes, which are primarily our U.S. flag Jones Act results from operations.  Included in both our 2014 and 2013 tax provisions are taxes on our qualifying U.S. flag operations, which continue to be taxed under a “tonnage tax” regime rather than under the normal U.S. corporate income tax regime.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2013, including “Note J - Income Taxes” to the consolidated financial statements included therein.

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Note 8.  Commitments and Contingencies

Commitments

Leases

On August 26, 2014, we reacquired a US flagged PCTC that we had previously been operating under a sale-leaseback arrangement.  The vessel purchase was financed through conventional bank financing.  For more information, see Note 21 – Early Lease Buy Out.  For more information about our leases, please see our Annual Report on Form 10-K for the year ended December 31, 2013.

Investment in newbuildingHandysize Dry Bulk Carrier

During the third quarter of 2014, we were notified of the bankruptcy of a ship builder that had agreed to build a new Handysize Dry Bulk Carrierfor an entity in which we are an investor.  In accordance with the terms of the shipbuilding contract, the contract was terminated and all deposits to date are to be refunded by the guarantor bank within thirty days of notice.  As of September 30, 2014, we reclassified our $3.8 million deposittowards the purchase price of this vesselplus interest of $300,000 from construction in progress to a currentreceivable.We believe the $4.1 million to be collectible within twelve months of September 30, 2014.

Letters of Credit

As of September 30, 2014, we have approximately $9.0 million in outstanding letters of credit, $8.0 million of which were issued under our revolving credit facility.

Contingencies

On June26, 2014, U.S. Customs and Border Protection (CBP) issued pre-penalty notifications to us and two of our affiliates alleging failure to properly report the importation of spare parts incorporated intoour vessels covering the period April 2008 through September 2012.  CBP’s proposed duty is approximately $2.1 million along with a proposed penalty on the assessment of approximately $8.4 million.  The basis of CBP’s assessment is that the U. S. Government experienced a loss of revenue consisting of the difference between the government’s ad valorem duty and the consumption entry duty actually paid by us.  On September 24, 2014, we submitted our formal response to CBP’s claim and denied violating the applicable U.S. statute or regulations.We have not accrued a liability for this matter because the case is ongoing and we do not consider it probable that we will incur a loss.

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Note 9.  Employee Benefit Plans

The following table provides the components of net periodic benefit cost for our pension plan and postretirement benefits plan for the three months ended September 30, 2014 and 2013:

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Three Months Ended September 30,				Three Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	155	$	124	$	4	$	6
Interest cost		381		330		144		119
Expected return on plan assets		(571)		(560)		-		-
Amortization of prior service cost		(1)		(1)		25		25
Amortization of Net Loss		32		220		44		63
Net periodic benefit cost (benefit)	$	(4)	$	113	$	217	$	213

The following table provides the components of net periodic benefit cost for our pension plan and postretirement benefits plan for the nine months ended September 30, 2014 and 2013:

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Nine Months Ended September 30,				Nine Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	464	$	504	$	11	$	18
Interest cost		1,143		1,002		433		357
Expected return on plan assets		(1,797)		(1,674)		-		-
Amortization of prior service cost		(2)		(3)		75		75
Amortization of Net Loss		96		666		131		189
Net periodic benefit cost (benefit)	$	(96)	$	495	$	650	$	639

We contributed $450,000 to our pension plan during the nine months ended September 30, 2014. We contributed another $150,000 in October 2014, which we expect to be the final payment for 2014.

Note 10.  Derivative Instruments

We use derivative instruments from time to time to manage certain foreign currency and interest rate risk exposures. We do not use derivative instruments for speculative trading purposes.  All derivative instruments are recorded on the balance sheet at fair value.  For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is recorded through other comprehensive income and reclassified to earnings when the derivative instrument is settled.  Any ineffective portion of changes in the fair value of the derivative is reported in earnings.  None of our derivative contracts contain credit-risk related contingent features that would require us to settle the contract upon the occurrence of such contingency.  However, all of our contracts contain clauses specifying events of default under specified circumstances, including failure to pay, breach of agreement, default under the specific agreement to which the hedge relates, bankruptcy, misrepresentation and the occurrence of certain transactions.  The remedy for default is settlement in entirety or payment of the fair value of the contracts, which was $5.4 million in the aggregate for all of our contracts as of September 30, 2014.  The unrealized loss related to our derivative instruments included in accumulated other comprehensive loss, net of taxes, was $3.9 million and $4.3 million as ofSeptember 30, 2014 and December 31, 2013, respectively.  

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The notional and fair value amounts of our derivative instruments as ofSeptember 30, 2014 were as follows:

			Asset Derivatives			Liability Derivatives
			2014			2014
		Current Notional	Balance Sheet		Fair Value	Balance Sheet		Fair Value
(All Amounts in Thousands)		Amount	Location			Location
Interest Rate Swaps - L/T*	$	42,000		$	-	Other Liabilities	$	(5,262)
Foreign Exchange Contracts		31,231	Other Current Assets		7	Current Liabilities	$	(115)
Total Derivatives designated as hedging instruments	$	73,231		$	7		$	($5,377)

*We have outstanding a variable-to-fixed interest rate swap with respect to a Yen-based facility for the financing of a PCTC delivered in March 2010.   The notional amount under this contract is $42.0 million (based on a Yen to USD exchange rate of 109.65 as of September 30, 2014).  With the bank exercising its option to reduce the underlying Yen loan from 80% to 65% funding of the vessel’s delivery cost, the 15% reduction represents the ineffective portion of this swap, which consists of the portion of the derivative instrument that is no longer supported by underlying borrowings.  The change in fair value related to the ineffective portion of this swap is reflected in our statement of income (loss) for the third quarter of 2014 as an$89,000gain. The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap associated with our 25% investment in Oslo Bulk AS.

The effect of derivative instruments designated as cash flow hedges on our condensed consolidated statement of income (loss) for the ninemonths ended September 30, 2014 were as follows:

		Gain(Loss) Recognized in OCI*	Location of Gain(Loss) Reclassified from AOCL** to Income		Amount of Gain(Loss) Reclassified from AOCL to Income		Gain/(Loss) Recognized in Income from Ineffective portion
(All Amounts in Thousands)		2014			2014		2014
Interest Rate Swaps	$	446	Interest Expense	$	1,048	$	57
Foreign Exchange Contracts		(24)	Other Revenues		116		-
Total	$	422		$	1,164	$	57
* Other Comprehensive (Loss) Income
**Accumulated Other Comprehensive Loss

Interest Rate Swap Agreements

From time to time, we enter into interest rate swap agreements to manage well-defined interest rate risks. We record the fair value of the interest rate swap as an asset or liability on the balance sheet. Currently, our interest rate swap is accounted for as an effective cash flow hedge with the exception of a small portion of one contract.  Accordingly, the effective portion of the change in fair value of the swap is recorded in Other Comprehensive Income (Loss).

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As of September 30, 2014, we had the following interest rate swap contract outstanding:

(All Amounts in Thousands)
Effective	Termination		Current
Date	Date		Notional Amount*	Swap Rate		Type
3/15/2009	9/15/2020	$	42,000	2.065	%	Variable-to-Fixed

*Notional amount converted from Yen at September 30, 2014 at a Yen to USD exchange rate of 109.65.

Foreign Currency Contracts 

From time to time, weenter into foreign exchange contracts to hedge certain firm foreign currency purchase commitments.  During 2013, we entered into two forward purchase contracts for Mexican Pesos, which expire in December 2014.  The first was for Mexican Pesos of$1.2 million U.S. Dollar equivalents at an exchange rate of 13.6103 and the second was for Mexican Pesos of$600,000 U.S. Dollar equivalents at an exchange rate of 13.3003.  In September 2014, we entered into a new forward purchase contract for Mexican Pesos, which expire in December 2015, for $900,000 U.S. Dollar equivalents at an exchange rate of 13.6007.  Our Mexican Peso foreign exchange contracts cover 25% of our projected Peso exposure. 

In December 2013, we entered into three forward foreign exchange contracts totaling approximately 3.3 billion Yen in order to limit our exposure to currency fluctuations and to provide us with the option to fully payoff our current Yen Facility at an approximate exchange rate of 102.53 to $1.00.  One of these contracts was exercised in March 2014 and one was exercised in June 2014.  The remaining July contract for 3.1 billion Yen was rolled forward under four contracts, one which expired in September 2014, two which coincide to the next two scheduled quarterly loan installments onDecember 2014 and March 2015 of approximately 85 million Yen each,and the remaining 2.885 billion Yen mature in April 2015.  These remaining contracts allow us to limit our exposure to currency fluctuations. These remaining contracts and related agreements with the current lender give us the option to convert the Yen Facility into a USD-based Facility with the current lender at this fixed exchange rate, but otherwise on the same terms and with the same collateral.  As of the date of this report, we have not yet decided if or when to exercise this loan conversion option.  These particular forward foreign exchange contracts do not qualify for hedge accounting treatment and are thus accounted for as economic hedges.

The following table summarizes the current notional values as of September 30, 2014, of these contracts: 

(All Amounts in Thousands)
Transaction Date	Type of Currency		Amount Available in Dollars	Effective Date	Expiration Date
Aug-13	Peso	$	300	Jan-14	Dec-14
Nov-13	Peso		150	Jan-14	Dec-14
May-14	Yen		831	May-14	Dec-14
May-14	Yen		831	May-14	Mar-15
May-14	Yen		28,219	Jan-15	Dec-15
Sep-14	Peso		900	Jan-15	Dec-15
		$	31,231

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Note 11. Long-Term Debt  

During the quarter ended September 30, 2014, we entered into a new loan agreement for the purchase of our 2007 PCTC that we had previously been operating under a sale-leaseback arrangement.  Under this new loan agreement, we borrowed$38.5 million at a fixed rate of 4.35% with 24 quarterly payments with a final quarterly balloon payment of $20.7 million due on August 28, 2020.  We incurred deferred loan costs in the amount of approximately $519,000 on the new loan.  The new loan agreement requires us to pre-fund a portion of the upcoming quarterly scheduled debt payment currently constituting$387,000, which amount is classified as restricted cash on the balance sheet.  See Note 21 – Early Lease Buy Back for more information on this transaction.  During the quarter ended September 30, 2014, we also refinanced one of our 1999 PCTCs by paying off all $11.4 million of our bank debt owed to DnB ASAand borrowing $23.0 million under a new loan agreement with RBS Asset Finance.  Under this new RBS loan agreement, we are obligated to pay variable interest at a 30 day Libor rate plus 2.75%and principal amortized over84 monthly payments plus a final payment in August 2021.  The new loan costs and the old unamortized loan costs of approximately $230,000 and $225,000, respectively, were expensed as losses on the debt extinguishment.

On September 24, 2013, we entered into a new senior secured Credit Facility. The Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a revolving credit facility (“LOC”) in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.  The Credit Facility has four lenders, each with commitments ranging from $15 million to $30 million. The facility carries an accordion feature, whereby an additional term loan up to $50 million may be advanced at the sole discretion of the lenders subject to certain financial requirements.

In conjunction with entering into the new Credit Facility, we used the Credit Facility to refinance and retire all indebtedness outstanding under our previously-existing revolving credit facility originally scheduled to expire in September 2014 and our five-year variable rate financing agreement we entered into on November 30, 2012.  As a result, both the old revolving credit facility and the old five-year variable rate facilities were terminated concurrently with the establishment of the new Credit Facility. The total amount paid off was approximately $46.6 million, with $21.0 million of this amount drawn from the new LOC.  We categorized this refinancing as a debt extinguishment. The total fees associated with this facility included $1.4 million of bank fees and $148,000 of third party fees. All bank fees associated with the term loan facility were expensed during the third quarter of 2013, while all the fees associated with new LOC facility are being amortized over the term of the Credit Facility.

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As of the dates indicated below, long-term debt consisted of the following:

		Interest Rate					Total Principal Due
(All Amount in Thousands)		September 30,		December 31,		Maturity	September 30,		December 31,
Description of Secured Debt		2014		2013		Date	2014		2013
Notes Payable – Variable Rate	(1)	2.7331	%	2.7451	%	2018	$	12,884	$	15,460
Notes Payable – Variable Rate		2.7346-2.7381	%	2.7400	%	2018		42,320		45,081
Notes Payable – Variable Rate		2.5040	%	2.5188	%	2017		9,704		11,383
Notes Payable – Variable Rate	(5)	2.9015	%	2.9181	%	2021		22,766		12,780
Notes Payable – Variable Rate	(1)	2.7326	%	2.7384	%	2018		15,708		16,651
Notes Payable – Variable Rate	(2)	3.6179	%	2.8964	%	2020		27,866		31,437
Notes Payable – Variable Rate	(3)	3.9900	%	3.7500	%	2018		42,750		44,437
Notes Payable – Fixed Rate	(4)	4.3500	%	N/A		2020		38,500		-
Note Payable - Mortgage	(6)							5		-
Line of Credit	(3)	3.9100	%	3.6700	%	2018		41,000		21,000
								253,503		198,229
		Less Current Maturities						(23,347)		(19,213)
							$	230,156	$	179,016

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Capesize vessel and a Supramax Bulk Carrier newbuilding, both of which we acquired a 100% interest in as a result of our acquisition of Dry Bulk.  Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.1 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, we drew $6.1 million in November 2011 and $12.7 million in January 2012.

2. We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 5.565%. The swap agreement is for the same term as the associated note payable.

3. As described in greater detail above, our senior secured Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a LOC in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans. 

4. We entered into a fixed rate financing agreement with DVB Bank SE, on August 26, 2014 in the amount of $38.5 million, collateralized by our 2007 PCTC at a rate of 4.35% with 24 quarterly payments with a final balloon payment of $20.7 million in August 2020.

5. During August 2014, we paid off our $11.4 million loan with DnB ASA and obtained a new loan with RBS Asset Finance in the amount of $23.0 million collateralized by one of our 1999 PCTCs at a variable rate of 30 day Libor rate plus 2.75% payable in 84 monthly installments with the final payment due August 2021.

6. Represents consideration given in connection with the proposed construction financing relating to the building we plan to renovate as our new New Orleans headquarters building.

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All of our principal credit agreements and operating leases require us to comply with various loan covenants, including financial covenants that require minimum levels of net worth, working capital, liquidity, and interest expense or fixed charges coverage and a maximum amount of debt leverage.  During first quarter of 2014, there was concern that we would be unable to meet all of our required debt covenants for the quarter.  During the period endingMarch 31, 2014, our principal senior secured lenders and two of our lessors agreed to, among other things, defer the date upon which we were required to attain a more stringent leverage ratio and increased liquidity from December 31, 2013 to June 30, 2014.  Under these terms, we are required to maintain a consolidated leverage ratio of 4.50 to 1.0 through the fiscal quarter ending June 30, 2014, and 4.25 to 1.0 thereafter, and liquidity of not less than $15 million through June 30, 2014 and $20 million thereafter. 

EffectiveSeptember 30, 2014,  certain of our lenders and lessors agreed at our request to adjust our covenants to less stringent levels to provide relief from the accounting impact of our above-described August 2014 vessel purchase and refinancing transactions (which, as noted in Note 21, required us to reduce our cost basis in the purchased vessel).Two of our lenders have elected to adjust our definition of EBITDA to disregard the impact of these transactions, while the remainder of our lenders and lessors agreed to amend the consolidated leverage and fixed charge coverage ratios as follows: we are required to maintain a consolidated leverage ratio of 5.00 to 1.0 through the fiscal quarter ending December 31, 2015,  then 4.75 to 1.0 through the fiscal quarter ending March 31, 2016, then 4.50 to 1.0 beginning the quarter ending June 30, 2016 through the quarter ending September 30, 2016, and 4.25 to 1.0 thereafter and the minimum fixed charge coverage ratio we are required to maintain is 1.10 to 1.0 beginning with the quarter ending September 30, 2014 through the quarter ending December 31, 2014, 1.15 to 1.0 beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015, 1/20 to 1.0 beginning with the quarter ending March 31, 2016 through the quarter ending June 30, 2016, and 1.25 to 1.0 thereafter (in each case as calculated under our amended debt agreements).  Consequently, as of September 30, 2014, we were in compliance with all of our debt covenants.

Based on current conditions and our expectations that our performance will stabilize or improve marginally in the near term, we currently believe that we will be able to attain all of our financial covenants through the end of 2014, but we cannot assure you of this.

In addition to the restrictions under our new Credit Facility, certain of our loan agreements restrict the ability of our subsidiaries to dispose of collateralized assets or any other asset which is substantial in relation to our assets taken as a whole without the approval from the lender.  We believe that we have consistently remained in compliance with this provision of these loan agreements.

Note 12. Other Long Term Liabilities

Other Long Term Liabilities for the period ending September 30, 2014 and December 31, 2013 were $47.0 million and $65.3 million, respectively.

		September 30,		December 31,
(All Amounts in Thousands)		2014		2013
Deferred Gains, net of Amortization	$	18,853	$	34,009
Pension and Post Retirement		9,851		10,339
Alabama Lease Incentive		6,026		6,887
Insurance Reserves		4,591		5,521
Derivatives		5,262		4,412
Other		2,463		4,138
	$	47,046	$	65,306

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Note 13.  Stock Based Compensation

We grant stock-based compensation in the form of (1) unrestricted stock awards to our outside directors and (2) restricted stock units (“RSUs”) to key executive personnel.  These awards are granted under the International Shipholding Corporation 2011 Stock Incentive Plan (the “Plan”), which was approved by our stockholders in 2011.

Unrestricted Stock Awards

On January 15, 2013, we granted our outsidedirectors an aggregate of 6,708 unrestricted shares of common stock from the Plan.  On January 14, 2014, we granted our outsidedirectors an aggregate of 4,470 unrestricted shares of common stock from the Plan.  For the nine months ended September 30, 2014 and 2013, our net income reflected approximately $90,000 of stock-based compensation expense charges related to these issuances, which had no effect on either basic or diluted earnings per share.

A summary of the activity for stock awards during the nine months ended September 30, 2014, is as follows:

	2014
	Shares		Weighted Average Fair Value Per Share
Non-vested - December 31, 2013	-		-
Unrestricted Shares Granted	4,470	$	26.80
Shares Vested	(4,470)	$	26.80
Non-vested - September 30, 2014	-		-

Restricted Stock Units

General Terms

We grant restricted stock units to key executive personnel under the Plan.  Each year, we have granted awards that vest based on continued service (“Time-Based RSUs”) as well as awards that vest based on a combination of performance metrics and continued service (“Performance-Based RSUs”).  Subject to certain exceptions, our Time-Based RSUs generally vest one-third per year over a three-year period.  Each of our Performance-Based RSUs represents the right to receive a maximum of one-and-a-half shares of common stock, depending upon performance.  We grant two types of Performance-Based RSUs – one for which vesting is contingent upon an absolute metric, our earnings per share (our “Absolute Performance-Based RSUs”), and another for which vesting is contingent upon our performance as measured against a relative metric, our relative total shareholder return (our “Relative Performance-Based RSUs”).

For our top four executives, their Absolute Performance-Based RSUs vest and pay out in the year following the grant.  For each other recipient, the Absolute Performance-Based RSUs vest and pay out one-third per year over the three years following grant, based on the achievement of the metric in the first year.  With respect to the Relative Performance-Based RSUs, vesting is contingent upon our total stockholder return for a given period as compared to the companies comprising the Russell 2000 index for the same period.  For our top four executives, the performance of their Relative Performance-Based RSUs is measured over a one-year period (the calendar year of the grant), while for each other recipient the performance of their Relative Performance-Based RSUs is measured

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at the end of the third year (through December 31 of the third year following the grant).  For all RSUs, vesting is contingent upon continued employment with the Company except in certain limited circumstances.

For the three months ended September 30, 2014 and 2013, our net income reflected $322,000 and $272,000, respectively, of RSU stock-based compensation expense charges.  For the nine months ended September 30, 2014 and 2013, our net income reflected $1.1 million and $933,000, respectively, of RSU stock-based compensation expense charges.

2012 Grants

In 2012, we achieved maximum performance on our Absolute Performance-Based RSUs, and 21,564 shares of common stock vested and were paid out in 2013.  In May 2014, an additional 1,500 shares vested and were paid out. The remaining 1,500 RSUs will vest and pay out in May 2015.  With respect to our Relative Performance-Based RSUs, for our top four executives, whose awards were measured over a one-year performance period, our relative rank was in the 27th percentile, and therefore those awards paid out at 53% of grant (21,564 shares of common stock) in 2013.  Vesting of the remainder of Relative Performance-Based RSUs granted in 2012 is based on our relative TSR rank over a three-year measurement period, and therefore those 1,500 RSUs will vest and be paid out in 2015 based on our relative performance as determined following the end of the performance period (December 31, 2014).

2013 Grants

In 2013, we achieved maximum performance on our Absolute Performance-Based RSUs, and 8,450 shares of common stock vested and paid out on May 7, 2014.  The remaining 3,525 RSUs will vest and pay out ratably in May 2015 and 2016.  With respect to our Relative Performance-Based RSUs, for our top four executives, whose awards were measured over a one-year performance period, our relative rank was in the 79th percentile, and therefore those awards paid out at 150% of grant (20,064 shares of common stock) on May 7, 2014.  The remainder of Relative Performance-Based RSUs granted in 2013 will vest based on our relative TSR rank over a three-year measurement period, and therefore those 3,525 RSUs will be vest and be paid out in 2016 based on our relative performance as determined following the end of the performance period (December 31, 2015). 

2014 Grants

On January 28, 2014, we granted 7,950 Time-Based RSUs, 17,351 Absolute Performance-Based RSUs, and 17,349 Relative Performance-Based RSUs.

Fair Values

The fair value of the Time-Based RSUs was calculated based on the closing market price of our stock as of the grant date times the number of RSUs issued with no forfeitures assumed. For our 2014, 2013, and 2012 awards, we used the closing market price of our stock on January 28, 2014, April 23, 2013, and May 7, 2012 which was $25.95,  $17.66, and $19.35 per share, respectively. The Performance-Based RSUs are subject to vesting upon two different performance metrics: an Absolute Performance-Based metric based on targeted earnings per share and a Relative Performance-Based metric based on our total stockholder return over a given period as measured against that of the other companies in the Russell 2000 index.  In order to calculate the fair value of our Absolute Performance-Based RSUs, we multiplied the closing market price of our stock as of the grant date times the number of RSU’s issued with no forfeitures assumed. We measured our RelativePerformance-Based RSUs based on market conditions on the grant date. In order to derive the fair value of these awards, we used a Monte-Carlo simulation statistical technique to simulate our future stock

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prices and the components of the Russell 2000 Index. The stock prices were based upon the risk-free rate of return, the volatility of each entity, and the correlation of each entity with the Russell 2000 Index. We multiplied our ending simulated stock price by the payout percentage to determine a projected payout at the end of the performance period. The ending payout was then discounted, using the risk-free rate of return, to the grant date to determine the grant date fair value. Since 2014, 2013, and 2012 all provide for one year vesting (for the top four named executive officers) and three year vesting (for all other award recipients), a fair value was calculated separately for the one and three year awards for each year.

The following assumptions were used:

	2014 Awards						2013 Awards						2012 Awards
	1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest
Stock Price	$	25.95		$	25.95		$	17.66		$	17.66		$	19.35		$	19.35
Expected Volatilities		44.30	%		40.02	%		33.50	%		37.03	%		44.31	%		40.50	%
Correlation Coefficients		0.374			0.554			0.473			0.625			0.719			0.694
Risk Free Rate		0.10	%		0.72	%		0.10	%		0.31	%		0.16	%		0.34	%
Dividend Yield		3.85	%		3.85	%		5.70	%		5.70	%		5.17	%		5.17	%
Simulated Fair Value	$	23.03		$	25.46		$	15.33		$	16.57		$	17.73		$	18.88
Fair Value as a % of Grant		88.74	%		98.10	%		86.81	%		93.83	%		91.63	%		97.57	%

Our operating results, net income (loss) and net income (loss) before taxes for the periods set forth below include (i) the following amounts of compensation expense associated with the stock grants and RSUs and (ii) the related reductions in earnings per share: 

	Three Months ended September 30,				Nine Months ended September 30,
	2014		2013		2014		2013
Stock-Based Compensation
Expense:
Stock Grants to Outside Directors	$	30,000	$	30,000	$	90,000	$	90,000
RSUs Awards to Officers	$	322,000	$	272,000	$	1,093,000	$	933,000
Related Reduction in
Earnings Per Share 1	$	(0.03)	$	(0.03)	$	(0.11)	$	(0.09)
1  Same for basic and diluted earnings per share

In all cases, vesting is contingent upon continued employment with the company. A summary of the activity for the restricted stock awards during the nine months ended September 30, 2014, is as follows:

	Number of RSU's		Weighted Average Grant Date Fair Value
Non-vested - December 31, 2013	131,100	$	18.77
Additional Awards Granted	15,138		16.63
Awards Granted	42,650		24.99
Awards Exercised	(48,849)		24.97
Awards Cancelled	(25,639)		24.97
Non-vested - September 30, 2014	114,400	$	22.07

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Note 14.  Stockholders’ Equity

A summary of the changes in Stockholders’ equity for the nine months ended September 30, 2014, is as follows:

		Stockholders'
(All Amounts in Thousands)		Equity
Balance December 31, 2013	$	336,540
Net Loss		(6,446)
Common Stock Dividends*		(5,569)
Preferred Stock Dividends		(3,916)
Unrealized Foreign Currency Translation Gain		(67)
Net Change in Fair Value of Derivatives		422
Net Change in Funding Status of Defined Benefit Plan		225
Issuance of stock-based compensation		544
Balance September 30, 2014	$	321,733
*Includes $105,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Stock Repurchase Program

On January 25, 2008, ourBoard of Directors approved a share repurchase program for up to a total of 1,000,000 shares of our common stock. We expect that any share repurchases under this program will be made from time to time for cash in open market transactions at prevailing market prices. The timing and amount of any purchases under the program will be determined by management based upon market conditions and other factors. In 2008, we repurchased 491,572 shares of our common stock for $11.5 million.Thereafter, we suspended repurchases until the second quarter of 2010, when we repurchased 223,051 shares of our common stock for $5.2 million.Unless and until ourBoard of Directors otherwise provides, this authorization will remain open indefinitely, or until we reach the approved 1,000,000 share limit.

This table provides certain information with respect to our purchase of shares of its common stock during the three months ended September 30, 2014:

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plan	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plan
July 1, 2014 - July 31, 2014	-	-	-	285,377
August 1, 2014 - August 31, 2014	-	-	-	285,377
September 1, 2014 - September 30, 2014	-	-	-	285,377

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Dividend Payments

During the nine months ended September 30, 2014, we paid cash dividends in respect to our common stock as follows:

(All Amounts in Thousands Except per Share Data )					Total
			Per Share		Dividend
Record Date	Payment Date		Amount		Paid
17-Feb-14	3-Mar-14	$	0.250	$	1,813
16-May-14	3-Jun-14	$	0.250		1,826
15-Aug-14	4-Sep-14	$	0.250		1,825
				$	5,464

During the nine months ended September 30, 2014, we paid cash dividends in respect of our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data )						Total
				Per Share		Dividend
Record Date	Series	Payment Date		Amount		Paid
29-Jan-14	A	30-Jan-14	$	2.375	$	594
29-Jan-14	B	30-Jan-14	$	2.250		712
29-Apr-14	A	30-Apr-14	$	2.375		594
29-Apr-14	B	30-Apr-14	$	2.250		711
29-Jul-14	A	30-Jul-14	$	2.375		594
29-Jul-14	B	30-Jul-14	$	2.250		711
					$	3,916

Note 15. Preferred Stock

Series A Issuance

On February 21, 2013, we sold 250,000 shares of our 9.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $1.00 par value per share, with a liquidation preference of $100.00 per share. 

Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the Series A Preferred Stock are payable at a rate of 9.50% per annum per $100.00 liquidation preference per share, starting from the date of original issue, February 21, 2013.  Dividends accumulate quarterly in arrears on each January 30, April 30, July 30 and October 30.  However, the dividends are payable only if declared by our Board of Directors and must come from funds legally available for dividend payments.  On January 7, 2014, the Board of Directors declared a dividend of $2.375 per share on our Series A Preferred Stock for the preferred stockholders of record as of January 29, 2014, which was paid on January 30, 2014.  On April 9, 2014, the Board of Directors declared a dividend of $2.375 per share on our Series A Preferred Stock for the preferred stockholders of record as of April 29, 2014, which was paid on April 30, 2014.  On July 7, 2014, the Board of Directors declared a dividend of $2.375per share on our 9.5% Series A Cumulative Perpetual Preferred Stock to preferred stockholders of record on July 29, 2014, which was paid on July 30, 2014.  On October 6, 2014, the Board of Directors declared a dividend of $2.375per share on our 9.5% Series A Cumulative Perpetual Preferred

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Stock to preferred stockholders of record on October 29, 2014,payable on October 30, 2014.As of September 30, 2014, we had no accumulated unpaid dividends for our Series A preferred stock.

Commencing on April 30, 2018, we may redeem, at our option, the Series A Preferred Shares, in whole or in part, at a cash redemption price of $100.00 per share, plus any accrued and unpaid dividends to, but not including, the redemption date.  If at any time a “Change of Control” occurs, we will have the option to redeem the Series A Preferred Shares, in whole, within 120 days after the date of the Change of Control at the same cash redemption price.  The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or other mandatory redemption, and are not convertible into or exchangeable for any of our other securities.

Holders of the Series A Preferred Shares generally have no voting rights except for limited voting rights if dividends payable on the outstanding Series A Preferred Shares are in arrears for nine or more consecutive or non-consecutive quarters, and under certain other limited circumstances.

Net proceeds from the issuance of the Series A Preferred Shares were approximately $23.4 million, net of underwriter discounts and related costs totaling approximately $1.6 million.

Series B Issuance

On August 1, 2013, we sold 316,250 shares of our 9.00% Series B Cumulative Redeemable Perpetual Preferred Stock, $1.00 par value per share, with a liquidation preference of $100.00 per share, including 41,250 shares sold pursuant to an over-allotment option granted to the underwriters for the offering.

Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the Series B Preferred Stock are payable at a rate of 9.00% per annum per $100.00 liquidation preference per share, starting from the date of original issue, August 1, 2013. Dividends accumulate quarterly in arrears on each January 30, April 30, July 30 and October 30. However, the dividends are payable only if declared by our Board of Directors and must come from funds legally available for dividend payments.  On January 7, 2014, the Board of Directors declared a dividend of $2.25 per share on our Series B Preferred Stock for the preferred stockholders of record as of January 29, 2014, which was paid on January 30, 2014.  On April 9, 2014, the Board of Directors declared a dividend of $2.25 per share on our Series B Preferred Stock for the preferred stockholders of record as of April 29, 2014, which was paid on April 30, 2014.   On July 7, 2014, the Board of Directors declared a dividend of $2.25 per share 9.0% Series B Cumulative Perpetual Preferred Stock to preferred stockholders of record on July 29, 2014, which was paid on July 30, 2014.  On October 6, 2014, the Board of Directors declared a dividend of $2.25 per share 9.0% Series B Cumulative Perpetual Preferred Stock to preferred stockholders of record on October 29, 2014,payable on October 30, 2014.As of September 30, 2014, we had no accumulated unpaid dividends for our Series B preferred stock.

Commencing on October 30, 2018, we may redeem, at our option, the Series B Preferred Shares, in whole or in part, at a cash redemption price of $100.00 per share, plus any accrued and unpaid dividends to, but not including, the redemption date.  If at any time a “Change of Control” occurs, we will have the option to redeem the Series B Preferred Shares, in whole, within 120 days after the date of the Change of Control at the same cash redemption price.  The Series B Preferred Shares have no stated maturity, are not subject to any sinking fund or other mandatory redemption, and are not convertible into or exchangeable for any of our other securities.

Holders of the Series B Preferred Shares generally have no voting rights except for limited voting rights if dividends payable on the outstanding Series B Preferred Shares are in arrears for nine or more consecutive or non-consecutive quarters, and under certain other limited circumstances.

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Net proceeds from the issuance of the Series B Preferred Shares were approximately $30.0 million, net of underwriter discounts and related costs totaling approximately $1.6 million.

Note 16.  Changes in Accumulated Other Comprehensive Loss

Changes in Accumulated Other Comprehensive Loss by Component

For the three months ending September 30, 2014

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance July 1, 2014		$	(4,314)	$	(397)	$	(9,066)	$	(13,777)
	Other comprehensive income (loss)
	before reclassification		850		(84)		-		766
	Amount reclassified from accumulated
	other comprehensive income (loss)		(393)		-		74		(319)
Net current-period other
comprehensive income (loss)			457		(84)		74		447
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the three months ending September 30, 2014

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(426)	Interest expense
	Foreign exchange contracts		33	Other revenues
			(393)	Total before tax
			-	Tax (expense) or benefit
			(393)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		24	A&G Expense
	Actuarial losses		76	A&G Expense
			100	Total before tax
			(26)	Tax (expense) or benefit
			74	Net of tax
Total reclassifications for the period		$	(319)	Net of tax

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Changes in Accumulated Other Comprehensive Loss by Component

For the three months ending September 30, 2013

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance June 30, 2013		$	(5,844)	$	(104)	$	(16,623)	$	(22,571)
	Other comprehensive income
	before reclassification		3,275		(307)		-		2,968
	Amount reclassified from accumulated
	other comprehensive income		(2,495)		-		306		(2,189)
Net current-period other
comprehensive income (loss)			780		(307)		306		779
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the three months ending September 30, 2013

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(2,444)	Interest expense
	Foreign exchange contracts		(51)	Other revenues
			(2,495)	Total before tax
			-	Tax (expense) or benefit
			(2,495)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		25	A&G Expense
	Actuarial losses		281	A&G Expense
			306	Total before tax
			-	Tax (expense) or benefit
			306	Net of tax
Total reclassifications for the period		$	(2,189)	Net of tax

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Changes in Accumulated Other Comprehensive Loss by Component

For the nine months ending September 30, 2014

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2014		$	(4,279)	$	(414)	$	(9,217)	$	(13,910)
	Other comprehensive income (loss)
	before reclassification		1,643		(67)		-		1,576
	Amount reclassified from accumulated
	other comprehensive income (loss)		(1,221)		-		225		(996)
Net current-period other
comprehensive income (loss)			422		(67)		225		580
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the nine months ending September 30, 2014

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,105)	Interest expense
	Foreign exchange contracts		(116)	Other revenues
			(1,221)	Total before tax
			-	Tax (expense) or benefit
			(1,221)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		73	A&G Expense
	Actuarial losses		227	A&G Expense
			300	Total before tax
			(75)	Tax (expense) or benefit
			225	Net of tax
Total reclassifications for the period		$	(996)	Net of tax

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Changes in Accumulated Other Comprehensive Loss by Component

For the nine months ending September 30, 2013

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2013		$	(7,352)	$	(350)	$	(17,244)	$	(24,946)
	Other comprehensive income
	before reclassification		4,070		(61)		-		4,009
	Amount reclassified from accumulated
	other comprehensive income		(1,782)		-		927		(855)
Net current-period other
comprehensive income (loss)			2,288		(61)		927		3,154
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the nine months ending September 30, 2013

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,796)	Interest expense
	Foreign exchange contracts		14	Other revenues
			(1,782)	Total before tax
			-	Tax (expense) or benefit
			(1,782)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		75	A&G Expense
	Actuarial losses		852	A&G Expense
			927	Total before tax
			-	Tax (expense) or benefit
			927	Net of tax
Total reclassifications for the period		$	(855)	Net of tax

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Note 17.  Earnings Per Share

We compute basic earnings per share based on the weighted average number of common shares outstanding during the relevant periods.  Diluted earnings per share also reflect dilutive potential common shares, including shares issuable under restricted stock units using the treasury stock method.  The calculation of basic and diluted earnings per share is as follows:

(All Amounts in Thousands Except per Share Data)

	Three Months Ended Sept 30,				Nine Months Ended Sept 30,
	2014		2013		2014		2013
Numerator
Net (Loss) Income	$	(2,565)	$	(2,222)	$	(6,446)	$	1,290
Preferred Stock Dividends		1,305		1,076		3,916		1,920
Net (Loss) Income Available to Common Stockholders	$	(3,870)	$	(3,298)	$	(10,362)	$	(630)
Denominator
Weighted Average Shares of Common Stock
Outstanding:
Basic		7,301,657		7,248,350		7,278,695		7,233,807
Plus:
Effect of dilutive restrictive stock		-		-		-		-
Diluted		7,301,657		7,248,350		7,278,695		7,233,807
Basic Earnings Per Common Share:
Net (Loss) Income per share - Basic	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)
Net (Loss) Income per share - Diluted:	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)

Note 18. Fair Value Measurements

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Under ASC 820, the price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, and (iii) able and willing to complete a transaction.

Fair value measurements require the use of valuation techniques that are consistent with one or more of the following: the market approach, the income approach or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. The fair value of our interest rate swap agreements is based upon the approximate amounts required to settle the contracts.  Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In that regard, ASC 820 establishes a fair

33

value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

§ Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

§ Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (including interest rates, volatilities, prepayment speeds, credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.

§ Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2014, segregated by the above-described levels of valuation inputs:

(All Amounts in Thousands)		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Assets	$	-	$	7	$	-	$	7
Derivative Liabilities	$	-	$	(5,377)	$	-	$	(5,377)

The carrying amounts of our accounts receivable, accounts payable and accrued liabilities approximated their fair value at September 30, 2014 and December 31, 2013. We estimated the fair value of our variable rate long-term debt at September 30, 2014, including current maturities, to equal approximately $254.7 million due to the variable rate nature of the debt as well as to the underlying value of the collateral.  We have determined that credit risk is not a material factor.

Note 19.  New Accounting Pronouncements

In May 2014, the Financial Accounting Standard Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers”, to amend Accounting Standards Codification Topic 605, “Revenue Recognition”.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for annual reporting periods beginning on or after December 15, 2016.  Early adoption is not permitted.  We are currently evaluating the impact of the adoption of this standard.

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation”, to give explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award.  ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015.  Earlier adoption is permitted.  The effective date is the same for both public business entities and all other entities.  We are currently evaluating the impact of the adoption of this standard.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern”, to give explicit guidance on managements’ requirement to analyze whether there areconditions or events, considered in the aggregate, that raise

34

substantial doubtabout the entity’s ability to continue as a going concern within one year after thedate that the financial statements are issued (or within one year after the datethat the financial statements are available to be issued when applicable).  ASU 2014-15 are effective for the annual period ending afterDecember 15, 2016, and for annual periods and interim periods thereafter. Earlyapplication is permitted.We are currently evaluating the impact of the adoption of this standard.

Note 20.  Prior Period Revision

In the first quarter of 2014, we elected to revise our prior year financial statements in accordance with Accounting Bulletin No. 108 (SAB 108) for three previously uncorrected misstatements which impacted the fourth quarter of 2013. The corrections are immaterial to our financial statements for the period ended December 31, 2013. Accordingly, we corrected the balance sheet impact of these errors by revising our previously issued financial statements in our first quarter 10-Q filing. The first revision related to the cutoff of voyage revenues which resulted in a decrease in revenue and a decrease in voyage expenses for a net adjustment to pre-tax income of $70,000. The second correction related to the classification of the short-term and long-term portions of a related party note receivable. This revision decreased our short term note receivable and increased our long term note receivable by $275,000. The third revision related to an increase in our long-term deferred tax assets and a decrease to our deferred income tax expense by $305,000. The total effect of the revisions on retained earnings was an increase of $375,000 for the year ended December 31, 2013. The income statement effect of these entries will be revised in our financial statements for the twelve month period ended December 31, 2013 when the 2013 income statement or related data derived therefrom is included in one of our subsequent filings under the federal security laws.  The financial statement line items impacted by these revisions by more than 1% are presented in the table below in thousands:

			2013
Financial Statement Line Item	Dollar Impact		As Previously Reported		% Impact		2013 As Revised
Provision (Benefit) for Income Taxes	$	(305)	$	(11,963)	2.54	%	$	(12,268)
Net Income	$	375	$	18,157	2.07	%	$	18,532
Comprehensive Income	$	375	$	29,163	1.2	%	$	29,538

The impact of these revisions on Revenue, Voyage Expense, Total Operating Expenses, Operating Income, Income Before Provision (Benefit) for Income Taxes and Equity in Net Loss of Unconsolidated Entities, Retained Earnings, Stockholders’ Equity, Current Assets, Non-Current Assets, Current Liabilities, and Non-Current Liabilities was less than 1% of each line item, respectively.

Note 21.  Early Lease Buy Out

On February 22, 2012, we completed a sale and leaseback arrangement with Wells Fargo Bank NW of our 2007 PCTC vessel.    We leased the vessel back under a ten year lease agreement with early buyout options that could be exercised in 2017 and 2019.  The lease was classified as an operating lease, with the $14.9 million gain on this sale-leaseback deferred and recognized over the term of the lease.  OnAugust 26, 2014, we determined that it was preferential under current market conditions to buy back this vessel with the intent to reflag this vessel to International flagin anticipation of deploying the vessel at a higher operating margin later in 2014.  We reached an agreement with the lessor to repurchase the vessel for $55.6 million and recorded the remaining unamortized deferred gain of $11.2 million as a reduction in the cost basis of the purchased asset. 

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Note 22.  Subsequent Events

On October 29, 2014, at the third quarter Board meeting, our management presented a strategic plan to our Directors that included a divestiture of selected under-performing assets.  Subject to a successful divestiture, we could generate approximately $18 - $20 million in net proceeds, after retiring debt collateralized by these assets of approximately $42 million.  We plan to invest these proceeds in existing opportunities that will provide satisfactory returns. If our Board of Directors approves this plan, we believe that all the criteria necessary to classify these assets as Held for Sale assets will have occurred at that time, and the assets will be recorded at fair value less the cost to sell. Based on the current fair value  estimates of these assets, we could potentially recognize an impairment loss in the range of $25-30 million, which would be recorded in the fourth quarter of 2014. As of September 30, 2014, we performed an analysis of the recoverability of the vessels under the Held for Use model using a weighted average probability approach that considered the various alternative sources of cash flows associated with these vessels, including the sale of these assets and their continued use should we not achieve our sales price estimates, or should our Board not approve such sale.  Our evaluation resulted in a conclusion that the carrying values of the vessels were recoverable under the Held for Use model as of September 30, 2014.Accordingly, no impairment was recorded during the three and nine months periods ended September 30, 2014.

On October 17, 2014, through one of our wholly owned subsidiaries, we entered into a Memorandum of Agreement for the sale of our single hulled Tanker vessel. If all conditions are met to this agreement, the transaction could be completed by the second week of November 2014. Under the current terms, the sales proceeds would be approximately $1.6 million and generate an impairment loss of approximately $3.1 million in the fourth quarter.  As of September 30, 2014, we performed an analysis of the recoverability on the Tanker under the Held for Use model using a weighted average probability approach that considered the various alternative sources of cash flows including the pending sale in order to recover the current carrying value of the Tanker. Our evaluation resulted in a conclusion that the carrying value of the Tanker was recoverable under the Held for Use model as of September 30, 2014. Accordingly, no impairment was recorded during the three and nine months periods ended September 30, 2014.

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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report and other documents filed or furnished by us under the federal securities laws include, and future oral or written statements or press releases by us and our management may include, forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and as such may involve known and unknown risks, uncertainties, and other factors that may cause our actual results to be materially different from the anticipated future results expressed or implied by such forward-looking statements.Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “anticipate,” “project,” “seek,” “hope,” “should,” or “could” and similar words.

Such forward-looking statements include, without limitation, statements regarding (1) anticipated future operating and financial performance, financial position and liquidity, growth opportunities and growth rates, acquisition and divestiture opportunities, business prospects, regulatory and competitive outlook, investment plans or results, strategic alternatives, business strategies, and other similar statements of expectations or objectives; (2) our plans for operating the business and using cash, including our pricing, investment, expenditure and cash deployment plans; (3) our projected ability to deploy vessels in the spot market, under medium to long-term contracts, or otherwise; (4) our outlook on prevailing vessel time charter and voyage rates, including estimates of the impact of dry cargo fleet supply or demand on time charter and voyage rates; (5) estimated fair values of capital assets, the recoverability of the cost of those assets, the estimated future cash flows attributable to those assets, and the appropriate discounts to be applied in determining the net present values of those estimated cash flows; (6) estimated scrap values of assets; (7) estimated proceeds from selling assets and the anticipated cost of constructing or purchasing new or existing vessels; (8) estimated fair values of financial instruments, such as interest rate and currency swap agreements; (9) estimated losses under self-insurance arrangements; (10) estimated gains or losses on certain contracts, trade routes, lines of business or asset dispositions; (11) estimated outcomes of, or losses attributable to litigation; (12) estimated obligations, and the timing thereof, relating to vessel repair or maintenance work; (13) the adequacy of our capital resources and the availability of additional capital resources on commercially acceptable terms; (14) our ability to remain in compliance with applicable regulations; (15) anticipated trends in supplemental cargoes; (16) anticipated trends in government spending, funding, or appropriations; (17) our ability to effectively service our debt or meet the financial covenants contained in our debt and lease agreements; (18) financing opportunities and sources (including the impact of financings on our financial position, financial performance or credit ratings); (19) changes in laws, regulations or tax rates, or the outcome of pending legislative or regulatory initiatives; and (20) assumptions underlying any of the foregoing. 

Our forward-looking statements are based on our judgment and assumptions as of the date such statements are made concerning future developments and events, many of which are beyond our control.  These forward-looking statements, and the assumptions upon which they are based, are inherently speculative and are subject to a number of risks and uncertainties.  Actual events and results may differ materially from those anticipated, estimated, projected, expressed or implied by us in those statements if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect.

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Factors that could cause our actual results to differ materially from our expectations include our ability to:

· maximize the usage of our vessels and other assets on favorable economic terms, including our ability to (i) renew our time charters and other contracts when they expire, (ii) maximize our carriage of supplemental cargoes and (iii) improve the return on our international flag dry bulk fleet if and when market conditions improve;

· timely and successfully respond to competitive or technological changes affecting our markets;

· effectively handle our leverage by servicing and complying with each of our debt instruments, thereby avoiding any defaults under those instruments and avoiding cross defaults under others;

· secure financing on satisfactory terms to repay existing debt or support operations, including to acquire, modify, or construct vessels if such financing is necessary to service the potential needs of current or future customers;

· successfully retain and hire key personnel, and successfully negotiate collective bargaining agreements with our maritime labor unions on reasonable terms without work stoppages;

· pay preferred or common stock dividendsdeclared by our Board of Directors, the payments or declaration of which may be affected by changes in, among other things, our cash requirements, spending plans, business strategies, cash flows or financial position;

· procure adequate insurance coverage on acceptable terms; and

· manage the amount and rate of growth of our operating, capital, administrative and general expenses.

Other factors that could cause our actual results to differ materially from our expectations include, without limitation:

· changes in domestic or international transportation markets that reduce the demand for shipping generally or our vessels in particular;

· industry-wide changes in cargo freight rates, charter rates, vessel design, vessel utilization or vessel valuations, or in charter hire, fuel or other operating expenses;

· unexpected out-of-service days on our vessels whether due to drydocking delays, unplanned maintenance, accidents, equipment failures, adverse weather, natural disasters, piracy or other causes;

· the rate at which competitors add or scrap vessels, as well as demolition scrap prices and the availability of scrap facilities in the areas in which we operate;

· the possibility that the anticipated benefits from corporate or vessel acquisitions cannot be fully realized or may take longer to realize than expected.

· political events in the United States and abroad, including terrorism, piracy and trade restrictions, and the response of the U.S. and other nations to those events;

· election results and the appropriation of funds by the U.S. Congress, including the impact of any further cuts to federal spending similar to the “sequestration” cuts;

· changes in foreign currency exchange rates or interest rates;

· changes in laws and regulations, including those related to government assistance programs, inspection programs, trade controls, quarantines and protection of the environment;

· our continued access to credit on favorable terms;

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· the ability of customers to fulfill their obligations with us, including the timely receipt of payments by the U.S. government;

· the performance of our unconsolidated subsidiaries, revenue sharing agreements, and joint ventures;

· the impact on our financial statements of nonrecurring accounting charges that may result from, among other things,  our ongoing evaluation of business strategies, asset valuations, and organizational structures;

· the frequency and severity of claims against us, and unanticipated outcomes of current or possible future legal proceedings; and

· the effects of more general factors such as changes in tax laws or rates, in accounting policies or practices, in medical or pension costs, or in general market, labor or economic conditions.

These and other uncertainties related to our business are described in greater detail elsewhere below in this report, including “Risk Factors” appearing in Part II, Item 1A of this report.

You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements.  Given these uncertainties, we caution investors not to unduly rely on our forward-looking statements.  We undertake no obligation to update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise.  Furthermore, any information about our intentions contained in any of our forward-looking statements reflects our intentions as of the date of this report, and is based upon, among other things, industry and competitive conditions, economic and market conditions, and our assumptions as of such date.  We may change our intentions, strategies or plans (including our dividend plans) at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.

Executive Summary

Overview of Third Quarter 2014

Overall Strategy

We operate a diversified fleet of U.S. and InternationalFlag vessels that provide domestic and international maritime transportation services to commercial and governmental customers primarily under medium to long-term contracts. Our business strategy consists of identifying niche growth opportunities, utilizing our extensive experience to meet those opportunities, maintaining a diverse portfolio of medium to long-term contracts, and maintaining strong relations with our long-standing customer base by providing quality transportation services.

Overview

Our year over year total gross voyage profits remained stable with $12.6 million recorded in the third quarter of 2014 versus $12.7 million recorded in the third quarter of 2013, despite a charge to earnings of approximately $1.0 million of unamortized dry dock cost due to our decision to accelerate the dry docking of our Belt Self-Unloading Bulk Coal Carrier vessel to the fourth quarter of 2014 in order to provide us with more operational flexibility in 2015.  Non-operating days increased from a total of 155 days in the

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third quarter of 2013 to 170 days for the same period in 2014 primarily due to regularly scheduled dry docking  of several of our PCTC vessels. 

During the third quarter of 2014, we derived $58.8 million from fixed contracts as compared to $54.7 million for the same period in 2013. This improvement in our fixed revenues was primarily driven by an increase in the number of operating days in our UOS fleet and the addition to our fleet of one Multi-Purpose Heavy Lift vessel beginning October 1, 2013. Our variable revenues decreased from $23.2 million in the third quarter of 2013 to $15.6 million for the third quarter of 2014.

Our variable revenues continue to be impacted by (i) lower revenues from our Handysize Bulk Carriers, which continues to be hampered by depressed charter rates, and (ii) lower supplemental cargo revenues. The decrease in our supplemental cargo revenues is due principally to lower volumes of supplemental cargoes, coupled with reduced cargo space in our PCTCs arising from higher volumes of shipped automobiles.  Based on current market conditions, we anticipate our supplemental cargoes will stabilize or marginally improve in the near term. 

In August 2014, we executed a negotiated early buy out under the lease of our 2007 PCTC vessel that we were previously operating under a ten-year operating lease. The vessel was financed at more attractive interest rates and provides us the flexibility to reflag the vessel to an International Flag. Also in August 2014, we refinanced one of our 1999 PCTCs with RBS Asset Finance which allowed us to obtain a more favorable interest rate and extend the loan maturity by three years. 

Consolidated Financial Performance – Third Quarter 2014 vs. Third Quarter 2013

Our net loss was approximately $2.6 million and $2.2 million for the three months ending September 30, 2014 and 2013, respectively.  Operating income for the third quarter of 2014, decreased by approximately $885,000 when compared to the results for the same period of 2013. The decrease in our operating income is primarily due to lower results from our dry bulk segment and supplemental cargoes and an increase in our consolidated administrative and general expenses.  This decrease was offset by approximately $800,000 of additional interest expense incurred in the third quarter of 2013 from the refinancing of our senior credit facility, and approximately $768,000 of derivative loss from settlement of an interest rate swap contract as a result of the early pay-off of the old credit facility during the period ending September 30, 2013.

Segment Performance – Third Quarter 2014 vs. Third Quarter 2013

Jones Act

§ Increase of $158,000 in gross voyage profits primarily based on an improvement in UOS results.

§ Early drydock of the Belt Self-Unloading Bulk Carrier resulted in accelerated amortization of approximately $1.0 million of drydock expense.

Pure Car Truck Carriers

§ Decrease in gross voyage profits from $3.1 million to $2.6 million.

§ Decrease primarily based on less supplemental cargo and fewer operating days due to scheduled drydock.

Dry Bulk Carriers

§ Decrease in gross voyage profits of approximately $47,000.

§ Results driven by a decrease year over year in dry bulk charter rates and an increase in the loss of the unconsolidated entities.

Rail-Ferry

§ A $466,000 decrease in gross voyage profits was driven by a decrease in cargo volume carried primarily northbound.

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Specialty Contracts

§ Increase of $333,000 in gross voyage profits primarily due to our recent minority investment in two unconsolidated entities owning two Asphalt and two Chemical Tankers.

§ Increase also partly due to the deployment of a Multi-Purpose Heavy Lift vessel acquired in late 2013.

Financial Discipline & Balance Sheet

§ Total unrestricted cash available of $21.0 million at September 30, 2014.  

§ Cash generated by operating activities of $15.3 million for the nine months ended September 30, 2014.

§ Working capital of $10.6 million at September 30, 2014.

§ Approximately $1.0 million of borrowing capacity available on our line of credit at September 30, 2014.

Because of the overall condition of the global economy in general, and the marine transportation industry specifically, we continue to test our long-lived assets quarterly to determine whether or not the fair value of each of our segment vessels (based upon projected segment undiscounted cash flows) exceed each of our segment vessels’ carrying amounts. Based on our most recent assessment, we determined that no impairments existed as of September 30, 2014.  However, see Note 22 - Subsequent Events for more information on an impairment charge that we plan to record in the fourth quarter of 2014 in connection with reclassifying certain assets as being held for sale assuming approval from our Board of Directors.  As of this same date, the total aggregated fair value of the vessels that we own, based on the most recent appraisal of each vessel, was $500.6 million, as compared to the total aggregated net book value of $456.3 million.

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The following table lists the 55 vessels in our operating fleet as of September 30, 2014, 22 of which are owned by our wholly-owned subsidiaries:

		Vessels		Year Built	Business Segment (1)	Owned	Bareboat Charter/  Leased	Operating Contracts	Partially Owned	Weight Carrying Capacity (MT)
1		ENERGY ENTERPRISE	BELT SELF-UNLOADING BULK CARRIER	1983	Jones Act	X				38,847
2		SULPHUR ENTERPRISE	MOLTEN SULPHUR CARRIER	1994	Jones Act		X			27,678
3		COASTAL 303/AL ENTERPRISE	ATB TUG/BARGE UNIT	1973/1981	Jones Act	X				23,314
4		NAIDA RAMIL/PEGGY PALMER	ATB TUG/BARGE UNIT (2)	1994/1981	Jones Act	X				34,367
5		COASTAL 101/LA ENTERPRISE	ATB TUG/BARGE UNIT	1973/1984	Jones Act	X				33,529
6		COASTAL 202/FL ENTERPRISE	ITB TUG/BARGE UNIT	1977	Jones Act	X				33,220
7		TX ENTERPRISE	BULK CARRIER	1981	Jones Act	X				37,061
8		MS ENTERPRISE	BULK CARRIER	1980	Jones Act	X				37,244
9		ROSIE PARIS	HARBOR TUG	1974	Jones Act	X				N/A
10		GREEN BAY	PURE CAR/TRUCK CARRIER	2007	PCTC	X				18,312
11		GREEN COVE	PURE CAR/TRUCK CARRIER	1999	PCTC		X			22,747
12		GREEN DALE	PURE CAR/TRUCK CARRIER	1999	PCTC	X				16,157
13		GREEN LAKE	PURE CAR/TRUCK CARRIER	1998	PCTC		X			22,799
14		GREEN POINT	PURE CAR/TRUCK CARRIER	1994	PCTC	X				14,930
15		GREEN RIDGE	PURE CAR/TRUCK CARRIER	1998	PCTC	X				21,523
16		GLOVIS COUNTESS	PURE CAR/TRUCK CARRIER	2010	PCTC	X				18,701
17		BALI SEA	ROLL-ON/ROLL-OFF SPV	1995	RF	X				20,737
18		BANDA SEA	ROLL-ON/ROLL-OFF SPV	1995	RF	X				20,664
19		EGS CREST	HANDYSIZE BULK CARRIER	2011	Dry Bulk	X				35,914
20		EGS TIDE	HANDYSIZE BULK CARRIER	2011	Dry Bulk	X				35,916
21		EGS WAVE	HANDYSIZE BULK CARRIER	2011	Dry Bulk	X				35,916
22		BULK AUSTRALIA	CAPESIZE BULK CARRIER	2003	Dry Bulk	X				170,578
23		BULK AMERICAS	SUPRAMAX  BULK CARRIER	2012	Dry Bulk	X				57,959
24		OSLO BULK 1	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
25		OSLO BULK 2	MINI BULK CARRIER	2010	Dry Bulk				X	8,028
26		OSLO BULK 3	MINI BULK CARRIER	2010	Dry Bulk				X	8,029
27		OSLO BULK 4	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
28		OSLO BULK 5	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
29		OSLO BULK 6	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
30		OSLO BULK 7	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
31		OSLO BULK 8	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
32		OSLO BULK 9	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
33		OSLO BULK 10	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
34		OSLO BULK 11	MINI BULK CARRIER	2008	Dry Bulk				X	8,000
35		SEA CARRIER	MINI BULK CARRIER	2010	Dry Bulk				X	9,300
36		OSLO CARRIER 2	MINI BULK CARRIER	2010	Dry Bulk				X	9,300
37		OSLO CARRIER 3	MINI BULK CARRIER	2011	Dry Bulk				X	9,300
38		SEA STEAMER	MINI BULK CARRIER	2011	Dry Bulk				X	9,300
39		OSLO MERCHANT	MINI BULK CARRIER	2004	Dry Bulk				X	16,300
40		MT BOW TRAJECTORY	CHEMICAL TANKER	2014	SP				X	50,510
41		MT BOW TRIBUTE	CHEMICAL TANKER	2014	SP				X	50,510
42		MT ASPHALT SPRING	ASPHALT TANKER	2007	SP				X	6,726
43		MT ASPHALT SUMMER	ASPHALT TANKER	2007	SP				X	6,654
44		MAERSK ALABAMA	CONTAINER VESSEL	1998	SP		X			17,525
45		MAERSK CALIFORNIA	CONTAINER VESSEL	1992	SP		X			25,375
46		MARINA STAR 2	CONTAINER VESSEL	1982	SP			X		13,193
47		MARINA STAR 3	CONTAINER VESSEL	1983	SP			X		13,193
48		TERRITORY TRADER	CONTAINER VESSEL	1991	SP			X		3,183
49		FLORES SEA	MULTI-PURPOSE VESSEL	2008	SP			X		11,151
50		SAWU SEA	MULTI-PURPOSE VESSEL	2008	SP			X		11,184
51		OCEAN PORPOISE	TANKER	1996	SP	X				13,543
52		OCEAN HERO	TANKER	1996	SP			X		13,543
53		OCEAN PREMIER	TANKER	2011	SP		X			19,382
54		OCEAN GIANT	MULTI-PURPOSE HEAVY LIFT DRY CARGO VESSEL	2012	SP		X			19,382
55		OSLO WAVE	ICE STRENGTHENED MULTI-PURPOSE VESSEL	2000	SP	X				17,381
						22	7	6	20	1,212,425
	(1)	Business Segments:
		Jones Act	Jones Act
		PCTC	Pure Car Truck Carriers
		RF	Rail-Ferry
		Dry Bulk	Dry Bulk Carriers
		SP	Specialty Contracts
	(2)	Currently Inactive

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Management Gross Voyage Profit Financial Measures

In connection with discussing the results of our various operating segments in this report, we refer to “gross voyage profit,” a metric that management reviews to assist in monitoring and managing our business. The following table provides a reconciliation of consolidated gross voyage profit to our operating income.

	Three Months Ended September 30,				Year to date as of September 30,
(All Amounts in Thousands)		2014		2013		2014		2013
Revenues	$	74,410	$	77,938	$	223,856	$	233,959
Voyage Expenses*		61,629		64,832		187,586		195,931
Net Loss of Unconsolidated Entities		176		360		364		705
Gross Voyage Profit		12,605		12,746		35,906		37,323
Vessel Depreciation		6,290		6,130		19,528		17,705
Other Depreciation		18		17		54		51
Gross Profit		6,297		6,599		16,324		19,567
Other Operating Expenses:
Administrative and General Expenses		5,398		4,994		16,209		16,597
Loss on Sale  of Other Assets		1		6		1		6
Less:  Net Loss of Unconsolidated Entities		(176)		(360)		(364)		(705)
Total Other Operating Expenses		5,223		4,640		15,846		15,898
Operating Income	$	1,074	$	1,959	$	478	$	3,669
* Includes Intangible Amortization

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RESULTS OF OPERATIONS

Three MONTHS ENDED SEPTEMBER 30, 2014

COMPARED TO THE Three MONTHS ENDED SEPTEMBER 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	32,101		$	15,290		$	1,910		$	-		$	9,462		$	-		$	58,763
Variable Revenue		-			3,520			1,786			9,435			1,497			(591)			15,647
Total Revenue from External Customers		32,101			18,810			3,696			9,435			10,959			(591)			74,410
Intersegment Revenues(Eliminated)		-			-			-			-			-			(4,321)			(4,321)
Intersegment Expenses Eliminated		-			-			-			-			-			4,321			4,321
Voyage Expenses		25,340			16,199			2,933			7,940			10,351			(1,134)			61,629
Loss (Income) of Unconsolidated Entities		-			-			373			81			(278)			-			176
Gross Voyage Profit	$	6,761		$	2,611		$	390		$	1,414		$	886		$	543		$	12,605
Gross Voyage Profit Margin		21	%		14	%		11	%		15	%		8	%		92	%		17	%
2013
Fixed Revenue	$	31,003		$	14,843		$	919		$	-		$	7,928		$	-		$	54,693
Variable Revenue		-			7,990			4,634			10,419			227			(25)			23,245
Total Revenue from External Customers		31,003			22,833			5,553			10,419			8,155			(25)			77,938
Intersegment Revenues (Eliminated)		-			-			-			-			-			(5,519)			(5,519)
Intersegment Expenses Eliminated		-			-			-			-			-			5,519			5,519
Voyage Expenses		24,400			19,728			4,801			8,494			7,602			(193)			64,832
Loss of Unconsolidated Entities		-			-			315			45			-			-			360
Gross Voyage Profit	$	6,603		$	3,105		$	437		$	1,880		$	553		$	168		$	12,746
Gross Voyage Profit Margin		21	%		14	%		8	%		18	%		7	%		(672)	%		16	%

For the purposes of this report, (i) “operating days” are defined as days that our vessels/units are generating revenues or positioning to generate revenues, (ii) “non-operating days” are defined as all other days, and (iii) “working capital” is defined as the difference between our total current assets and total current liabilities.

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Revenues and Gross Voyage Profits

The following table shows the breakout of revenues by segment between fixed and variable for the three months ended September 30, 2014 and 2013:

The changes in revenues and expenses associated with each of our segments are discussed within the gross voyage profit analysis below:

Jones Act: Overall revenues and gross voyage profit increasedby $1.1 million and $158,000, respectively, when comparing third quarter 2014 to 2013. The increase was primarily due to additional operating days in the third quarter of 2014 compared to the same period in the prior year, which had a significant amount of scheduled drydock days.  Voyage expenses increased year over year primarily due to higher drydock amortization expenses.

Pure Car Truck Carriers: Overall revenues decreased by $4.0 million when comparing third quarter 2014 to 2013.  The decrease was driven primarily by areduction in the amount of supplemental cargo carried and a decrease in on-hire days due to scheduled drydocks in 2014.  As noted under “- Executive Summary – Overview,” we anticipate that our supplemental cargo revenues

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will stabilize or marginally improve in the fourth quarter of 2014.  The decrease in revenue resulted in gross voyage profit decreasing from $3.1 million in the third quarter of 2013 to $2.6 million in the same period in 2014. Our fixed contract revenues for this segment were $15.3 million and $14.8 million in third quarter 2014 and 2013, respectively. Our variable revenues were  $3.5 million and $8.0 million for the same periods in 2014 and 2013, respectively, and represent revenues derived from supplemental cargoes. The third quarter 2014 operating cost for the vessels in this segment, as a percent of revenue, was on or near budget and comparable to our third quarter 2013 operating costs.

Dry Bulk Carriers: Overall revenues decreased $1.9 million and gross voyage profit decreased $47,000 when comparing the third quarter of 2014 to 2013.  This decrease is due to  lower Handysize results caused by depressed charter rates, partially offset by our Capesize vessel which is on a fixed time charter through the end of 2015. 

Rail-Ferry: Revenues decreased by $984,000 when comparing the third quarter of 2014 to the same period in 2013. Gross voyage profit decreased by $466,000 when comparing 2013 to 2014.  The decreases are attributable mainly to a decrease in cargo volume carried, primarily northbound cargoes.  The vessels operated this past quarter within our operating budget.

Specialty Contracts:  Revenues increased from $8.2 million in the third quarter 2013 to $11.0 million in the third quarter 2014 while gross voyage profit increased by $333,000 for the same period.  The improved revenues are the result of the addition of one Multi-Purpose Heavy Lift chartered-in vessel October 1, 2013, which generated a small profit margin.  Most of the improvement in gross voyage profit is attributable to our recent minority investment in two unconsolidated entities owning two Asphalt and two Chemical Tankers.

Administrative and General Expense:  Administrative and general expensesincreased from $5.0 million in the third quarter of 2013 to $5.4 million in the third quarter of 2014.  The following table shows the significant components of administrative and general expenses for the third quarter of 2014 and 2013.  

		Three Months Ended		Three Months Ended
A&G Account		September 30, 2014		September 30, 2013		Variance
Wages and Benefits	$	3,052	$	2,705	$	347	(1)
Executive Stock Compensation		352		302		50
Professional Services		670		662		8
Office Building Expense		410		386		24
System Hardware & Software		155		103		52
Other		759		836		(77)
TOTAL:	$	5,398	$	4,994	$	404

(1) The increase is due to self-insurance healthcare expenses.

Other Income and Expense

Interest Expensewas comparable at $3.1 millionfor both the third quarter of 2014 and 2013.  Both 2014 and 2013 interest expense included accelerated amortization on bank fees related to debt refinancings.

Derivative Loss/(Gain) increased to a $89,000 gain in the third quarter of 2014  from a  $768,000 of loss in the third quarter of 2013 based on changes in the fair value of the ineffective portion of our 2010 interest rate swap.  

Other income from vessel financing decreased from $522,000 to $456,000 in the third quarter of 2013 and 2014, respectively, driven by a lower principal balance upon which interest is earned on a note receivable issued to us in connection with our sale of two vessels to an Indonesian company in the third quarter of 2009.

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Foreign Exchange Loss of $30,000 in the third quarter of 2014 is associated with our normal recurring period-end currency revaluations, including the impact of revaluing our obligations relating to the Yen-denominated financing of one of our PCTC vessels. The exchange loss was principally attributable to a change in the exchange rate of 105.31 Yen to 1 USD at December 31, 2013 compared to 109.65 Yen to 1 USD at September 30, 2014, net of the impact of foreign forward exchange contracts we entered into in the fourth quarter of 2013 and subsequently rolled forward into 2014 and 2015, to limit our exposure to fluctuations in the value of the Yen.  For more information on these arrangements, see Note 10 – Derivative Instruments.

Income Taxes

We recorded a tax provisionof $1.1 million on our $1.2 million of loss before taxes and equity in net loss of unconsolidated entities for the three months ended September 30, 2014.  For the three months ended September 30, 2013, we recorded an income tax provision of $18,000 on our $1.8 million of loss before taxes and equity in net loss of unconsolidated entities. Included in both our 2014 and 2013 tax provisions are taxes on our qualifying U.S. flag operations, which continue to be taxed under a “tonnage tax” regime rather than under the normal U.S. corporate income tax regime.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2013, including “Note J - Income Taxes” to the consolidated financial statements included therein.

Equity in Loss of Unconsolidated Entities

Equity in net loss from unconsolidated entities, net of taxes, improved by $184,000 from the three months ended September 30, 2013 to the three months ended September 30, 2014 primarily due to our 30% investment in entities owning two Asphalt and two Chemical Tankers during 2014.

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RESULTS OF OPERATIONS

NINE MONTHS ENDED September 30, 2014

COMPARED TO THE NINE MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	94,408		$	46,200		$	5,194		$	-		$	26,650		$	-		$	172,452
Variable Revenue		-			11,319			8,881			27,101			4,624			(521)			51,404
Total Revenue from External Customers		94,408			57,519			14,075			27,101			31,274			(521)			223,856
Intersegment Revenues(Eliminated)		-			-			-			-			-			(12,963)			(12,963)
Intersegment Expenses Eliminated		-			-			-			-			-			12,963			12,963
Voyage Expenses		77,370			50,355			9,992			22,874			28,826			(1,831)			187,586
Loss (Income) of Unconsolidated Entities		-			-			542			148			(326)			-			364
Gross Voyage Profit	$	17,038		$	7,164		$	3,541		$	4,079		$	2,774		$	1,310		$	35,906
Gross Voyage Profit Margin		18	%		12	%		25	%		15	%		9	%		(252)	%		16	%
2013
Fixed Revenue	$	90,581		$	48,043		$	2,457		$	-		$	21,519		$	-		$	162,600
Variable Revenue		-			27,755			12,183			29,115			2,253			53			71,359
Total Revenue from External Customers		90,581			75,798			14,640			29,115			23,772			53			233,959
Intersegment Revenues (Eliminated)		-			-			-			-			-			(16,557)			(16,557)
Intersegment Expenses Eliminated		-			-			-			-			-			16,557			16,557
Voyage Expenses		72,106			63,574			14,688			23,894			22,100			(431)			195,931
Loss of Unconsolidated Entities		-			-			653			52			-			-			705
Gross Voyage Profit (Loss)	$	18,475		$	12,224		$	(701)		$	5,169		$	1,672		$	484		$	37,323
Gross Voyage Profit Margin		20	%		16	%		(5)	%		18	%		7	%		913	%		16	%

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Revenues and Gross Voyage Profits

The following table shows the breakout of revenues by segment between fixed and variable for the nine months ended September 30, 2014 and 2013:

The changes in revenues and expenses associated with each of our segments are discussed within the gross voyage profit analysis below:

Jones Act: Revenues increased by $3.8 million, while gross voyage profit decreasedby $1.4 million, when comparing the nine months ending September 30, 2014 to 2013. The increase in revenue was primarily due to additional operating days in the nine months ending September 30, 2014 compared to the nine months ending September 30, 2013.  The decrease in gross voyage profit is the result of an increase in voyage expenses, primarily non-cash drydock amortization charges.

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Pure Car Truck Carriers: Overall revenues decreased by $18.3 million when comparing the nine months ending September 30, 2014 to 2013.  The decrease was driven primarily by areduction in supplemental cargoes.  For more information, see “- Executive Summary – Overview.”  The decrease in revenue resulted in a decrease in gross voyage profit year over year of $5.0 million.  

Dry Bulk Carriers:  Revenues decreased by $566,000 and gross voyage profit increased by $4.2 million, when comparing the nine months ending September 30, 2014 to 2013.  The improvement in our results was primarily driven by the deployment of our Capesize vessel on a fixed time charter through the end of 2015 and lower voyage expenses due to the redelivery of a chartered-in vessel in 2014.

Rail-Ferry: Revenues decreased by $2.0 million when comparing the nine months ending September 30, 2014 to 2013. Gross voyage profit decreased by $1.1 million when comparing 2014 to 2013 and was driven by lower northbound cargo volumes. 

Specialty Contracts:  Revenues increased from $23.8 million in the nine months ending September 30, 2013 to $31.3 million in the nine months ending September 30, 2014 while gross voyage profit increased by $1.1 millionover the same period in 2013.  The improvement reflects the increased utilization of our Ice Strengthened Multi-Purpose vessel, which was in drydock during part of the first and second quarters of 2013, and the addition of one Multi-Purpose Heavy Lift chartered-in vessel in the fourth quarter of 2013.

Administrative and General Expense:  Administrative and general expensesdecreased from $16.6 million in the nine months ended September 30, 2013 to $16.2 million in the nine months ended September 30, 2014.  The following table shows the significant components of administrative and general expenses for the nine months ended September 30, 2014 and 2013.  

		Nine Months Ended		Nine Months Ended
A&G Account		September 30, 2014		September 30, 2013		Variance
Wages and Benefits	$	8,437	$	9,387	$	(950)	(1)
Executive Stock Compensation		1,183		1,023		160	(2)
Professional Services		1,851		1,692		159	(3)
Office Building Expense		1,215		1,175		40
System Hardware & Software		629		572		57
Other		2,894		2,748		146
TOTAL:	$	16,209	$	16,597	$	(388)

(1) The reduction is due to accrued bonuses for two quarters of 2013 compared to none in 2014.

(2)  Our 2013 stock compensation expense included only one plan year whereas 2014 included three stock incentive plan years  (2012, 2013, and 2014).

(3) The increase in Professional Services is due to increase in audit and consulting fees.

Other Income and Expense

Interest Expense was $7.3 million for the nine months ending September 30, 2014, which was $86,000 less than the interest expense for the same period of 2013 due principally to fees paid in connection with entering into our new senior credit facility in 2013, as well as unamortized bank fees written off from the old credit facility that we retired in September 2013.

Derivative Loss/(Gain) increased to a $57,000 gain in the nine months ending September 30, 2014 from a  $486,000 loss for the same period of 2013 based on changes in the fair value of the ineffective portion of a 2010 interest rate swap.

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Other income from vessel financing decreased from $1.6 million to $1.4 million in the nine months ending September 30, 2013 and 2014, respectively, driven by a lower principal balance upon which interest is earned on a note receivable issued to us in connection with our sale of two vessels to an Indonesian company in the third quarter of 2009.

Foreign Exchange Loss of $123,000 in the nine month ending September 30, 2014 is associated with our normal recurring period-end currency revaluations, including the impact of revaluing our obligations under the forward contracts relating to the Yen-denominated financing of one of our PCTC vessel. The exchange loss was principally attributable to a change in the exchange rate of 105.31 Yen to 1 USD at December 31, 2013 compared to 109.65 Yen to 1 USD at September 30, 2014, net of the impact of foreign forward exchange contracts we entered into in the fourth quarter of 2013 and subsequently rolled forward into 2014 and 2015, limiting our exposure to fluctuations in the value of the Yen.  For more information on these arrangements, see Note 10 – Derivative Instruments.

Income Taxes

We recorded a tax provision of $912,000 on our $5.2 million of loss before taxes and equity in net loss of unconsolidated entities for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, we recorded an income tax provisionof$68,000 on our $2.1 million of income before taxes and equity in net loss of unconsolidated entities.In general, the company’s interim tax provision for the nine months ended September 30, 2014, is determined by applying an estimated annual effective tax rate to the year to date earnings subject to U.S. income taxes; primarily our U.S. flag Jones Act results from operations.Included in both our 2014 and 2013 tax provisions are taxes on our qualifying U.S. flag operations, which continue to be taxed under a “tonnage tax” regime rather than under the normal U.S. corporate income tax regime.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2013, including “Note J - Income Taxes” to the consolidated financial statements included therein.

Equity in Net Loss of Unconsolidated Entities

Equity in net loss from unconsolidated entities, net of taxes, improved from a loss of $705,000 for the nine months ending September 30, 2013 to a loss of $364,000 for the same period of 2014, driven primarily by our 30% investment in entities owning two Asphalt and two Chemical Tankers during 2014.

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LIQUIDITY AND CAPITAL RESOURCES

The following discussion should be read in conjunction with the more detailed Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows included in Item 1 of Part I of this report.

Working Capital

Our working capital decreased from $16.4 million at December 31, 2013 to $10.6 million at September 30, 2014. This $5.8 million decrease in working capital was primarily driven by a $8.1 million decrease in cash partially offset by a $3.9 million increase in our receivables due to the pending refund of the predelivery installments on a cancelled new building vessel.  Total current liabilities of $78.2 million as of September 30, 2014 included $23.3 million of current maturities of long-term debt.

Restricted Cash

As of September 30, 2014 we had approximately $1.4 million of cash classified as restricted cash, of which $1.0 million relates to a performance guarantee and a  one third pre-month funding of the upcoming quarterly scheduled debt payment in the amount of $387,000 on the PCTC bank debt we incurred in the third quarter of 2014.

As of December 31, 2013, we had $8.5 million of cash classified as restricted cash, of which $6.0 million was associated with a performance guarantee and $2.5 million was associated with a covenant to maintain a minimum loan to value ratio on loans associated with the financing of five of our vessels.  The loan to value was normalized in 2014 and this deposit was returned during the second quarter of 2014.

Net Cash Provided by Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2014, was $15.3 million after adjusting our net loss of $6.4 million for non-cash items such as depreciation, deferred charges, amortization, and non-cash stock based compensation, which was partially offset by $5.2 million and $7.0 millionin changes in accounts receivable and deferred drydocking payments, and various other items specified in our consolidated statements of cash flows.

Net Cash Used in Investing Activities

Net cash used in investing activities of $60.3 million for the nine months ended September 30, 2014,primarily consisted of $64.7  million of capital outlays, which is primarily made up of $55.6 million for purchase of the 2007 PCTC vessel, $7.9 million related to our minority investment in two Chemical Tankers and two Asphalt Tankers delivered in the second quarter of 2014, and $4.2 million for the purchase of real property in New Orleans.  These amounts were partially offset by a  $9.1 milliondecrease in restricted cash, of which $2 million was previously in long term assets,and $3.2 million of cash received on notes receivables.

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Net Cash Provided By Financing Activities

Net cash provided by financing activities of $46.0 million for the nine months ended September 30, 2014 included $94.5 million in proceeds from issuance of new debt, which was largely offset by $26.8 million of regularly scheduled debt payments,$11.4 million of debt paid off early on one of our 1999 PCTCs vessels, and $9.4 million of common stock and preferred stock dividend payments.

Capital Outlays

Our capital outlays are separated into two categories, our investments in capital assets and capital expenditures that enhance the value or safety of our vessels, including scheduled drydock costs.

In addition to our periodic vessel purchases, we regularly incur drydocking and other capital expenditures on an ongoing basis in order to extend the useful life of our vessels, to improve and modernize our fleet, to comply with various requirements or standards imposed by insurers or governmental or quasi-governmental authorities, and to upgrade our on-shore infrastructure. The amount of our capital expenditures is influenced by, among other things, changes in regulatory, quasi-regulatory or insurance requirements or standards, drydocking schedules for our various vessels, demand for our services, cash flow generated by our operations, and cash required for other purposes. Based on our current strategic plans, we currently estimate our total capital outlays for 2014 will be approximately $25.0 million,which includes approximately $9.1 million to acquire and renovate our prospective new headquarters building in New Orleans, Louisiana.  The following table discloses (i) our capital outlays for the first three quarters of 2014 and (ii) our projected capital outlays for the balance of 2014:

	Quarter Ended		Quarter Ended		Quarter Ended			Estimated Expenditures
(All Amounts In Thousands)	31-Mar		30-Jun		30-Sep			31-Dec		Total
Capital Improvements	$	386	$	304	$	1,802		$	-	$	2,492
Building		3,565		89		588			4,854		9,096
Construction In Progress		1,919		-		(3,955)	*		-		(2,036)
Other		13		163		262			500		938
	$	5,883	$	556	$	(1,303)		$	5,354	$	10,490
Drydock		1,775		2,323		2,960			7,460		14,518
Total Capital Outlays	$	7,658	$	2,879	$	1,657		$	12,814	$	25,008

*During the month ended September 30, 2014, in accordance with the provisions of the agreement with the ship builder, the pre-delivery installments were requested to be refunded to us due to cancellation of the shipbuilding contract.

Debt and Lease Obligations

Debt Obligations

During the quarter ended September 30, 2014, we entered into a new loan agreement for the purchase of our 2007 PCTC that we had previously been operating under a sale-leaseback arrangement.  Under this new loan agreement, we borrowed$38.5 million at a fixed rate of 4.35% with 24 quarterly payments with a final quarterly balloon payment of $20.7 million due on August 28, 2020.  We incurred deferred loan costs in the amount of approximately $519,000 on the new loan.  The new loan agreement requires us to pre-fund a portion of the upcoming quarterly scheduled debt payment currently constituting$387,000, which amount is classified as restricted cash on the balance sheet.  See Note 21 – Early Lease Buy Back for more information on this transaction.  During the quarter ended September 30, 2014, we also refinanced one of our 1999 PCTCs by paying off all $11.4 million of our bank debt owed

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to DnB ASAand borrowing $23.0 million under a new loan agreement with RBS Asset Finance.  Under this new RBS loan agreement, we are obligated to pay variable interest at a 30 day Libor rate plus 2.75%and principal amortized over84 monthly payments plus a final payment in August 2021.  The new loan costs and the old unamortized loan costs of approximately $230,000 and $225,000, respectively, were expensed as losses on the debt extinguishment.

On September 24, 2013, we terminated our previously-existing revolving credit facility scheduled to expire in September 2014 and five-year variable rate financing agreement that we entered into on November 30, 2012.  Concurrently with these terminations, we and all of our domestic subsidiaries entered into a new senior secured credit facility (“Credit Facility”) that (i) increased our borrowing capacity up to $95.0 million, with a potential increase up to $145.0 million on the terms described below, (ii) modified our covenant restrictions, (iii) extended the maturity date of our facility to September 24, 2018, (iv) further monetized the value of our U.S. assets, and (v) allowed us to refinance and retire all indebtedness outstanding under our previously-existing revolving credit facility and five-year variable rate financing agreement.  The total amount paid off on September 24, 2013 was approximately $46.6 million, of which $21.0 million was drawn from the new revolving credit facility under the Credit Facility.

The Credit Facility includes a term loan facility in the principal amount of $45.0 million and a revolving credit facility (the “LOC”) in the principal amount up to $50 million. The LOC includes a $20.0 million sublimit for the issuance of standby letters of credit and a $5.0 million sublimit for swingline loans.  The Credit Facility carries an accordion feature, whereby an additional term loan of up to $50.0 million may be advanced at the sole discretion of the lenders subject to certain financial requirements.  The Credit Facility has four lenders, each with commitments ranging from $15.0 million to $30.0 million. As of September 30, 2014, we had $41.0 million of borrowings and approximately $8.0 million of letters of credit outstanding under our LOC, leaving us with approximately $1.0 million of borrowing capacity.

Under the Credit Facility, each of our domestic subsidiaries is a joint and several co-borrower.  The obligations of all the borrowers under the Credit Facility are secured by all personal property of the borrowers, including the U.S. flagged vessels owned by ISH’s domestic subsidiaries and collateral related to such vessels.  Several of our International flagged vessels are pledged as collateral securing several of our other secured debt facilities.

Effective March 30 and September 30, 2014, we amended the Credit Facility in the manner discussed below under the heading “– Debt Covenants.”

The Credit Facility, as amended, includes usual and customary covenants and events of default for credit facilities of its type.  Our ability to borrow under the Credit Facility is conditioned upon continued compliance with such covenants, including, among others, (i) covenants that restrict our ability to engage in certain asset sales, mergers or other fundamental changes, to incur liens or to engage in various other transactions or activities and (ii) various financial covenants, including those currently stipulate that we maintain a consolidated leverage ratio of 4.25 to 1.0, liquidity of not less than $20.0 million, and a consolidated net worth of not less than the sum of $228.0 million plus 50% of our consolidated net income earned after December 31, 2011, plus 100% of the proceeds of all issuances of equity interests received after December 31, 2011 (with all such terms or amounts as defined in or determined under the Credit Facility). For information on the prior terms of these covenants, amendments to our covenants, and our compliance with these covenants, see “– Debt Covenants” below.

We owe various sums under several other credit agreements.  For information on these other credit agreements, see Note 11.

Lease Obligations

As of September 30, 2014, we held six vessels under operating contracts and seven vessels under bareboat charter or lease agreements. The types of vessels held under these agreements include (i) a Molten-Sulphur Carrier in our Jones Act segment, (ii) two

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Pure Car Truck Carriers that operate under our PCTC segment, (iii) two Multi-Purpose vessels, two Tankers,  five Container vessels, and one Heavy Lift vessel, all of which operate in our Specialty Contracts segment.

Our vessel operating lease agreements have early buy-out options and fair value purchase options that enable us to purchase the vessels under certain specified circumstances.  The lease agreements impose certain financial covenants, including defined minimum working capital and net worth requirements, and prohibit us from incurring, without prior written consent, additional debt or lease obligations, subject to certain specified exceptions.  These financial covenants are generally similar, but not identical, to the above-described financial covenants set forth in the Credit Facility.  See “- Debt Covenants” below.

On February 22, 2012, we completed a sale and leaseback transaction with Wells Fargo Bank Northwest National Association of our 2007-built PCTC.  The sale generated proceeds of $59.0 million, which we used to pay down debt of $54.5 million. Thereafter, we leased back the vessel under a ten-year lease agreement with early buyout options exercisable in 2017 and 2019 under certain specified circumstances.  The sale resulted in a gain of $14.9 million, which we recorded as a deferred gain on the balance sheet and recognize as income over the length of the lease. In September 2014, we determined that it was better under current market conditions to buy back this vessel and have the flexibility to reflag it as a foreign vessel in anticipation of deploying the vessel at a higher operating margin later in 2014.  We repurchased the vessel for $55.6 million and recorded the remaining unamortized deferred gain of $11.2 million as a reduction in the cost basis of the asset.

On November 27, 2012, we sold our Molten-Sulphur Carrier to BMO Harris Equipment Finance Company for approximately $32 million cash and commenced a seven-year lease agreement with an early buy-out option that can be exercised in 2017 under certain specified circumstances. This lease is classified as an operating lease, with the $8.0 million gain on this sale-leaseback being deferred and recognized over the term of the lease.

On November 27, 2012, we sold a 1998-built PCTC to CapitalSource Bank for approximately $31 million cash and commenced a nine-year lease agreement with an early buy-out option that can be exercised in 2017. This lease is classified as an operating lease, with the $11.7 million gain on this sale-leaseback being deferred and recognized over the term of the lease.

We used the net proceeds of approximately $63 million from the November 27, 2012 transactions to finance a portion of the purchase price for our acquisition of UOS, which was completed on November 30, 2012.

On December 27, 2012, we sold a 1999-built PCTC to BB&T Equipment Finance for $32 million cash and commenced a nine-year lease agreement with an early buy-out option that can be exercised in 2015 or again in 2018 under certain specified circumstances.  This lease is classified as an operating lease.

In conjunction with our acquisition of UOS in November 2012, we assumed a binding commitment to purchase a Tug/Barge unit previously operated by UOS under a third-party lease.  On September 25, 2013, we concluded the purchase of the Tug/Barge unit.

We also conduct certain of our operations from leased office facilities.  On September 19, 2013, we executed a five year lease agreement for office space in Tampa, Florida housing ourUOS employees. The lease calls for graduated payments in equal amounts over the 60-month term of the lease. In addition to the Tampa office, we signed a new two year lease agreement for our Shanghai, China office space. This lease is effective October 1, 2013 through September 30, 2015.

As previously announced, we intend to relocate our corporate headquarters from Mobile, Alabama to New Orleans, Louisiana during the fourth quarter of 2015 after we complete renovations of a new facility in downtown New Orleans. Our renovation and relocation costs are expected to be partially offset by approximately $10.2 million in incentives offered by the State of Louisiana. We are planning to terminate our Mobile office lease in late 2015 and in doing so will incur approximately $3.0 million in lease termination expenses. There were no significant expenditures in the third quarter of 2014 related to the relocation. 

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For additional information on our fixed commitments, see the table quantifying our aggregate debt and lease obligations included in our Annual Report on Form 10-K for the year ended December 31, 2013 under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations and Other Commitments.”  For additional information on pending financing transactions that would impact our fixed commitments, see Note 22 herein.

Debt Covenants

All of our principal credit agreements and operating leases require us to comply with various loan covenants, including financial covenants that require minimum levels of net worth, working capital, liquidity, and interest expense or fixed charges coverage and a maximum amount of debt leverage. For more information, see “Risk Factors” in Item 1A of Part II of this report.

During the period endingMarch 31, 2014,our principal senior secured lenders and two of our lessors agreed at our request to, among other things, defer the date upon which we were required to attain a more stringent leverage ratio and increased liquidity from December 31, 2013 to June 30, 2014.  Under the prior terms, we were required to maintain a consolidated leverage ratio of 4.50 to 1.0 through the fiscal quarter ending December 31, 2013 and 4.25 to 1.0 thereafter, and liquidity of not less than $15 million through December 31, 2013 and $20 million thereafter.  Under these new terms, we were required to maintain a consolidated leverage ratio of 4.50 to 1.0 through the fiscal quarter ending June 30, 2014, and 4.25 to 1.0 thereafter, and liquidity of not less than $15 million through June 30, 2014 and $20 million thereafter.  

EffectiveSeptember 30, 2014,  certain of our lenders and lessors agreed at our request to adjust our covenants to less stringent levels to provide relief from the accounting impact of our above-described August 2014 vessel purchase and refinancing transactions (which, as noted in Note 21, required us to reduce our cost basis in the purchased vessel).Two of our lenders have elected to adjust our definition of EBITDA to disregard the impact of these transactions, while the remainder of our lenders and lessors agreed to amend the consolidated leverage and fixed charge coverage ratios as follows: we are required to maintain a consolidated leverage ratio of 5.00 to 1.0 through the fiscal quarter ending December 31, 2015,  then 4.75 to 1.0 through the fiscal quarter ending March 31, 2016, then 4.50 to 1.0 beginning the quarter ending June 30, 2016 through the quarter ending September 30, 2016, and 4.25 to 1.0 thereafter and the minimum fixed charge coverage ratio we are required to maintain is 1.10 to 1.0 beginning with the quarter ending September 30, 2014 through the quarter ending December 31, 2014, 1.15 to 1.0 beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015, 1/20 to 1.0 beginning with the quarter ending March 31, 2016 through the quarter ending June 30, 2016, and 1.25 to 1.0 thereafter (in each case as calculated under our amended debt agreements).  Consequently, as of September 30, 2014, we were in compliance with all of our debt covenants.

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The following table represents the actual and required covenant amounts required under our principal credit agreements and operating leases (after giving effect to the new terms described above) for the nine months ending September 30, 2014:  

		Actual		Required
Net Worth (thousands of dollars) (1)	$	318,998	$	298,338
Working Capital (thousands of dollars) (2)	$	10,550	$	1
Interest Expense Coverage Ratio (minimum) (3)		6.94		2.50
EBITDAR to Fixed Charges Ratio (minimum) (4)		1.39		1.10
Total Indebtedness to EBITDAR Ratio (maximum) (5)		4.58		5.00
Minimum Liquidity (6)	$	22,024	$	20,000

1. Defined as total stockholder’s equity less goodwill.

2. Defined as total current assets minus total current liabilities.

3. Defined as the ratio between consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to interest expense.

4. Defined as the ratio between fixed charges to consolidated earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”).

5. Defined as the ratio between adjusted unconsolidated indebtedness to consolidated EBITDAR.

6. Defined as available borrowing capacity under our line of credit plus available cash.

Our failure to produce improved results could jeopardize our ability to attain one or more of our financial covenants in the future.  Based on current conditions and our expectations that our performance will stabilize or improve marginally in the near term, we currently believe thatwe will be able to attain all of our financial covenants through the end of 2014, but cannot assure you of this.  Our ability to attain our financial covenants after December 31, 2014 will be dependent upon a wide range of factors, several of which are outside of our control.  For additional information, see “Risk Factors – We cannot assure you that we will be able to comply with all of our loan covenants” in Item 1A of Part II of this report.

In the unanticipated event that our cash flow and capital resources are not sufficient to fund our debt service obligations, we could be forced to reduce or delay capital expenditures, sell assets, reduce or eliminate dividends payments, obtain additional capital, enter into financings of our unencumbered vessels or restructure debt. Based on current circumstances, we believe we can continue to fund our working capital and routine capital, investment liquidity needs through cash flow from operations. To the extent we are required to seek additional capital, our efforts could be hampered by continuing uncertainties in the credit markets. See “Risk Factors” in Item 1A of Part II of this report.

Pension Obligations

We contributed $450,000 to our pension plan during the nine months ended September 30, 2014.We contributed another $150,000 in October 2014, which we expect to be the final payment for 2014.

Shelf Registration Statement and Other Matters

On December 4, 2013, the SEC declared effective our new universal shelf registration statement, which enables us to sell up to $200 million of certain registered debt and equity securities.  The new registration statement replaces our 2010 universal shelf registration statement, under which we issued $56.5 million of preferred stock.

We routinely evaluate the acquisition of additional vessels or businesses and from time to time evaluate possible vessel divestitures.  At any given time, we may be engaged in discussions or negotiations regarding acquisitions or dispositions.  We generally do not announce our acquisitions or dispositions until we have entered into a definitive agreement.  We may require

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additional financing in connection with any such acquisitions, refinancing transactions or to increase working capital.  Our consummation of any such financing transactions could have a material impact on our financial condition or operations.

Cash Dividend Payments

The payment of dividends to common stockholders and preferred stockholders are at the discretion and subject to the approval of our Board of Directors.  On October 29, 2008, our Board of Directors authorized the reinstitution of a quarterly cash common stock dividend program beginning in the fourth quarter of 2008. Since then, the Board of Directors has declared a cash common stock dividend each quarter.

On January 7, 2014, the Board of Directors declared a dividend of $2.375 and $2.25 per share on our 9.5% Series A Cumulative Perpetual Preferred Stock and 9.0% Series B Cumulative Perpetual Preferred Stock, respectively, to preferred stockholders of record on January 29, 2014, which was paid on January 30, 2014. Additionally, the Board of Directors declared a dividend of $0.25 per share of common stock to common stockholders of record as of February 17, 2014, which was paid on March 3, 2014.

On April 7, 2014, the Board of Directors declared a dividend of $2.375 and $2.25 per share on our 9.5% Series A Cumulative Perpetual Preferred Stock and 9.0% Series B Cumulative Perpetual Preferred Stock, respectively,  to preferred stockholders of record on April 29, 2014, which was paid on April 30, 2014.On April 30, 2014, the Board of Directors declared a dividend of $.25 per share of common stock to common stockholders of record as of May 16, 2014, which was paid on June 3, 2014.

On July 7, 2014, the Board of Directors declared a dividend of $2.375 and $2.25 per share on our 9.5% Series A Cumulative Perpetual Preferred Stock and 9.0% Series B Cumulative Perpetual Preferred Stock, respectively,  to preferred stockholders of record on July 29, 2014, which was paid on July 30, 2014.On July 30, 2014, the Board of Directors declared a dividend of $.25 per share of common stock to common stockholders of record as of August 15, 2014, which was paid on September 4, 2014.

On October 6, 2014, the Board of Directors declared a dividend of $2.375 and $2.25 per share on our 9.5% Series A Cumulative Perpetual Preferred Stock and 9.0% Series B Cumulative Perpetual Preferred Stock, respectively, to preferred stockholders of record on October 29, 2014,payable on October 30, 2014.On October29, 2014, the Board of Directors declared a dividend of $.25 per share of common stock to common stockholders of record as of November 17, 2014, which is payable on December 3, 2014.

Holders of our equity securities have no contractual or other legal right to receive dividends.  See “Risk Factors” in Part II, Item 1A, of this report.

Environmental Issues

Our environmental risks primarily relate to oil pollution from the operation of our vessels.  We have pollution liability insurance coverage with a limit of $1 billion per occurrence, with deductible amounts not exceeding $250,000 for each incident. Certain international maritime organizations have proposed various regulations relating to marine fuel emissions and ballast water that could in the aggregate increase our operating costs.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standard Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers”, to amend Accounting Standards Codification Topic 605, “Revenue Recognition”.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the

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consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for annual reporting periods beginning on or after December 15th, 2016.  Early adoption is not permitted.  We are currently evaluating the impact of the adoption of this standard.

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation”, to give explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award.  ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015.  Earlier adoption is permitted.  The effective date is the same for both public business entities and all other entities.  We are currently evaluating the impact of the adoption of this standard.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern”, to give explicit guidance on managements’ requirement to analyze whether there areconditions or events, considered in the aggregate, that raise substantial doubtabout the entity’s ability to continue as a going concern within one year after thedate that the financial statements are issued (or within one year after the datethat the financial statements are available to be issued when applicable).  ASU 2014-15 are effective for the annual period ending afterDecember 15, 2016, and for annual periods and interim periods thereafter. Earlyapplication is permitted.  We are currently evaluating the impact of the adoption of this standard.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK

In the ordinary course of our business, we are exposed to foreign currency, interest rate, and commodity price risks. We utilize derivative financial instruments including interest rate swap agreements and forward exchange contracts, and in the past we have also utilized commodity swap agreements, to manage certain of these exposures. We hedge firm commitments or anticipated transactions and do not enter into derivatives for speculative purposes. We neither hold nor issue financial instruments for trading purposes.

Interest Rate Risk.  The fair value of our cash and short-term investment portfolio at September 30, 2014 approximated its carrying value due to the short-term duration of the underlying securities. The potential decrease in fair value resulting from a hypothetical 10% change in interest rates at quarter-end for our investment portfolio is not material.

The fair value of long-term debt, which is calculated based on the current rates offered to us versus current rates on our outstanding obligations, was approximately $254.7 million as of September 30, 2014.  We pay variable interest on all of our long-term debt, except with respect to the debt we incurred in the third quarter of 2014 to finance the repurchase of our 2007 PCTC and our variable-to-fixed interest rate swap described below.  Accordingly, an increase in interest rates would not materially impact the fair value of our long-term debt, although it would increase our interest expense.

From time to time, we enter into interest rate swap agreements to manage well-defined interest rate risks and we record the fair value of the interest rate swaps as an asset or liability on our balance sheet.  At September 30, 2014, we had one interest rate swap applicable to 16% of our long-term debt, which has a variable-to-fixed interest rate swap with respect to a Yen-based facility for the financing of a PCTC delivered in March 2010. The notional amount under this contract is $42.0 million (based on a Yen to USD exchange rate of 109.65 as of September 30, 2014). With the bank exercising its option to reduce the underlying Yen loan from 80% to 65% funding of the vessel’s delivery cost, the 15% reduction represents the ineffective portion of this swap, which consists of the portion of the derivative instrument that is no longer supported by underlying borrowings. The change in fair value related to the ineffective portion of this swap is reflected in our results of operations for the third quarter of 2014 as an  $89,000 gain.

For the interest rate swap we have in place, we are the fixed rate payor and the commercial banksare the floating rate payor.  The fair value of this agreement at September 30, 2014, which is estimated based on the amount that the banks would receive or pay to terminate the swap agreements at the reporting date, taking into account current market conditions and interest rates, was a liability of $5.4 million. A hypothetical 10% decrease in interest rates as of September 30, 2014, would have increased this liability to an aggregate liability of $6.1 million.

Commodity Price Risk.  As of September 30, 2014, we did not have commodity swap agreements in place to manage our exposure to the risk of increases in the price of fuel necessary to operate both our Rail-Ferry and Jones Act segments. We have fuel surcharges and escalation adjustments in place for both of these segments, which we believe mitigates the price risk for those services during 2014. We estimate that a 20% increase in the average price of fuel for the period January 1, 2014 through September 30, 2014 would have resulted in an increase of approximately $662,000 in our fuel costs for the same period, and in a corresponding decrease of approximately $0.09 in our basic and diluted earnings per share based on the shares of our common stock outstanding for the nine months endedSeptember 30, 2014. The additional fuel costs assume revenue from escalation adjustments but that no additional revenue would be generated from fuel surcharges, even though we believe that we could have passed on to our customers some or all of the fuel price increases through the aforementioned fuel surcharges during the same period, subject to the need to maintain competitive freight rates. Our time charterers in our PCTCs, Dry Bulk Carriers and Specialty Contracts segments are responsible for purchasing vessel fuel requirements under governing time charters; thus, our fuel price risk in these segments is currently limited to

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any voyage charters concluded within our Dry Bulk Carriers segment.  Since the voyage charters in our Dry Bulk Carriers segment currently are generally short term transactions the applicable voyage freight rates are based on current fuel costs.

Foreign Exchange Rate Risk.  We entered into foreign exchange contracts to hedge certain firm purchase commitments during 2013 and 2014. These contracts mature on various dates during 2014 and 2015 (See Note 10). The fair value of these contracts at September 30, 2014 is a liability of approximately $2.0 million. A hypothetical 10% adverse change in exchange rates at September 30, 2014 would have increased this liability to an aggregate liability of approximately $2.2 million. On January 23, 2008, one of our wholly-owned subsidiaries entered into a Senior Secured Term Loan Facility denominated in Japanese Yen for the purchase of a newbuilding PCTC, which was completed and delivered in March 2010. Subsequently, we entered into a variable-to-fixed Yen interest rate swap (the “Facility”) designed to set the interest at 2.065%.  In June 2009, we received notification that our lender would be exercising its option to reduce the Yen financing on this vessel from 80% to 65% of the delivered vessel cost. The loan was fully drawn in March 2010 to the full amount available of Yen 5,102,500,000. Under current accounting guidelines, since this Facility is not denominated in our functional currency, the outstanding principal balance of the Facility as of the end of each reporting period is to be revalued in terms of USD, with any adjustments in the principal amount of USD owed recorded to earnings. Prior to December 2013, due to the amount of the Facility, we sustained fluctuations that significantly impacted our reported results.  In December 2013, we entered into three forward foreign exchange contracts totaling approximately Yen 3.3 billion in order to limit our exposure to currency fluctuations and to provide us with the option to fully payoff our current Yen Facility at an approximate exchange rate of 102.53 to $1.00.  One of these contracts was exercised in March 2014 and one was exercised in June 2014.  The remaining July contract for 3.1 billion Yen was rolled forward under four contracts, one which expired in September 2014, two which coincide to the next two scheduled quarterly loan installments on December 2014 and March 2015 of approximately 85 million Yen each, and the remaining 2.885 billion Yen mature in April 2015.These remaining contracts limit our exposure to currency fluctuations.As such, any future fluctuations of the Yen will no longer materially affect our reported results.  Also at the time of entering into these contracts, we negotiated our Yen Facility with the current Lenders, which will now allow for that Facility to be converted to a USD based Facility at the above exchange rate.  All Facility terms and the April 2015 maturity date would remain as currently reflected if we exercise our conversion rights. 

The change in the Yen to USD exchange rate at September 30, 2014 compared to December 31, 2013, resultedin a net gain primarily associated with the ineffective portion of our Yen facility of $57,000 for the nine months ended September 30, 2014.  This amount is reported under Interest and Other on our Consolidated Statements of Income (Loss).

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ITEM 4 – CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation of the effectiveness of our “disclosure controls and procedures,” as that phrase is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934.  The evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of September 30, 2014 in providing reasonable assurance that they have been timely alerted of material information required to be disclosed in this report.  During the secondquarter of 2014, we did not make any changes to our internal control over financial reporting that materially affected, or that we believe are reasonably likely to materially affect, our internal control over financial reporting. 

The design of any system of controls is based in part upon certain assumptions about the likelihood of future events and contingencies, and there can be no assurance that any design will succeed in achieving its stated goals.  Because of inherent limitations in any control system, misstatements due to error or fraud could occur and not be detected.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

For a discussion of our pending dispute with the U.S. Customs agency, see Note 8.For a discussion of our other legal proceedings, see Item 3 of our annual report on Form 10-K for the year ended December 31, 2013, as supplemented and updated by our disclosures in Item 1 of Part II of our subsequently filed quarterly reports on Form 10-Q.

ITEM 1A.  RISK FACTORS

The following discussion of “risk factors” identifies the most significant risks or uncertainties that could (i) materially and adversely affect our business, financial condition, results of operations, liquidity or prospects or (ii) cause our actual results to differ materially from our anticipated results or other expectations.  The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our Consolidated Financial Statements and related Notes included elsewhere in this report.  Please note that the following discussion is not intended to comprehensively list all risks or uncertainties faced by us.  Our operations or actual results could also be similarly impacted by additional risks and uncertainties that (i) are not currently known to us, (ii) we currently deem to be immaterial or (iii) are not specific to us, such as general economic conditions.

Our industry is cyclical and has experienced a recent decline in the demand for certain of the services we offer, which could negatively impact our revenues and earnings.

Historically, the shipping industry has been cyclical.  The nature, timing and degree of changes to industry conditions are generally unpredictable and are impacted by factors beyond our control.  Various factors influence the demand for our transportation services, including changes in (i) worldwide demand for the commercial products we carry, (ii) the volume of cargoes we carry for or the amount of services we provide to the U.S. government, and (iii) the supply and demand of vessels. The worldwide supply of vessels generally increases with deliveries of new, refurbished or converted vessels and decreases with the scrapping of older vessels.

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If the available supply of vessels exceeds the number of vessels being scrapped, vessel capacity and competition in the markets where we operate may increase.  In the absence of a corresponding increase in the demand for these vessels, the time charter hire and cargo rates for our vessels could fluctuate significantly and result in, among other things, lower operating revenues, earnings and asset values. 

Our operating results for any particular period can vary significantly based on the amount of supplemental cargoes we carry during that period, which is completely outside of our control.  During periods of high supplemental cargoes, such as 2008 and 2009, we benefit significantly from the additional utilization of our vessels to carry these supplemental cargoes.  Conversely, during periods of low supplemental cargoes, such as the first and second quarter of 2014, our operating results are adversely affected.  Due to the inherent variability of these supplemental cargoes, we cannot predict the revenues or profits attributable to any supplemental cargo that we may carry for any particular future period.

We may not be able to renew our time charters and contracts when they expire at favorable rates or at all. 

During the ninemonth period ended September 30, 2014, we received approximately 77.04% of our revenue from time charters and other fixed contracts.   However, there can be no assurance that any of these charters or contracts, which are generally for periods of one year or more, will be renewed. 

Moreover, you should be aware that shipping rates are based on several factors that are unpredictable and beyond our control.  Accordingly, even if we are able to renew our charters or other fixed contracts when they lapse, we may not be able to earn rates or carry volumes comparable to those received under the expired charters or contracts, which would adversely affect our revenues, earnings and cash flows.  In the event we cannot deploy a vessel at economically viable rates, we may opt to lay up the vessel until such time that spot or charter rates become attractive again.  During the period of lay-up, the vessel will continue to incur expenditures such as insurance and maintenance costs.

While we currently have no vessels deployed, from time to time, we enter into charter agreements with various agencies or departments of the U.S. government that allow the customer to terminate the agreement at any time without cause, subject to the payment of certain early termination fees.

If our exposure to the spot market increases, our revenues could suffer and our expenses could increase.

At September 30, 2014, we deployed 22.96% of our vessels in the spot market, where rates are typically volatile and subject to short-term market fluctuations.  The spot market for marine transportation services is highly competitive, and charter rates for most dry cargo vessels in the spot market are currently low in relation to historical rates.  If we deploy a greater percentage of our vessels in the spot market, we may experience a lower overall utilization of our fleet through waiting time or ballast voyages, leading to a decline in our operating revenue and gross profit and an increased risk that we will be unable to recoup our investment in those vessels. 

For a discussion of our proposed plans to dispose of certain underperforming assets, please see Note 22.

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We operate in a highly competitive industry. 

The shipping industry is intensely competitive and can be influenced by economic and political events that are largely outside the control of shipping companies.  Many of our current and potential competitors:

•may have greater resources or stronger brands than we have;

•own larger and more diverse fleets of vessels;

•conduct operations or raise capital at lower costs than us; or

•may be better positioned to adapt to changes in market or economic conditions. 

Changes in the political or regulatory environment can also create competition that is not necessarily based on normal considerations of profit and loss.  Consequently, there can be no assurance that we will be able to deploy our vessels on economically attractive terms, maintain attractive freight rates, pass cost increases through to our customers or otherwise successfully compete against our competitors. Any failure to remain competitive in the shipping industry could have an adverse effect on our results of operations and financial condition.

Competition could adversely impact us in several ways, including (i) the loss of customers and market share, (ii) the possibility of customers reducing their usage of our vessels or services, (iii) our need to expend substantial time or money on vessel acquisitions or capital improvement projects, (iv) our need to lower prices or increase marketing expenses to remain competitive and (v) our inability to diversify by successfully offering new marine transportation services.

A significant amount of our revenues were derived from four customers, and our revenues could decrease significantly if these customers were lost or their revenues decreased.

For the years ended December 31, 2011, 2012 and 2013, and for theninemonths ended September 30, 2014, we derived 34%, 41%, 27%, and 8% of our revenues for each of these respective periods from contracts with various agencies or departments of the U.S. government.  Likewise, we derived 15%, 15%, 13%, and 12% of our revenues for the same periods, respectively, from contracts with a Japanese shipping company.  Additionally, we derived 21%, and 24% of our revenues for the year ended December 31, 2013 and the nine months ended September 30, 2014, respectively, from contracts with two major U.S. corporations. We are unable to assure you that these customers will continue to contract with us on similar terms, or will not decide to contract with our competitors or perform their own shipping functions themselves.  Our inability or failure to continue to retain these customer relationships, to continue to employ our vessels at rates comparable to those historically earned from these customers, or to charter these vessels otherwise in a reasonable period of time or at all could adversely affect our operations and performance.  Specifically, in recent periods, Congress has reduced levels of the U.S. government’s discretionary spending on a wide range of programs, including recent “sequestration” spending reductions.  Future additional cuts in discretionary spending could adversely affect our revenue derived from the U.S. government.

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We cannot assure you that quarterly dividends on, or any other payments in respect of, our outstanding capital stock will be made timely or at all.

For the reasons noted below, we cannot assure you that we will be able to pay timely quarterly dividends on our common stock at the current rate or at all. Likewise, we cannot assure you that we will be able to pay quarterly dividends on, or make other payments in respect of, our Series A and Series B Preferred Shares timely or at all.

Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay us dividends.

We currently have outstanding 250,000 shares of our 9.50% Series A Cumulative Redeemable Perpetual Preferred Stock and 316,250 shares of our 9.00% Series B Cumulative Redeemable Perpetual Preferred Stock.  Subject to limited exceptions, no dividends may be declared or paid with respect to our common stock unless (i) full cumulative dividends have been or contemporaneously are paid on all of our outstanding Series A and Series B Preferred Shares through the most recent dividend payment dates applicable to each such series and (ii) we are in compliance with a net worth to preferred stock ratio applicable to both such series. 

Any quarterly dividends on our common stock and our Series A and Series B Preferred Shares will be paid from funds legally available for such purpose when, as and if declared by our board of directors.  You should be aware that certain factors may influence our decision, or adversely affect our ability, to pay dividends on our common stock or our Series A and Series B Preferred Shares, including, among other things:

•our supply of cash or other liquid assets might decrease for any of the reasons described in this report, including (i) due to changes in competition, regulation, vessel rates, fleet deployment, taxes, capital markets, operating or drydock costs, or litigation expense or (ii) the impact of any liquidity shortfalls caused by the below-described restrictions on the ability of our subsidiaries to lawfully transfer cash to us;

•any of the events described in this report that impact our future financial position or performance, including changes in vessel deployment or vessel rates, changes in our costs, the number of unscheduled off-hire days for our fleet, the number of days required for dry-docking of our vessels, prevailing global and regional economic and political conditions, and the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business;

•our cash requirements or plans might change for a wide variety of reasons, including changes in our capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans, pension funding requirements or plans, or financial position;

•our ability to service and refinance our current and future indebtedness and our ability to borrow or raise additional capital to satisfy our capital needs;

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•restrictions imposed by our existing, or any future, credit facilities, debt securities or leases, including restricted payment and leverage covenants;

•the amount of cash that our subsidiaries may make available to us, whether by dividends, loans or other repayments, may be subject to (i) restrictions imposed by state law and (ii) restrictions imposed by the terms of credit facilities applicable to certain subsidiaries and, potentially, the terms of any future indebtedness that these subsidiaries may incur; and

•limitations on cash payments to stockholders under Delaware law, including limitations that require dividend payments be made out of surplus or, subject to certain limitations, out of net profits for the then-current or preceding year in the event there is no surplus.

Based on its evaluation of these and other relevant factors, our board of directors may, in its sole discretion, decide not to declare a dividend on our common stock or our Series A or B Preferred Shares for any quarterly period for any reason, regardless of whether we have funds legally available for such purposes. Holders of our equity securities should be aware that they have no contractual or other legal right to receive dividends.

We cannot assure that we will be able to comply with all of our loan covenants.

All of our credit agreements and several of our lease agreements impose restrictions or limitations on our business and require us to comply with various loan covenants.  The restrictions or limitations these covenants place on us include limitations on our ability to freely: (i) consolidate or merge; (ii) incur new or certain types of debt; (iii) engage in transactions with affiliates; (iv) create liens or permit them to exist on our assets; (v) sell certain assets; (vi) enter into sales and leaseback transactions; and (vii) directly invest in assets other than vessels.  These covenants may prevent us from engaging in transactions that otherwise might be considered beneficial to us and our stockholders.

In addition, all of our credit agreements and several of our lease agreements include financial covenants that stipulate minimum levels of net worth, working capital, liquidity and maximum levels of debt and debt leverage.  Our ability to satisfy these and other covenants depends on our results of operations and ability to respond to changes in business and economic conditions.  Several of these matters are beyond our control or may be significantly restricted by contractual or other limitations.  Failure to satisfy any of these financial covenants could cause us to suffer an event of default, which could, among other things, accelerate our obligations under any such agreement or preclude us from making future borrowings thereon.

Moreover, because our debt obligations are represented by separate agreements with different lenders, in some cases the breach of any of these covenants or other default under one agreement may create an event of default under other agreements, resulting in the acceleration of our obligation to pay principal, interest and potential penalties under such other agreements (even though we may otherwise be in compliance with all of our obligations under those agreements). Thus, an event of default under a single agreement, including one that is technical in nature or otherwise not material, could result in the acceleration of significant indebtedness under multiple lending agreements. If amounts outstanding under such agreements were to be accelerated, there can be no assurance that (i) we would be able to obtain additional sources of cash to repay the accelerated indebtedness, (ii) our assets or operations would generate sufficient cash proceeds or cash flow to repay such accelerated indebtedness, or (iii) our lenders would not

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proceed against the collateral securing that indebtedness. Likewise, an event of default under one of these agreements could also prevent us from being able to access our revolving credit facility for future borrowings.  The acceleration of any or all amounts due under these agreements or the loss of the ability to borrow under our revolving credit facility could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We cannot assure you that we will be able to comply with all of our financial or other loan covenants.  As discussed further in Item 2 of Part I of this report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”, we successfully approached our principal senior secured lenders and lessors during the first and third quarter of 2014 to solicit their agreement to amend the financial covenants.  The agreement of our lenders and lessors to this amendment permitted us to remain in compliance with our covenants through the end of the third quarter of 2014.  

If we default under our credit agreements or certain of our principal lease agreements, we could be forced to reduce or delay capital expenditures, sell assets, obtain additional capital, enter into financings of our unencumbered vessels, restructure debt, modify our current business plan, or curtail certain of our operations.  We cannot assure you that we will be able to implement these options timely or at all, or that they will enable us to meet all of our covenants currently in effect.    

For further detailed information on our compliance with our financial covenants as of September 30, 2014, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in Item 2 of Part I of this report.

Marine transportation is inherently risky, and insurance may be insufficient to cover losses that may occur to our assets or result from our operations.  

The operations of our vessels are subject to various inherent risks, including:

•catastrophic marine disaster;

•adverse weather conditions or natural disasters;

•mechanical failure;

•collisions;

•hazardous substance spills;

•seizure or expropriation of our vessels by governments, pirates, combatants or others; and

•navigation and human errors. 

The occurrence of any of these events may result in, among other things, damage to or loss of our vessels and our vessels' cargo or other property, delays in delivery of cargo, damage to other vessels and the environment, loss of revenues, termination of vessel charters or other contracts, fines, penalties or other restrictions on conducting business, damage to our reputation and customer

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relationships, and injury to personnel.  Such occurrences may also result in a significant increase in our operating costs or liability to third parties. 

Although we maintain insurance coverage against most of these risks at levels our management considers to be customary in the industry, risks may arise for which we are not adequately insured.  Various claims, such as loss of hire, may not be covered by our policies.  Additionally, any particular claim may be subject to deductibles or other coverage restrictions, the aggregate impact of which could be material.  We cannot assure you that we will be able to renew our existing insurance coverage at commercially reasonable rates or that insurance will remain available at reasonable rates for each of our foreseeable risks that we seek to insure, especially those relating to terrorism or piracy.  Similarly, we cannot assure you that our insurance coverage will be adequate to cover future claims as they arise, or that available insurance will cover all foreseeable risks, particularly those involving catastrophic environmental liability.  Any uninsured or underinsured loss could have an adverse effect on our financial performance or condition.

Additionally, certain of our insurance coverage is maintained through mutual “protection and indemnity” associations, which are mutual insurance clubs whose members must contribute payments to cover losses sustained by other club members.  As a mutual club, a substantial portion of its continued viability to effectively manage liability risks is reliant upon the premiums paid by its members. As a member of such associations, we may incur the obligation to satisfy payments in addition to previously established or budgeted premiums to the extent member claims would surpass the reserves of the association. We may be subject to calls or premiums in amounts based not only on our own claim records, but also the claim records of all other members (or the members of affiliated clubs) over which we have no control. Our payment of these calls could result in significant additional expenses.  In addition, we cannot assure you that other association members called upon to pay our claims will be able to do so, particularly since the exposure to such calls would be concentrated among a limited number of shipping companies facing the same types of risks as ours.

Economic conditions, a prolonged economic downturn, economic uncertainty, an increase in trade protectionism or a change in trade patterns in the markets where we operate may have a material adverse effect on our business, financial condition and results of operations.

The demand for our transportation services has been and will continue to be affected by domestic and global economic conditions.  Worldwide economic growth has been sluggish since 2008, which has contributed to lower charter rates for marine transportation services since then.  Many experts believe that a confluence of factors in the United States, Europe, Asia and developing economies could result in a prolonged period of economic downturn, slow growth or economic uncertainty.  If these conditions persist, our customers and potential customers may experience deterioration in their business, which may result in a lower demand for our transportation services or impair the ability of our customers or other third parties to pay amounts owed to us.  Moreover, our business, financial condition, results of operations, ability to pay dividends and our future prospects will likely be materially and adversely affected by a prolonged economic downturn in any of these countries or regions.

The demand for our transportation services is also exposed to the risk that increases in trade protectionism or changes in trade patterns will adversely affect our business. If global economic conditions remain slack and uncertain, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing the demand for shipping. Similarly, if changes in production costs or other factors cause manufacturing companies to locate a greater share of their production facilities nearer to

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their consumers, then demand for our shipping services could be further depressed. Either of these could have a material adverse effect on our financial condition, results of operations, ability to pay dividends and future prospects.

If Congress does not make sufficient appropriations under the National Defense Authorization Act for any Fiscal Year, we may not continue to receive certain payments.

If Congress does not make sufficient appropriations under the National Defense Authorization Act for any fiscal year, we may not continue to receive annual payments with respect to certain of our U.S. Flag vessels that we have committed to the federal government under the U.S. Maritime Security Program.  Under this program, which is currently in effect through 2025, each participating vessel received annual payments of $3.1 million.  However, our 2013 payment was reduced to $2.8 million due to sequestration cuts, but our 2014 payment is scheduled to equal the full annual payment of $3.1 million per vessel. As of September 30, 2014, eight of our vessels operated under contracts issued under this program.  Since payments under this program are subject to annual appropriations by Congress and are not guaranteed, we cannot assure that we will continue to receive these annual payments, in full or in part.

Our business would be adversely affected if we failed to comply with the Jones Act, or if this law was modified or repealed.

A substantial portion of our shipping operations are conducted in the U.S. coastwise trade. Under U.S. federal laws known as the “Jones Act,” this trade is restricted to vessels built in the United States, owned and manned by U.S. citizens and registered under U.S. Flag.  Our failure to comply with these restrictions could subject us to severe penalties, including the permanent loss of the right to engage in U.S. coastwise trade.  If the Jones Act were repealed, substantially amended or waived, it could potentially result in additional competition from vessels built in generally lower-cost foreign shipyards and owned and manned by foreign nationals, which could have an adverse effect on our business, results of operations and financial condition. We cannot assure you that the Jones Act will not be repealed or modified in a way that would be detrimental to our business.

Terrorist attacks, piracy and international hostilities can affect the transportation industry, which could adversely affect our business.

Terrorist attacks or piracy attacks against merchant ships, the outbreak of war, or the existence of international hostilities could adversely affect us in several ways, including:

•damaging the world economy;

•adversely affecting the availability of and demand for transportation services generally, or our vessels in particular;

•increasing the cost of insurance;

•disrupting our vessel usage or deployment; and

•adversely affecting the value of our vessels or our ability to profitably operate our vessels and serve our customers. 

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Over the past several years, piracy attacks on merchant ships have remained high, particularly in the Gulf of Aden and off the East Coast of Africa.  Our industry is a sector of the economy that we believe is particularly likely to be adversely impacted by the effects of political instability, terrorist attacks, war, international hostilities or piracy.  In addition, we conduct operations in Indonesia, Southern Mexico, West Africa, the Arabian Gulf, and other areas that are particularly likely to be exposed to the risk of these potential adverse effects.

The market value of vessels fluctuates significantly, which could adversely affect our liquidity, result in breaches of our financing agreements or otherwise adversely affect our financial condition.

The market values of vessels fluctuate over time.  The fluctuation in market value of vessels over time is based upon various factors, including:

•the age of the vessel;

•general economic and market conditions affecting the ocean transportation industry, including the demand for cargoes and the availability of vessel financing;

•the number of vessels in the world fleet;

•the types and sizes of vessels available;

•changes in trading patterns or trading routes that affect demand for particular sizes and types of vessels;

•the cost of vessels under construction and scrap prices;

•prevailing levels of time charter and voyage rates;

•changes in regulation or competition from other shipping companies and other modes of transportation; and

•technological advances in vessel design and propulsion.

Declining values of our vessels could adversely affect us in several respects, including reducing our liquidity by limiting our ability to raise cash by refinancing vessels.  Declining vessel values could also result in a breach of loan covenants or trigger events of default under relevant financing agreements that require us to maintain certain loan-to-value ratios.  In such instances, if we are unable or unwilling to pledge additional collateral to offset the decline in vessel values, our lenders could accelerate our debt and foreclose on our vessels pledged as collateral for the loans.

In addition, accounting pronouncements require that we periodically review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  Measurement of the impairment charge is based on the fair value of the asset as provided by third parties as compared to its carrying value.  In this respect, management regularly reviews the carrying amount of our vessels in connection with the estimated recoverable amount for each vessel.  Such reviews may from time to time result in asset write-downs that could adversely affect our financial condition and results of operations. 

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For a discussion of a potential impairment charge that we anticipate recording in the fourth quarter of 2014, please see Note 22.

We have a significant amount of intangible assets on our balance sheet.  If our intangible assets became impaired, we may suffer a reduction in our earnings and stockholders’ equity.

Under generally accepted accounting principles, intangible assets must be tested for impairment on an annual basis or more frequently whenever events or circumstances indicate that their carrying value may not be recoverable.  If our intangible assets are determined to be impaired in the future, we may be required to record significant, non-cash charges to earnings during the period in which the impairment is determined, which would reduce our net income and subsequently reduce our stockholders’ equity.

As a holding company with no operations of our own, we rely on payments from our operating companies to meet our obligations.

As a holding company without any material assets or operations, substantially all of our income and operating cash flow is dependent upon the earnings of our subsidiaries and the distribution of those earnings to us or upon loans or other payments of funds by those subsidiaries to us.  As a result, we rely upon our subsidiaries to generate the funds necessary to meet our obligations, including the payment of amounts owed under our long-term debt, or to declare and make dividend payments to the holders of our securities.  The ability of our subsidiaries to generate sufficient cash flow from operations to allow us and them to make scheduled payments on our respective obligations will depend on their future financial performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control. Additionally, our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts owed by us, or, subject to limited exceptions for tax-sharing purposes, to make any funds available to us to repay our debt or other obligations, whether by dividends, loans or other payments. The amount of dividends that our subsidiaries may pay is restricted by the law of the jurisdiction in which they were formed.  In addition, our rights to receive assets of any subsidiary upon its liquidation, reorganization or default scenarios that continue will also be effectively subordinated to the claims of creditors of that subsidiary, including trade creditors. 

Our business and financial alternatives could be constrained by our current obligations and any future borrowings.

We are highly leveraged.  In addition to the liabilities recorded on our consolidated balance sheets as of September 30, 2014, we owe substantial amounts under our long-term operating leases.  For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Lease Obligations” in Item 2 of Part I of this report.

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Our leverage could have material adverse consequences for us, including:

•limiting our ability to access the capital markets;

•hindering our ability to adjust to changing market, industry or economic conditions;

•requiring us to dedicate a substantial portion of our cash flow from operations to the payment of debt, thereby limiting the amount of free cash flow available for other purposes, including capital expenditures, dividends, stock repurchases or growth opportunities;

•making us more vulnerable to economic or industry downturns, including interest rate increases;

•placing us at a competitive disadvantage to those of our competitors who have less indebtedness;

•increasing the risk that we will need to sell securities or assets, possibly on unfavorable terms, to meet payment obligations; or

•increasing the risk that we may not meet the financial covenants contained in our debt agreements or timely make all required debt payments.

The effect of each of these factors could be intensified if we increase our borrowings or lease commitments.

Our ability to meet our debt obligations, lease commitments and other expenses will depend upon our future performance, which will be affected by financial, business, regulatory and other factors, many of which we are unable to control.  For additional information on our indebtedness and commitments, please see Items 1 and 2 of Part I of this report.

We expect to periodically require financing to meet our debt obligations as they come due.  Due to the unstable economy and the current credit market environment, we may not be able to refinance maturing debt at terms that are as favorable as those from which we previously benefited, at terms that are acceptable to us or at all.  In connection with executing our business strategies, from time to time we evaluate the possibility of acquiring additional vessels or businesses, and we may elect to finance such acquisitions by incurring additional indebtedness.  Moreover, if we were to suffer uninsured material losses or liabilities, we could be required to borrow to fund liabilities that we could not pay with our operating cash flow. Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.  We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all.  If we are able to obtain additional financing, our credit may be adversely affected and our ability to satisfy our obligations under our current indebtedness could be adversely affected.

We cannot assure you that our access to the public debt and equity markets will remain free of disruptions.

In the future, we may consider selling debt or equity securities to raise additional funds, including to refinance a portion of our maturing debt.  Our ability to arrange any such financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.  Prevailing market conditions could be adversely affected by disruptions in domestic or overseas sovereign debt markets, contractions or limited growth in the economy or

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other similar adverse economic developments in the U.S. or abroad.  Instability in the global financial markets has from time to time resulted in periodic volatility in the capital markets.  This volatility could limit our access to the credit markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are as favorable as those from which we previously benefitted, on terms that are acceptable to us, or at all.  Any such failure to obtain additional financing could jeopardize our ability to repay, refinance or reduce our debt obligations.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business.

The ability of our counterparties to perform their obligations under their contracts with us will depend upon a number of factors that are beyond our control and may include, among other things, general economic conditions and the overall financial condition of these counterparties, especially in light of the current global financial weakness.  If our counterparties fail to honor their obligations under their agreements with us, we could sustain significant losses or a reduction in our vessel usage, both of which could have an adverse effect on our financial condition, results of operations and cash flows.

Older vessels have higher operating costs and are potentially less desirable to charterers. 

The average age of the vessels in our fleet that we own or lease, excluding our vessels engaged in U.S. coastwise trade, is approximately thirteen years (or nine years if our partially-owned Mini-Bulk Carriers built in 2010 and 2011 are included in the average).  The average age of our vessels actively engaged in U.S. coastwise trade is approximately 33 years (which reflects the longer vessel lives typically associated with vessels deployed in this trade).  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview” in Item 2 of Part I of this report.  In general, capital expenditures and other costs necessary for maintaining a vessel in good operating condition increase and become more difficult to estimate with accuracy as the age of the vessel increases. Moreover, customers generally prefer modern vessels over older vessels, which places the older vessels at a competitive disadvantage, especially in weak markets. In addition, changes in governmental regulations, compliance with classification society standards and customer requirements or competition may require us to make additional expenditures for alterations or the addition of new equipment.  In order to make such alterations or add such equipment, we may be required to take our vessels out of service, thereby reducing our revenues. Expenditures such as these may also require us to incur additional debt or raise additional capital. There can be no assurance that market or general economic conditions will enable us to replace our existing vessels with new vessels, justify the expenditures necessary to maintain our older vessels in good operating condition or enable us to operate our older vessels profitably during the remainder of their estimated useful lives.

Our Rail-Ferry Segment has a history of losses, and we can give no assurances as to its future gross voyage profitability.

As a result of a reduction in future anticipated cash flows generated by our rail-ferry service that we began operating in 2001, we recognized a non-cash impairment charge of $25.4 million in the third quarter of 2010 to reduce the carrying value of these assets to their estimated fair value. With the reduced capital cost and an increase in cargoes, this segment was profitable for the last three years.  We cannot assure that this service will be operated profitably in the future.

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Our business and operations are highly regulated, which can adversely affect our operations. 

Our business and the shipping industry in general are subject to increasingly stringent laws and regulations governing our vessels, including workers’ health and safety, and the staffing, construction, operation, insurance and transfer of our vessels.  Compliance with or the enforcement of these laws and regulations could have an adverse effect on our business, results of operations or financial condition. For example, in the event of war or national emergency, our U.S. Flag vessels are subject to requisition by the U.S. government. Although we would be entitled to compensation in the event of a requisition of our vessels, the amount and timing of such payments would be uncertain and there would be no guarantee that such amounts would be paid, or if paid, would fully satisfy lost profits associated with the requisition.

In addition, we are required by various governmental and quasi-governmental agencies to obtain and maintain certain permits, licenses and certificates with respect to our operations. In certain instances, the failure to obtain or maintain these authorizations could have an adverse effect on our business. We may also be required to periodically modify operating procedures or alter or introduce new equipment for our existing vessels to appropriately respond to changes in governmental regulation.

Our business and the operation of our vessels are subject to extensive international, national and local environmental, health and safety laws in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration.  Compliance with these laws and regulations can be costly.  Failure to comply with these laws and regulations may result in penalties, sanctions or, in certain cases, the ultimate suspension or termination of our operations. 

International, national and local laws imposing liability for oil spills are also becoming increasingly stringent.  Some impose joint, several, and in some cases, unlimited liability on owners, operators and charterers regardless of fault.  We could be held liable as an owner, operator or charterer under these laws.  In addition, under certain circumstances, we could also be held accountable under these laws for acts or omissions of our affiliates, our charterers or other parties in connection with the management or operation of our vessels.  Liability for a catastrophic spill could exceed the insurance coverage we have available, and result in our having to liquidate assets to pay claims.  In addition, we may be required to contribute to funds established by regulatory authorities for the remediation of oil pollution damage or to provide financial assurances for oil spill liability to regulatory authorities.

Regulation of our customers’ businesses could further impact our operations.

The profitability and viability of certain of our customers’ businesses are dependent upon laws and regulations governing their operations.  Laws that restrict or preclude their operations could reduce demand for certain vessels.  Specifically, currently-pending U.S. governmental proposals to enhance the regulation of carbon emissions could, over time, reduce the demand for our coal-carrying vessels.

Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspections and related procedures in countries of origin and destination.  Inspection procedures can result in the seizure of contents of our vessels, delays in the loading, offloading or delivery of cargoes, and the levying of customs, duties, fines and other penalties against us.

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It is possible that changes to inspection procedures could impose additional financial and legal obligations on us.  Furthermore, changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo impractical.  Any such changes or developments may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our failure to pass inspection by classification societies and regulators could result in one or more of our vessels being unemployable unless and until they pass inspection, resulting in a loss of revenues from such vessels for that period.

The hull and machinery of every commercial vessel must be classed by an international classification society authorized by its country of registry, as well as being subject to survey and inspection by shipping regulatory bodies. The international classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the United Nations Safety of Life at Sea Convention.

Due to the age of several of our vessels, the repairs and remediations required in connection with  classification society surveys and inspections may be extensive and require significant expenditures. Additionally, until such time as certain repairs and remediations required in connection with such surveys and inspections are completed (or if any vessel fails such a survey or inspection), the vessel may be unable to trade between ports and, therefore, would be unemployable. Any such loss of the use of a vessel could have an adverse impact on our financial condition and results of operations, and any such impact may be material.

We face periodic drydocking costs for our vessels, which can be substantial. 

Vessels must be drydocked periodically for regulatory compliance and for maintenance and repair.  Our drydocking requirements are subject to associated risks, including delay and cost overruns, lack of necessary equipment, unforeseen engineering problems, employee strikes or other work stoppages, unanticipated cost increases, inability to obtain necessary certifications and approvals and shortages of materials or skilled labor. A significant delay in drydockings could have an adverse effect on our contract commitments. The cost of repairs and renewals required at each drydock are difficult to predict with certainty and can be substantial.  Our insurance does not cover these costs.

We are subject to the risk of continuing high prices, and increasing prices, of the fuel we consume in connection with certain of our operations.

Although our customers are responsible for fuel costs with respect to a substantial portion of our operations, we have some exposure to fuel price risks under various of our other operations.  Due to the competitive nature of these other operations, we can give no assurance that we will be able to offset higher fuel costs.  Although we currently have some fuel surcharges in place, a material increase in current fuel prices that are not covered by these fuel surcharges could adversely affect our financial condition, results of operations and cash flows.

We are subject to risks associated with operating internationally. 

Our non-domestic operations are subject to varying degrees of regulation in each of the foreign jurisdictions in which we provide services. Local laws and regulations, and their interpretation and enforcement, differ significantly among those jurisdictions,

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and can change significantly over time. Future regulatory, judicial and legislative changes or interpretations may have a material adverse effect on our ability to deliver services in foreign jurisdictions.

In addition to these international regulatory risks, some of the other risks inherent in conducting business internationally include:

•licensing, currency, political or other business restrictions or requirements;

•economic, political and social instability, with the attendant risks of extortion or civil unrest;

•potential vessel seizure, terrorist attacks, piracy, kidnapping, the expropriation of assets and other governmental actions, many of which are not covered by our insurance;

•currency restrictions and exchange rate fluctuations;

•potential submission to the jurisdiction of a foreign court or arbitration panel;

•pandemics or epidemics that disrupt worldwide trade or the movement of vessels;

•import and export restrictions;

•longer payment cycles and problems collecting accounts receivable,

•additional U.S. and other regulation of non-domestic operations, including regulation under the Foreign Corrupt Practices Act (the “FCPA”) as well as other anti-corruption laws;

•the inability to enforce our contract rights, either due to under-developed legal systems or government actions that result in a deprivation of contract rights; and

•the imposition of unanticipated or increased taxes, increased environmental and safety regulations or other forms of public and governmental regulation that increase our operating expenses. 

Many of these risks are beyond our control, and we cannot predict the nature or the likelihood of the occurrence or corresponding effect of any such events, each of which could have an adverse effect on our financial condition and results of operations.

Moreover, in order to effectively compete in certain foreign jurisdictions, it is frequently necessary or required to establish joint ventures, strategic alliances or vessel revenue sharing agreements with other shipping companies or local operators, partners or agents.  Reliance on local operators, partners or agents could expose us to the risk of being unable to control the scope or quality of our overseas services or products, or being held liable under the FCPA or other anti-corruption laws for actions taken by our strategic or local partners or agents even though these partners or agents may not themselves be subject to the FCPA or other applicable anti-corruption laws.  Any determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on our business, results of operations, reputation or prospects.

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Our vessels could be seized by maritime claimants, which could result in a significant loss of earnings and cash flow for the related off-hire period.

Under general maritime law in many jurisdictions, crew members, vessel mortgagees, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts or claims for damages.  In many jurisdictions, a maritime lienholder may enforce its lien by either arresting or attaching a vessel through foreclosure proceedings.  The arrest or attachment of one or more of our vessels could result in a significant loss of earnings and cash flow during the detainment period.

In some jurisdictions, under the extended “sister ship” theory of liability, a claimant may arrest not only the vessel with respect to which the claimant’s maritime lien has arisen, but also any associated vessel under common ownership or control.  Consequently, a claim may be asserted against us or any of our subsidiaries or our vessels for the liability of one or more of the other vessels we own.  While we have insurance coverage for these types of claims, we cannot guarantee it will cover all of our potential exposure.

If we are unable to attract and retain skilled crew members, our reputation and ability to operate safely and efficiently may be harmed.

Our continued success depends in significant part on the continued services of the officers and seamen who operate our vessels.  The market for qualified, experienced officers and seamen is subject to adequate labor availability.  We cannot assure you that we will continue to be successful in our efforts to recruit and retain properly skilled personnel at commercially reasonable salaries.  Any failure to do so could adversely affect our ability to operate cost-effectively.

A substantial number of our shipboard employees are unionized. In the event of a strike or other work stoppage, our business and operations may be adversely affected. 

As of September 30, 2014, all of our U.S. shipboard personnel were unionized employees covered by collective bargaining agreements. 

Given the prevalence of maritime trade unions and their corresponding influence over its members, the shipping industry is vulnerable to work stoppages and other potentially disruptive actions by employees. We may also have difficulty successfully negotiating renewals to our collective bargaining agreements with these unions or face resistance to any future efforts to place restraints on wages, reduce labor costs or moderate work practices. Any of these events may result in strikes, work disruptions and have other potentially adverse consequences. While we have experienced no strikes, work stoppages or other significant labor problems during the last ten years, we cannot assure that such events will not occur in the future or be material in nature.  In the event we experience one or more strikes, work stoppages or other labor problems, our business and, in turn, our results of operations may be adversely affected.

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Increases in costs for pension and healthcare benefits for our active and retired employees may reduce our profitability and liquidity and increase our funding commitments.

Our costs of maintaining our pension, healthcare and other plans, and the future funding requirements for these plans, are affected by several factors, most of which are outside our control, including:

•decreases in investment returns on funds held by our pension and other benefit plan trusts;

•changes in prevailing interest rates and the discount rate used to calculate pension and other post-retirement expenses;

•increases in healthcare costs generally or claims submitted under our healthcare plans specifically;

•the continuing implementation of the Patient Protection and Affordable Care Act, and the related reconciliation act and regulations promulgated thereunder;

•increases in the number of retirees who elect to receive lump sum benefit payments;

•changes in plan benefits; and

•changes in funding laws or regulations.

Domestically, we participate in and make periodic contributions to various multi-employer pension plans under union and industry-wide agreements that generally provide defined benefits to employees covered by collective bargaining agreements.  Funding requirements for benefit obligations of multi-employer pension plans are subject to certain regulatory requirements and we may be required to make cash contributions which may be material to one or more of these plans to satisfy certain underfunded benefit obligations. In addition, if a multi-employer plan fails to satisfy the minimum funding requirements, the Internal Revenue Service may impose certain penalties and taxes.

Absent an applicable exemption, a contributor to a multi-employer plan is liable, upon termination or withdrawal from the plan, for its proportionate share of the plan’s underfunded vested liability.  Based on the limited information available from plan administrators, which we cannot independently validate, we believe that our portion of the contingent liability in the case of a full withdrawal or termination may be material to our financial position and results of operations. Moreover, in the event that any other contributing employer withdraws from any plan that is underfunded, and such employer (or any member in its controlled group) cannot satisfy its obligations under the plan at the time of withdrawal, then we, along with the other remaining contributing employers, would be liable for our proportionate share of such plan’s unfunded vested benefits.

Delays or cost overruns in building new vessels (including the failure to deliver new vessels) could harm us.

Building new vessels is subject to risks of delay (including the failure to timely deliver new vessels to customers) or cost overruns caused by one or more of the following:

•financial difficulties of the shipyard building a vessel, including bankruptcy;

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•unforeseen quality or engineering problems;

•work stoppages;

•weather interference;

•unanticipated cost increases;

•delays in receipt of necessary materials or equipment;

•changes to design specifications; and

•inability to obtain the requisite permits, approvals or certifications from governmental authorities and the applicable classification society upon completion of work.

Significant delays, cost overruns and failure to timely deliver new vessels we have committed to service our customers could adversely affect us in several ways, including delaying the implementation of our business strategies or materially increasing our cost of servicing our commitments to our customers.

For a discussion of a recent termination of a shipbuilding contract, please see Note 8.

Some of our employees are covered by laws limiting our protection from exposure to certain claims.

Some of our employees are covered by several maritime laws, statutes and regulations which circumvent and nullify certain liability limits established by state workers’ compensation laws, including provisions of the Jones Act, the Death on the High Seas Act, and the Seamen’s Wage Act. We are not generally protected by the limits imposed by state workers’ compensation statutes for these particular employees, and as a result, our exposure for claims asserted by these employees may be greater than would otherwise be the case.

We are subject to the control of our principal stockholders. 

As of March 1, 2014, two of our current directors, Niels M. Johnsen and Erik L. Johnsen, and their respective family members and affiliated entities, beneficially owned an aggregate of 20.8% of our common stock.  Niels M. Johnsen and Erik L. Johnsen are also executive officers of the Company, and their respective fathers were formerly executive officers and directors.  As a result, the Johnsen family may have the ability to exert significant influence over our affairs and management, including the election of directors, delaying or opposing a change of control transaction, and effecting other corporate actions requiring stockholder approval.

Because some of our expenses are incurred in foreign currencies, we are exposed to exchange rate risks.

While we incur most of our expenses in U.S. dollars, we have in the past incurred operating expenses in other currencies, most notably the Mexican Peso and Indonesian Rupiah. Declines in the value of the U.S. dollar relative to the currencies in these

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jurisdictions, or other currencies in which we may in the future incur expenses, would increase the U.S. dollar cost of paying these expenses and thus would adversely affect our results of operations.

We selectively enter into hedging derivative contracts, which can result in higher than market interest rates and charges against our income.

In the ordinary course of our business, we are exposed to foreign currency, interest rate and commodity price risks.  From time to time, we utilize derivative financial instruments including interest rate swap agreements and forward exchange contracts, and in the past we have also utilized commodity swap agreements to manage certain of these exposures.  We hedge only firm commitments or anticipated transactions and do not use derivatives for speculation.  We neither hold nor issue financial instruments for trading purposes.  Nevertheless, even though our hedging strategies are designed to manage our exposure to interest rate fluctuations, entering into swaps and forward exchange contracts is inherently risky.  The derivative strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs or charges against our income.  For further information, see “Quantitative and Qualitative Information About Market Risk” in Item 3 of Part I of this report.

Loss of our senior management or other key personnel could have an adverse effect on our business, financial condition and results of operations.

Our future success will depend, in significant part, upon the continued services of our senior management team and other key personnel, especially those of our Chief Executive Officer, President, and Chief Financial Officer, who have substantial experience in the shipping industry and over 114 years of collective experience with us. We believe that the experience of our senior management team is a vital component to maintain long-term relationships with our customers.  Similarly, we believe UOS’s senior management team will be integral to maintaining long-term relationships with UOS’s key customers.  The loss of the services of any of these individuals could adversely affect our future operating results, and we may have to incur significant costs to find sufficient replacements for them, if available.

We are susceptible to severe weather and natural disasters.

Given the nature and scope of our operations, we are constantly vulnerable to disruption as a result of adverse weather conditions, including hurricanes, typhoons, earthquakes and other natural disasters. These types of events may, among other things:

•hinder our ability to effectively and timely provide scheduled service to our customers whether due to damage to our properties, to our customers’ operations, or to dock or other transportation facilities;

•interfere with our terminal operations;

•damage our vessels and equipment; or

•result in injury or death to our employees.

Any of these factors, especially to the extent not fully covered by insurance, could have an adverse effect on our business, financial condition and results of operation.

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We are exposed to various tax risks.

As a taxpayer, we are subject to frequent and regular audits and examinations by the Internal Revenue Service, as well as state and local tax authorities.  Because the ultimate outcomes of these matters are uncertain, we can give no assurance as to whether an adverse result from one or more of them will have a material effect on our financial results.

We believe that we should not be subject to tax under the laws of any country other than the United States or Singapore in which we conduct activities or in which our customers are located.  However, our belief is based on our understanding of the tax laws of those countries, and our tax position is subject to review and possible challenge by taxing authorities and to possible changes in law or interpretation.  We cannot determine in advance the extent to which certain jurisdictions may require us to pay tax or to make payments in lieu of tax.  In addition, payments due to us from our customers could potentially be subject to tax claims.

For the next several years, we expect most of our federal taxable income to be offset by federal net operating losses, or NOLs.  The laws governing our ability to utilize these NOLs are complex.  We cannot assure you that we will continue to be able to utilize our NOLs as anticipated, or that these NOLs will not be depleted sooner than expected.  If and when our NOLs are fully utilized, we expect that the amount of our cash flow dedicated to the payment of federal taxes will increase substantially.

Our business is subject to potential security breaches and attacks.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, to manage or support a variety of our business operations, transactions and processes, and to maintain various records, which may include personally identifiable information of customers, employees or other third parties.  We make significant efforts to maintain the security and integrity of these types of information and systems (and maintain contingency plans in the event of security breaches or system disruptions).  Nonetheless, we cannot assure you that our security efforts and measures will prevent unauthorized access to our systems, loss or destruction of data, account takeovers, or other forms of cyber-attacks or similar events, whether caused by mechanical failures, human error, fraud, malice, sabotage or otherwise.  The frequency, scope and sophistication of cyber-attacks continue to grow, which increases the possibility that our security measures will be unable to prevent our systems’ improper functioning or the improper disclosure of personally identifiable information.  Any failure to maintain the proper functioning, security and availability of our information systems could interrupt our operations, damage our reputation, or subject us to claims, any of which could materially and adversely affect us.

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We are exposed to risks arising out of recent legislation affecting U.S. public companies, including risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and related regulations implemented thereunder, have increased legal and financial compliance costs and made some activities more time consuming.  Any future failure to successfully or timely complete annual assessments of our internal controls required by Section 404 of the Sarbanes-Oxley Act could subject us to sanctions or investigation by regulatory authorities, which could in turn adversely affect our financial results or investors’ confidence in us.  If we fail to maintain effective controls and procedures, we may be unable to provide financial information in a timely and reliable manner, which could in certain instances limit our ability to borrow or raise capital.

If conditions or assumptions differ from the judgments, assumptions or estimates used in our critical accounting policies, the accuracy of our financial statements and related disclosures could be affected.

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.  For a discussion of our critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013.  If future events or assumptions differ significantly from the judgments, assumptions and estimates in our critical accounting policies, these events or assumptions could have a material impact on our consolidated financial statements and related disclosures.

Provisions in our organizational documents would make it difficult for a third party to acquire us, even if such a transaction is beneficial to our stockholders.

Our organizational documents:

•provide for blank check preferred stock;

•prevent stockholders from calling special stockholder meetings or voting cumulatively;

•impose certain foreign ownership limits with respect to our stock;

•include various other provisions that could impede, delay or prevent certain takeovers or change of control transactions.

In addition, as noted under “– Risk Factors Related To Our Business – We are subject to the control of our principal stockholders,” the Johnsen family beneficially owns a substantial portion of our common stock.  These provisions and circumstances could deter a third party from tendering for the purchase of some or all of our shares. These provisions and circumstances may have the effect of impeding, delaying or preventing changes of control of the ownership and management of ISH, even if such transactions would have significant benefits to our stockholders.

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Future acquisitions of vessels or businesses by us would subject us to additional business, operating and industry risks, the impact of which cannot presently be evaluated, and could adversely impact our capital structure.

From time to time in the future we may pursue other acquisition opportunities in an effort to implement our business strategies.  Acquisitions may be of individual or groups of vessels or of businesses.  To the extent we acquire a business that is financially unstable or is otherwise subject to a high level of risk, we may be affected by the currently unascertainable risks of that business.  Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular business or assets that we may acquire.  In addition, the financing of any future acquisition completed by us could adversely impact our capital structure as any such financing would likely include the issuance of additional securities or the borrowing of additional funds.  Except as required by law or the rules of any securities exchange on which our securities might be listed at the time we seek to consummate an acquisition, we do not expect to ask our stockholders to vote on any proposed acquisition.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January25, 2008, the Company’s Board of Directors approved a share repurchase program for up to a total of 1,000,000 shares of the Company’s common stock. We expect that any share repurchases under this program will be made from time to time for cash in open market transactions at prevailing market prices. The timing and amount of any purchases under the program will be determined by management based upon market conditions and other factors. In 2008, we repurchased 491,572 shares of our common stock for $11.5 million.Thereafter, we suspended repurchases until the second quarter of 2010, when we repurchased 223,051 shares of our common stock for $5.2 million.Unless and until the Board otherwise provides, this authorization will remain open indefinitely, or until we reach the 1,000,000 share limit.

This table provides certain information with respect to the Company’s purchase of shares of its common stock during the third quarter of 2014:

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plan	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plan
July 1, 2014 - July 31, 2014	-	-	-	285,377
August 1, 2014 - August 31, 2014	-	-	-	285,377
September 1, 2014 - September 30, 2014	-	-	-	285,377

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ITEM 6 – EXHIBITS

(2.1)   Purchase Agreement, dated as of October 9, 2012, executed between International Shipholding Corporation and United Maritime Group, LLC (filed with the Securities and Exchange Commission as Exhibit 2.1 to the Registrant's Form 8-K dated October 11, 2012 and incorporated herein by reference)

(3.1)   Restated Certificate of Incorporation of the Registrant, as amended through May 19, 2010 (filed with the Securities and Exchange Commission as Exhibit 3.1 to the Registrant's Form 10-Q for the quarterly period ended June 30, 2010 and incorporated herein by reference)

(3.2)   By-Laws of the Registrant as amended through October 28, 2009 (filed with the Securities and Exchange Commission as Exhibit 3.2 to the Registrant's Form Current Report on Form 8-K dated November 2, 2009 and incorporated herein by reference)

(4.1)   Specimen of Common Stock Certificate (filed as an exhibit to the Registrant's Form 8-A filed with the Securities and Exchange Commission on April 25, 1980 and incorporated herein by reference)

(4.2)   Certificate of Designations, Preferences and Rights of 9.50% Series A Cumulative Redeemable Perpetual Preferred Stock (filed with the Securities and Exchange Commission as Exhibit 3.3 to the Company’s Form 8-A dated February 20, 2013 and incorporated herein by reference).

(4.3)   Certificate of Designations, Preferences and Rights of 9.0% Series B Cumulative Redeemable Perpetual Preferred Stock (filed with the Securities and Exchange Commission as Exhibit 3.3 to the Company’s Form 8-A dated July 25, 2013 and incorporated herein by reference).

(10.1)   Credit Agreement, dated as of August 2, 2010, by and among East Gulf Shipholding, Inc., as borrower, the Registrant, as guarantor, the banks and financial institutions listed therein, as lenders, and ING Bank N.V., London Branch, as facility agent and security trustee. (filed with the Securities and Exchange Commission as Exhibit 10.12 to the Registrant’s Form 10-Q/A dated December 23, 2010 and incorporated herein by reference) (On December 28, 2010, the Securities and Exchange Commission granted confidential treatment with respect to certain portions of this exhibit.)

(10.2)  Second Amendment to the Credit Agreement, dated November 4, 2014, to the Credit Agreement, dated as of August 2, 2010, by and among East Gulf Shipholding, Inc., as borrower, the Registrant, as guarantor, the banks and financial institutions listed therein, as lenders, and ING Bank N.V., London Branch, as facility agent and security trustee*

(10.3)   Credit Agreement, dated as of January 23, 2008, by and among East Gulf Shipholding, Inc., as borrower, the Registrant, as guarantor, the banks and financial institutions party thereto, as lenders, DNB Bank ASA, as facility agent and as security trustee. (filed with the Securities and Exchange Commission as Exhibit 10.13 to the Registrant’s Form 10-K for the annual period ended December 31, 2007 and incorporated herein by reference).

(10.4)   Seventh Amendment to the Credit Agreement, dated October 31, 2014, to the Credit Agreement, dated as of January 23, 2008, by and among East Gulf Shipholding, Inc., as borrower, the Registrant, as guarantor, the banks and financial institutions party thereto, as lenders, DNB Bank ASA, as facility agent and as security trustee*

(10.5)   Credit Agreement, dated as of June 20, 2011, by and among Dry Bulk Australia Ltd. and Dry Bulk Americas Ltd., as joint and several borrowers, the Registrant, as guarantor, and ING Bank N.V. London branch, as lender, facility agent and security trustee (filed with the Securities and Exchange Commission as Exhibit 10.8 to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2011 and incorporated herein by reference).

84

(10.6)  Second Amendment to the Credit Agreement, dated November 4, 2014, to the Credit Agreement, dated as of June 20, 2011, by and among Dry Bulk Australia Ltd. and Dry Bulk Americas Ltd., as joint and several borrowers, the Registrant, as guarantor, and ING Bank N.V. London branch, as lender, facility agent and security trustee*

(10.7)   Credit Agreement, dated as of June 29, 2011, by and among LCI Shipholdings, Inc. and Waterman Steamship Corporation, as joint and several borrowers, the Registrant, as guarantor, DNB Bank ASA and HSH Nordbank AG, New York Branch, as lenders, DNB Bank ASA, as bookrunner, facility agent and security trustee and DNB Bank ASA and HSH Nordbank AG, New York Branch, as mandated lead arrangers (filed with the Securities and Exchange Commission as Exhibit 10.9 to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2011 and incorporated herein by reference)

(10.8)   Credit Agreement, dated as of September 24, 2013, by and among International Shipholding Corporation and thirteen of its subsidiaries as borrowers and Regions Bank as Administrative Agent and Collateral Agent and Regions Capital Markets, a division of Regions Bank, as Lead Arranger and Sole Book Manager as the lenders (filed with the Securities and Exchange Commission as Exhibit 10.6 to the Registrant’s form 10-Q for the quarterly period ended September 30, 2013 and incorporated herein by reference)

(10.9)   First Amendment to Credit Agreement and Consent Agreement, dated as of March 31, 2014, to the Credit Agreement, dated as of September 24, 2013, by and among International Shipholding Corporation and thirteen of its subsidiaries as borrowers and Regions Bank as Administrative Agent and Collateral Agent and Regions Capital Markets, a division of Regions Bank, as Lead Arranger and Sole Book Manager as the lenders (filed with the Securities and Exchange Commission as Exhibit 10.7 in Registrant’s Form 10-Q for the quarterly period ended March 21, 2014 and incorporated herein by reference) (The Securities and Exchange Commission has granted confidential treatment with respect to certain portions of this exhibit)

(10.10)  Second Amendment to Credit Agreement and Consent Agreement, dated as of October 27, 2014, to the Credit Agreement, dated as of September 24, 2013, by and among International Shipholding Corporation and thirteen of its subsidiaries as borrowers and Regions Bank as Administrative Agent and Collateral Agent and Regions Capital Markets, a division of Regions Bank, as Lead Arranger and Sole Book Manager as the lenders*

(10.11)  Credit Agreement, dated as of August 26, 2014, by and among LCI Shipholdings, Inc., a non-resident corporation organized under the laws of the Republic of the Marshall Islands, as Borrower, International Shipholding Corporation, as Guarantor, and RBS Asset Finance, Inc., a New York corporation, as Lender*

(10.12)  First Amendment to the Credit Agreement, dated November 5, 2014, to the  Credit Agreement, dated as of August 26, 2014, by and among LCI Shipholdings, Inc., a non-resident corporation organized under the laws of the Republic of the Marshall Islands, as Borrower, International Shipholding Corporation, as Guarantor, and RBS Asset Finance, Inc., a New York corporation, as Lender*

(10.13)  Credit Agreement, dated as of August 26, 2014, by and among Waterman Steamship Corporation, as Borrower, DVB Bank SE, as Facility Agent and Security Trustee, and the Banks and Financial Institutions from time to time party thereto*

(10.14)  First Amendment to the Credit Agreement, dated October 28, 2014, to the Credit Agreement, dated as of August 26, 2014, by and among Waterman Steamship Corporation, as Borrower, DVB Bank SE, as Facility Agent and Security Trustee, and the Banks and Financial Institutions from time to time party thereto*

(10.15)  International Shipholding Corporation 2011 Stock Incentive Plan (filed with the Securities and Exchange Commission as Exhibit 99.2 to the Registrant's Current Report dated April 27, 2011 on Form 8-K filed on April 29, 2011 and incorporated herein by reference)

85

(10.16)  Form of Incentive Agreement dated January 28, 2014 under the International Shipholding Corporation 2011 Stock Incentive Plan (filed with the Securities and Exchange Commission as Exhibit 10.9 to the Registrant’s Form 10-Q for quarterly period ended March 31, 2014 and incorporated herein by reference)

(10.17)   Change of Control Agreement, by and between the Registrant and Niels M. Johnsen, effective as of August 6, 2008 (filed with the Securities and Exchange Commission as Exhibit 10.14 to the Registrant’s Form 10-Q for quarterly period ended June 30, 2008 and incorporated herein by reference)

(10.18)   Change of Control Agreement, by and between the Registrant and Erik L. Johnsen, effective as of August 6, 2008 (filed with the Securities and Exchange Commission as Exhibit 10.15 to the Registrant’s Form 10-Q for quarterly period ended June 30, 2008 and incorporated herein by reference)

(10.19)   Change of Control Agreement, by and between the Registrant and Manuel G. Estrada, effective as of August 6, 2008 (filed with the Securities and Exchange Commission as Exhibit 10.16 to the Registrant’s Form 10-Q for quarterly period ended June 30, 2008 and incorporated herein by reference)

(10.20)   Form of Indemnification Agreement, by and between the Registrant and members of the Board of Directors, effective as of November 11, 2009 (filed with the Securities and Exchange Commission as Exhibit 10.20 to the Registrant’s Form 10-K for the annual period ended December 31, 2009 and incorporated herein by reference)

(10.21)   Description of Director Compensation Program (filed with the Securities and Exchange Commission as Exhibit 10.15 to the Registrant’s Form 10-K for the year ended December 31, 2013 and incorporated herein by reference)

(31.1)   Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

(31.2)   Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

(32.1)   Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

(32.2)   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

*filed with this report

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INTERNATIONAL SHIPHOLDING CORPORATION

/s/ Manuel G. Estrada

_____________________________________________

Manuel G. Estrada

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

Date:   November 7, 2014

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EX-10.10

SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT AGREEMENT -

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT AGREEMENT (the "Agreement") dated as of October 27, 2014 is entered into among INTERNATIONAL SHIPHOLDING CORPORATION, a Delaware corporation ("ISC"), ENTERPRISE SHIP COMPANY,INC., a Delaware corporation ("Enterprise"), SULPHUR CARRIERS, INC., a Delaware corporation ("Sulphur Carriers"), CG RAILWAY, INC., a Delaware corporation ("CG Railway"), CENTRAL GULF LINES, INC., a Delaware corporation ("Central Gulf"), WATERMAN STEAMSI{EP CORPORATION, a New York corporation ("Waterman"), COASTAL CARRIERS, INC., a Delaware corporation ("Coastal"), N.W. JOHNSEN & CO., INC., a New York corporation ("NWT"), LMS SHJPMANAGEMENT, INC., a Louisiana corporation ("LMS"), U.S. UNITED OCEAN SERVICES, LLC, a Florida limited liability company ("UOS"), MARY ANN HUDSON, LLC, a Delaware limited liability company ("MAH"), SHEILA MCDEVI1-1, LLC, a Delaware limited liability company ("SAM"), TOWER, LLC, an Alabama limited liability company ("Tower"), FRASCATI SHOPS, INC., an Alabama corporation ("Frascati"; ISC, Enterprise, Sulphur Carriers, CG Railway, Central Gulf, Waterman, Coastal, NWJ, LMS, UOS, MAH, SAM, Tower and Frascati, collectively, the "Borrowers"), the Lenders party hereto and REGIONS BANK, as administrative agent (in such capacity, "Administrative Agent") andcollateral agent (in such capacity, "Collateral Agent"). All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrowers, the Lenders and the Administrative Agent entered into that certain Credit Agreement dated as of September 24, 2013 (as amended or modified from time to time, the "Credit Agreement"); and

WHEREAS, the Borrowers have requested that the Lenders amend the Credit Agreement as set forth below.

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

1.Consent. The Required Lenders hereby consent (i) to the sale of the NADIA RAMIL(tug) vessel and PEGGY PALMER (bulker) vessel (the "Released Vessels" ) notwithstanding Section 8.9of the Credit Agreement, for an aggregate sale price not less than $6,500,000, and (ii) contemporaneouslywith such sale, to the release of the Released Vessels as Collateral; provided that, (x) at the time of such sale and release, no Default or Event of Default shall have occurred and be continuing, (y) after giving effect to such sale and release, the Borrowers shall be in compliance with the financial covenant in Section 8.8(a)(vi) of the Credit Agreement and (z) the Borrowers shall comply with Section 2.11 (c)(ii) of the Credit Agreement with respect to the Net Cash Proceeds received by the Borrowers with respect to such Asset Sale (including the reinvestment rights provided therein).

Except as expressly provided herein, the above consents shall not modify or affect the Loan Parties' obligations to comply fully with the terms of Sections 8.9 of the Credit Agreement or any other duty, term, condition or covenant contained in the Credit Agreement or any other Credit Document in the future. This Agreement is limited solely to the matters expressly provided herein, and nothing contained in this Agreement shall be deemed to constitute a waiver of Section 8.9 of the Credit Agreement with

respect to any matter or any other rights or remedies the Administrative Agent or any Lender may have under the Credit Agreement or any other Credit Documents or under applicable law.

The Administrative Agent, at the Borrowers' expense, will promptly deliver to Borrowers or to such other party as the Borrowers may direct, additional documents in form and substance acceptable to the Administrative Agent to effectuate the release of the Administrative Agent's liens on the Released Vessels in accordance with the terms and conditions of this Agreement, the Credit Agreement and the other Credit Documents, and the Required Lenders hereby consent to such delivery.

2.Amendments to Credit Agreement.

(a) The definition of Consolidated EBITDA in Section 1.01 of the Credit Agreement ishereby amended in its entirety as follows:

"Consolidated EBITDA" means, for any period, with respect to the Company and its Subsidiaries, the sum of (without duplication) (a) Consolidated Net Income; (b) all Consolidated Interest Expense of the Company and its Subsidiaries; (c) income taxes of the Company and its Subsidiaries; and (d) depreciation and amortization of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP for such period; provided that if any Subsidiary is not wholly-owned by the Company, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (i) the amount of Consolidated Net Income attributable to such Subsidiary multiplied by (ii) the percentage ownership interest in the income of such Subsidiary not owned by the Company on the last day of such period; provided, further, that, beginning with the period of four Fiscal Quarters ending September 30, 2014, all non-cash gains and/or losses from dispositions of any assets allowed under the Credit Agreement or consented to by the Required Lenders shall be excluded in the calculation of Consolidated EBITDA.

(b) Section 8.8(a)(i) of the Credit Agreement is amended and restated in its entirety as follows:

(i)Maximum Consolidated Leverage Ratio. Maintain a ConsolidatedLeverage Ratio not greater than (i) 4.50:1.00, through the Fiscal Quarter ending June 30, 2014, (ii) 5.00:1.00 beginning with the Fiscal Quarter ending September 30, 2014 through the Fiscal Quarter ending December 31, 2015, (iii) 4.75:1.00 for the Fiscal Quarter ending March 31, 2016, (iv) 4.50:1.00 beginning with the Fiscal Quarter ending June 30, 2016 through the Fiscal Quarter ending September 30, 2016, and (v) 4.25:1.00 thereafter, measured at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

(c) Section 8.8(a)(v) of the Credit Agreement is amended and restated in its entirety as follows:

(v)Minimum Consolidated Fixed Charge Coverage Ratio. Maintain aConsolidated Fixed Charge Coverage Ratio of at least (i) 1.15:1.00, throughthe

Fiscal Quarter ending June 30, 2014, (ii) 1.10:1.00, beginning with .the Fiscal Quarter ending September 30, 2014 through the Fiscal Quarter ending December 31, 2014, (iii) 1.15:1.00, beginning with the Fiscal Quarter ending March 31, 2015 through December 31, 2015, (iv) 1.20, beginning with the Fiscal Quarter ending March 31, 2016 through June 30, 2016 and (v) 1.25:1.00, thereafter, measured at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

3.Conditions Precedent. This Agreement shall be effective upon satisfaction of thefollowing conditions precedent:

(a) the Administrative Agent shall have received counterparts of this Agreement duly executed by the Borrowers, the Required Lenders and the Administrative Agent;

(b) the Company shall have paid to the Administrative Agent, for the account of each Lender executing this Agreement, an amendment fee in an amount equal to 0.10% multiplied by the sum of the Revolving Commitment and outstanding principal amount of the Term Loan A of each such Lender on the date hereof; and

(c) the Administrative Agent shall have received payment of all fees, charges and disbursements of counsel to the Administrative Agent incurred in connection with the preparation, negotiation and documentation of this Agreement.

4.Representations of the Borrowers. Each of the Borrowers represents and warrants to theAdministrative Agent and the Lenders as follows:

(a) It has taken all necessary action to authorize the execution, delivery and performance of this Agreement and any other documents delivered by it in connection herewith.

(b) This Agreement has been duly executed and delivered by it and constitutes it's legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (1) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by it of this Agreement.

(d) The execution and delivery of this Agreement or any other document delivered by it in connection herewith does not (i) violate, contravene or conflict with any provision of its organization &ailments or (ii) materially violate, contravene or conflict with any laws applicable to it.

(e) After giving effect to this Agreement, (i) the representations and warranties of the Borrowers set forth in the Credit Agreement and in each other Credit Document are true, accurate and complete in all material respects on and as of the date hereof to the same extent as though made on and as of such date except to the extent such representations and warranties

specifically relate to an earlier date and (ii) no event has occurred and is continuing which constitutes a Default or Event of Default.

5.Miscellaneous.

(a) The Credit Agreement, as modified hereby, and the obligations of the Borrowers thereunder and under the other Credit Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Agreement shall constitute a Credit Document.

(b) Each Borrower (a) acknowledges and consents to all of the terms and conditions of this Agreement, (b) affirms all of its obligations under the Credit Documents as modified hereby and (c) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Credit Documents except as expressly set forth herein.

(c) This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

(d) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[Signature pages follow}

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BORROWERS:

INTERNATIONAL SHIPHOLDING CORPORATION

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

ENTERPRISE SHIP COMPANY, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

SULPHUR CARRIERS, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

CG RAILWAY, INC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

CENTRAL GULF LINES, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

WATERMAN STEAMSHIP CORPORATION

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

COASTAL CARRIERS, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

N.W. JOHNSEN & CO., INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

LMS SHIPMANAGEMENT, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

U.S. UNITED OCEAN SERVICES, LLC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

MARY ANN HUDSON, LLC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

SHEILA MCDEVITT, LLC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

TOWER, LLC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

FRASCATI SHOPS, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P – Treasurer

LENDERS:

WHITNEY BANK,

as Lender

By: /s/ Philip E. Gordillo

Name: Philip E. Gordillo

Title: Senior Vice President

CAPITAL ONE BANK, N.A.,

as Lender

By: /s/ Al Krupog

Name: Al Krupog

Title: SVP

ADMINISTRATIVE AGENT

AND COLLATERAL AGENT

REGIONS BANK,

as Administrative Agent and Collateral Agent

By: /s/ Edward Midyett

Name: Edward Midyett

Title: Senior Vice President

EX-10.11

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of August 25, 2014, is entered into by and among LCI SHIPHOLDINGS, INC., a non-resident corporation organized under the laws of the Republic of the Marshall Islands, with offices at 11 North Water St., Suite 18290, Mobile, Alabama 36602 ("Borrower"), INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized under the laws of Delaware, with offices at 11 North Water St., Suite 18290, Mobile, Alabama 36602 (together with its successors and permitted assigns, "Guarantor"), and RBS ASSET FINANCE, INC., a New York corporation, with offices at 71 South Wacker Drive, 29th Floor, Mailstop IH2935, Chicago, Illinois 60606 (together with its successors and assigns, "Lender").

RECITALS:

Borrower has requested Lender to open a term loan credit facility in favor of Borrower with available credit thereunder in a principal amount  of up to TWENTY-THREE MILLION FORTY THOUSAND AND N0/100 Dollars ($23,040,000.00) in order to refinance certain indebtedness of Borrower under the DNB Credit Agreement (as defined below), which debt is secured by a preferred mortgage lien and security interest against the Marshall Islands-flagged vessel, GREEN DALE, Official Number 5236, IMO Number 9181376 (further described and defined below as the "Vessel") and to fund a portion of the acquisition price payable by Waterman Steamship Corporation, an Affiliate (as defined below) of Borrower and of Guarantor, in connection with the early termination of a bareboat charter of a sister ship of the Vessel. Guarantor is an Affiliate of Borrower, and the loan to Borrower contemplated by this Agreement will provide both direct and indirect financial and business benefits to Guarantor. Lender is willing to make the loan to Borrower upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE 1

Definitions

Section 1.1 meanings:Definitions. As used in this Agreement, the following terms have the following

"Administrative Agent" means Regions Bank, or any successor thereto, who serves as the Administrative Agent under the Senior Credit Agreement.

"Advance" means an advance of funds by Lender to Borrower pursuant to this Agreement.

"Advance Request" means a certificate, properly completed and signed by Borrower in a form acceptable to Lender, requesting an Advance. A request for an Advance shall constitute a certification by Borrower that (i) all representations and warranties of Borrower and Guarantor (other than those representations and warranties which are limited in application to a specific date) are true and correct as if made on the date of such certificate; (ii) no Default or Event of Default hereunder or under any Loan Document has occurred and is continuing, and no Default or

LOAN AGREEMENT – Page 1

Event of Default will result from the Advance requested; and (iii) all the conditions to the Advance as set forth herein have been satisfied, met and complied with.

"Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, the Person specified; provided, however, that in no event shall Lender be deemed an Affiliate of Borrower or Guarantor.

"Aggregate Revolving Commitments"means,at any time of determination, the Revolving Commitments of all the Lenders who are parties to the Senior Credit Agreement as then in force under such agreement.

"Approved Time Charter" means that certain Time Charter of the Vessel dated August 5, 1999 between Borrower and Nippon Yusen Kaisha, a stock company organized under the laws of Japan, as such agreement has been and may be further amended, modified, renewed, extended, or supplemented from time to time.

"Assignment of Earnings" means that certain "Assignment of Earnings, Charter Parties and Requisition Compensation" to be executed by Borrower in favor of, and in form and substance satisfactory to, Lender (and all amendments, modifications, renewals or supplements thereto), pursuant to which Lender shall be granted a security interest in and collateral assignment of any and all existing and future charters (whether on a bareboat, demise, time or voyage basis), contracts of affreightment or management agreements involving the Vessel, including the Approved Time Charter, together with: (i) all benefits, rights and remedies thereunder, including without limitation all charter hire payments, freights, subfreights and other monies now or hereafter due or to become due pursuant to such agreements; and (ii) all accounts, salvage or requisition awards or recoveries, recoveries in general average, general intangibles (including payment intangibles), and any supporting obligations, including guaranties, whether now owned or hereafter acquired, related to such agreements, or otherwise arising out of the use or operation of the Vessel; as well as (iii) all proceeds of any of the foregoing.

"Assignment of Insurance" means that certain "Assignment of Insurances" to be executed by Borrower in favor of Lender, in form and substance satisfactory to Lender, pursuant to which Lender will be collaterally assigned and granted a security interest in all of Borrower's right, title and interest in and to all insurances procured by Borrower with respect to the Vessel, including all amounts due from underwriters under any such insurance as payment of losses, or as return premiums or otherwise as such assignments may be amended, modified, renewed, extended, restated or supplemented from time to time.

"Attorneys' Fees" shall include any and all reasonable attorneys' fees incurred by Lender (whether by its use of in-house counsel or otherwise, and whether on the basis of a flat fee, retainer, contingent fee or hourly charges) incident to, arising out of or in any way connected with(a) the preparation, negotiation, and execution of this Agreement and the other Loan Documents (and any and all amendments, modifications, renewals, extensions, and supplements thereof and thereto), (b) the administration of the Loan, or (c) the enforcement of its rights and interests under this Agreement or any other Loan Document, including reasonable attorneys' fees incurred by Lender to collect sums due, during any work-out, with respect to settlement negotiations, or in

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any bankruptcy proceeding (including reasonable attorneys' fees incurred in connection with any motion for relief from the automatic stay).

"Attributable Principal Amount" means (i) in the case of Synthetic Leases, an  amount determined by capitalization of the remaining lease payments thereunder as if it were a Capital Lease determined in accordance with GAAP, and (ii) in the case of asset securiti:zation programs, the outstanding principal amount of such financing, after taking into account reserve amounts and making appropriate adjustments, as determined by the Administrative Agent under the terms of the Senior Credit Agreement.

"Authorized Officer" means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), chief financial officer or treasurer and, solely for purposes of making the certifications required under Section 4. l(a), any secretary or assistant secretary.

"Business Day" means any day on which commercial banks are not authorized or required to close in Chicago, Illinois.

"Capital Expenditures" means, with respect to the Parent and its Subsidiaries, including Borrower, on a consolidated basis, for any period (without duplication), any expenditures for fixed assets or that is properly chargeable to a capital account in accordance with GAAP.

"Capital Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

"Change of Control" means (i) any "person" (as such term is used in Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), other than the existing owners, that becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 promulgated under the Securities Exchange Act), directly or indirectly, of more than 30% of the total voting power of the Parent, or (ii) the Parent ceases to own (beneficially and of record) and control all of the issued and outstanding Equity Interests of the Borrower.

"Code" means the Internal Revenue Code of 1986 (26 U.S.C. §§ 1 et seq.), as amended from time to time, and all regulations promulgated thereunder and published interpretations thereof.

"Collateral" has the meaning specified in Section 3.1.

"Collateral Agent" means Regions Bank, or any successor thereto, who serves as the Collateral Agent under the Senior Credit Agreement.

"Commitment Expiration Date" means (a) 5:00 p.m. Central Standard Time on December 31, 2014, or (b) on such earlier date on which the Credit Commitment terminates as provided in this Agreement.

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"Commonly Controlled Entity" means any entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 414(b) or 414(c) of the Code.

"Consolidated EBITDA" means, for any period, with respect to the Parent and its Subsidiaries, including Borrower, the sum of (without duplication) (i) Consolidated Net Income;

(A) all Consolidated Interest Expense of the Parent and its Subsidiaries; (iii) income taxes of the Parent and its Subsidiaries; and (iv) depreciation and amortization of the Parent and its Subsidiaries determined on a consolidated  basis in accordance with GAAP for such period; provided that if any Subsidiary is not wholly-owned by the Parent, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal tothe amount of Consolidated Net Income attributable to such Subsidiary multiplied by (B) the percentage ownership interest in the income of such Subsidiary not owned by the Parent on the last day of such period.

"Consolidated EBITDAR" means, with respect to the Parent and its Subsidiaries, including Borrower, on a consolidated basis, for any period (without duplication) the sum of (i) Consolidated EBITDA for such period and (ii) Consolidated Lease Expense for such period.

"Consolidated Fixed Charge Coverage Ratio" means, as of any date of determination, the ratio of (i) Consolidated EBITDAR for the period of the four Fiscal Quarters most recently ended, minus taxes paid in cash during such period, minus maintenance Capital Expenditures for such period to (ii) Consolidated Fixed Charges for the period of the four Fiscal Quarters most recently ended; provided that maintenance Capital Expenditures shall be calculated at (A) 30% of consolidated depreciation expense through the Fiscal Year ending December 31, 2013, (B) 40% of consolidated depreciation expense through the Fiscal Quarter ending June 30, 2014, and (C) 50% of consolidated depreciation expense at all times thereafter.

"Consolidated Fixed Charges" means with respect to the Parent and its Subsidiaries, including Borrower, on a consolidated basis, for any period (without duplication), the sum of (i) Consolidated Interest Expense for such period; (ii) Consolidated Lease Expense for such period;

(iii) scheduled principal payments for any outstanding Indebtedness during the applicable period, and (iv) the amount of cash dividends and other distributions made by the Parent during such period (other than dividends paid on common stock of the Parent in such period in an amount up to $10,000,000). For purposes of this definition, "scheduled principal payments" (A) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments made during the applicable period, (B) shall be deemed to include the Attributable Principal Amount in respect of asset securitization programs and Synthetic Leases and (C) shall not include any voluntary prepayments or mandatory prepayments required pursuant to the Senior Credit Agreement.

"Consolidated Interest Expense" means, with respect to the Parent and its Subsidiaries, including Borrower, on a consolidated basis, for any period (without duplication), interest expense, whether paid or accrued (including the interest component of asset securitization programs and Synthetic Leases), on all Indebtedness of the Parent and its Subsidiaries for such period, net of interest income, all determined in accordance with GAAP.

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"Consolidated Lease Ad justed Indebtedness" means the sum of (i) all Indebtedness of the Parent and its Subsidiaries, including Borrower (other than obligations under any Swap Contract) determined on a consolidated basis in accordance with GAAP and (ii) the product of six (6) times the Consolidated Lease Expense of the Parent and its Subsidiaries for the past twelve (12) months determined on a consolidated basis in accordance with GAAP.

"Consolidated  Lease  Expense" means, with respect to the Parent and its  Subsidiaries, including Borrower, on a consolidated basis, for any period (without duplication),  all amounts payable under any leases  (whether  Capital  Leases  or  operating  leases)  and   time charter agreements which may be classified as operating lease expenses, charter hire expenses or rent as determined in accordance with GAAP during the period in question.

"Consolidated  Leverage  Ratio" means, as of any date of determination, the ratio of (i) Consolidated Lease Adjusted Indebtedness as of such date to (ii) Consolidated EBITDAR for the period of the four Fiscal Quarters most recently ended.

"Consolidated Net Income" means, for any period, the consolidated net income of the Parent and its Subsidiaries, including Borrower, for such period, as shown on the consolidated financial statements of the Parent and its Subsidiaries delivered in accordance with Section lS(b).

"Consolidated Tangible Net Worth" means, with respect to the Parent and its Subsidiaries, including Borrower, at any date for which a determination is to be made (determined on a consolidated basis without duplication in accordance with GAAP) (i) total stockholders' equity; minus (ii) goodwill.

"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "controlled" have meanings correlative thereto.

"Credit Commitment" means the obligation of Lender to make a single Advance hereunder to or for the account of Borrower prior to the Commitment Expiration Date for a purpose set forth in Section 2.1, in a principal amount up to, but not exceeding, the lesser of: (i) eighty percent (80%) of the fair market value of the Vessel as determined by an independent marine surveyor selected by Lender; or (ii) TWENTY-THREE MILLION FORTY THOUSAND AND N0/100 Dollars ($23,040,000.00)."

"Credit Parties" means, collectively, the borrowers and any guarantor of the Obligations (as defined in the Senior Credit Agreement) under the Senior Credit Agreement.

"Debt" or "Indebtedness" means with respect to any Person at any date of determination (without duplication), (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereof or the completion of such services, except trade payables, (v) all obligations on account of principal of

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such Person as lessee under Capital Leases and a]J off balance sheet liabilities retained by such Person in connection with asset securitization programs, Synthetic Leases and other similar obligations arising with respect to any other transaction which is the functional equivalent or takes the place of a borrowing but which does not constitute a liability on the consolidated balance sheet of such Person and its Subsidiaries, (vi) all indebtedness of other Persons secured by a lien on any asset of such Person, whether or not such indebtedness is assumed by such Person; provided that the amount of such indebtedness shall be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such indebtedness, (vii) all preferred stock and comparable Equity Interests providing for mandatory redemption, sinking fund or other like payments prior to the latter of the (x) Revolving Commitment Termination Date and (y) the Term Loan Maturity Date, and (viii) all indebtedness of other Persons guaranteed by such Person to the extent guaranteed. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum  liability upon the occurrence of the contingency giving rise to the obligation, provided that the amount outstanding at any time of any indebtedness issued with original issue discount is the face amount of such indebtedness less the remaining unamortized portion of the original issue discount of such indebtedness at such time as determined in conformity with GAAP; and provided further that Debt or Indebtedness shall not include any liability for current or deferred federal, state, local or other taxes, or any trade payables.

"Default Rate" means (a) a rate per annum equal to the interest rate payable under the Note at the time of the Event of Default plus four percent (4%), or (b) the Maximum Rate, whichever is less.

"Dollars" and "$" mean lawful money of the United States of America.

"DNB Credit Agreement" means that certain Credit Agreement, dated as of June 29, 2011, by  and among Borrower, Guarantor, the lenders party thereto, and DNB Bank ASA (formerly DnB NOR Bank ASA), among others, as such agreement may have been amended, modified, renewed, supplemented or restated. The obligations, liabilities and indebtedness of Borrower under the DNB Credit Agreement are being refinanced with the proceeds of the Loan to be made by Lender under this Agreement.

"Environmental Laws" means any and all foreign or United States federal, state, and local laws, regulations, and requirements pertaining to health, safety, or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., the Occupational Safety and Health Act, 29 U.S.C. §651 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Federal Water Pollution Control Act, 33 U.S.C.§1251 et seq., the Oil Pollution Act of 1990, 33 U.S.C. §2701 et seq., the Hazardous Materials Transportation Safety and Security Reauthorization Act of 2005, 49 U.S.C. §5101 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., and all similar laws, regulations, and requirements of any governmental authority or agency having jurisdiction over Borrower or any of its properties or assets, including the Vessel, as such laws, regulations, and requirements may be amended or supplemented from time to time.

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"Equity Interests" means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

"ERISA" means the Employee Retirement Income Security Act of 1974 (29 U.S.C. §§ 1001 et seq.), as amended.

"Event of Default" has the meaning specified in Section 8.1. "FiscalQuarter" means a fiscal quarter of any Fiscal Year.

"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries, including Borrower, ending on December 31 of each calendar year.

"GAAP" means accounting principles generally accepted in the United States in effect as of the date of determination thereof. For purposes of calculation of, and determination of compliance with, the financial covenants of Section 6.10 of this Agreement, GAAP shall be GAAP as in force on June 30, 2014.

"Guarantor" means International Shipholding Corporation, a Delaware  corporation,  and any other Person (if any) that may now or in the future be a guarantor, surety or accommodation party with respect to the obligations of Borrower hereunder and under the other Loan Documents, together with their respective heirs, successors and permitted assigns.

"Guaranty" means that certain Guaranty Agreement dated of even date herewith executed by Guarantor in favor of Lender, as well as any additional guaranty of the obligations of the Borrower under the Loan Documents executed by a Guarantor, together with all amendments thereto, restatements thereof and substitutions or replacements therefore.

"Hazardous Substance" means any substance, product, waste, pollutant, material, chemical, contaminant, constituent, or other material which is or becomes listed, regulated, or addressed under any Environmental Law, including, without limitation, asbestos, petroleum, and polychlorinated biphenyls.

"Installment Date" means a date scheduled for the payment of principal and/or interest under the Note.

"Interest Period" means each period commencing on the last day of the immediately preceding Interest Period and ending on the same day of the month that interest is due one month thereafter; provided, however, that: (i) the first Interest Period under the Note shall commence on the date of the Note and end on the first day thereafter that interest is due; (ii) any Interest Period that ends in a month for which there is no day which numerically corresponds to the last day of

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the immediately preceding Interest Period shall end on the last day of the month; and (iii) any Interest Period that would otherwise extend past the scheduled maturity date of the Note shall end on the scheduled maturity date of the Note.

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time (and the terms "safety management system," "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the ISM Code).

"ISM Code Documentation" includes: (a) the Document of Compliance and Safety Management Certificate issued pursuant to the ISM Code in relation to the Vessel within the periods specified by the ISM Code; (b) all other documents and data which are relevant to the safety management system and its implementation and verification which the Owner may require; and (c) any other documents which are prepared or which are otherwise relevant to establish and maintain the compliance of the Vessel or the compliance of the Borrower and its Affiliates with the ISM Code which the Lender may require.

"ISPS Code" means the International Ship and Port Facility Security Code as adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time.

"ISPS Code Documentation" includes the ISSC and all other documents and data which are relevant to the ISPS Code and its implementation and verification which are applicable to Borrower and its Affiliates or the Vessel that Lender may require.

"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code with respect to the Vessel.

"LIBOR  Business  Day"  means  a day  on  which  the  office  of the  Lender  at  which payments under the Note are to be made is open for business and on which dealings in Dollar deposits are carried out in the London interbank market.

"LIBOR Rate" means, with respect to any Interest Period, that rate for deposits in Dollars for a period comparable to the term of such Interest Period which appears on Reuters Screen LIBORO l Page 3750 (or such other page that may replace that page on the Reuters service or such other comparable financial information reporting service used by Lender, in its discretion, at the time such rate is determined) as of 11:00 a.m., London, England time on the day (the "Pricing Date") that is two LIBOR Business Days preceding the first day of such Interest Period (or if such financial information reporting service is not available to Lender, or if the LIBOR Rate is not so reported, then as determined by Lender from another recognized source or from one or more interbank quotations, in the discretion of Lender).

"Lien" means any lien, privilege, mortgage, security interest, tax lien, financing statement, pledge, charge, hypothecation, assignment, preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise.

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"Liquidity" means the sum of the Pro-Fonna Undrawn Availability plus Unrestricted Cash.

"Loan" means the total amount of the Advance to be made by Lender under the credit facility established in favor of Borrower under this Agreement.

"Loan Documents" means this Agreement, the Note, the Security Documents, the Guaranty and all additional promissory notes and other instruments, documents, and agreements executed and delivered pursuant to or in connection with this Agreement or otherwise securing the payment or perfonnance of the Obligations, as such instruments, documents, and agreements may be amended, modified, renewed, extended, or supplemented from time to time.

"Maritime Act" means the Maritime Act of 1990 of the Republic of the Marshall Islands, Title 47 of the Marshall Islands Revised Code, as such statute may be amended or reenacted from time to time.

"Maximum Rate" means the maximum rate of nonusurious interest permitted from day to day by applicable law, including, without limitation, Section 312 of the Maritime Act of the Republic of the Marshall Islands.

"Multi-Employer Plan" means a Plan described in Section 400l(a)(3) of ERISA.

"Note" means the promissory note of Borrower made payable to the order of Lender as evidence of the Advance to be made by Lender pursuant to this Agreement, as such instrument may be amended, modified, renewed, extended, restated or supplemented from time to time.

"Obligations" means all obligations, indebtedness, and liabilities of Borrower to Lender, now existing or hereafter arising under or in connection with this Agreement and the other Loan Documents, whether such obligations, indebtedness, and liabilities are direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, together with all interest, premiums, late fees or other charges accruing thereon or with respect thereto, and all Attorneys' Fees and other expenses incurred in the enforcement or collection thereof.

"Oil" has the meaning assigned in the Oil Pollution Act of 1990, 33 U.S.C. §2701, et seq.

"Outstanding Amount" means (a) with respect to Revolving Loans and Swingline Loans (made under and as defined in the Senior Credit Agreement) on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Loans and Swingline Loans, as the case may be, occurring on such date; (b) with respect to any Letter of Credit Obligations (as defined in the Senior Credit Agreement) under the Senior Credit Agreement on any date, the aggregate outstanding amount of such Letter of Credit Obligations on such date after giving effect to any issuance of a letter of credit occurring on such date and any other changes in the amount of the Letter of Credit Obligations under the Senior Credit Agreement as of such date, including as a result of any reimbursements by the borrowers under the Senior Credit Agreement of any drawing under any letter of credit; and (c) with respect to any Tenn Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any prepayments or repayments of such Tenn Loan on such date.

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"Parent" means International Shipholding Corporation, a Delaware corporation, the parent of Borrower, and a Guarantor, together with its successors and permitted assigns.

"PBGC" means the Pension Benefit Guaranty Corporation or any Person succeeding to any or all of its functions under ERISA.

"Permitted Liens" means (i) Liens in favor of Lender or its Affiliates, (ii) Liens against the Vessel, but only to the extent permitted under the Preferred Mortgage, and (iii) inchoate liens for taxes, assessments or other governmental charges which are not delinquent or which are being contested in good faith and for which adequate reserves have been established and a bond or other security has been posted (if required under applicable law to prevent the attest, attachment  or other seizure of the Vessels or other Collateral pursuant to such lien).

"Permitted Merger" means, so long as no Default or Event of Default shall have occurred and be continuing and so long as no Default or Event of Default would result therefrom, (i) with respect to Borrower, a merger or consolidation of any Subsidiary of Borrower with and into Borrower (provided, that Borrower is the surviving entity and remains a whollyowned Subsidiary of the Parent), and (ii) with respect to the Parent, either (A) a merger or consolidation of any Subsidiary of the Parent (other than Borrower) with and into the Parent, provided that the Parent is the surviving entity (and Borrower remains a wholly-owned Subsidiary of the Parent), or (B) a merger or consolidation of any Person who is not an Affiliate of the Parent as of the date of this Agreement with and into the Parent provided that the Parent is the surviving entity, Borrower remains a wholly-owned Subsidiary of the Parent, and as a result of the merger or consolidation the Consolidated Tangible Net Worth of the Parent and its Subsidiaries, including Borrower, will equal or exceed Consolidated Tangible Net Worth prior to the merger or consolidation.

"Person" means any individual, corporation, business trust, association, company, partnership, joint venture, limited liability company, governmental authority, or other entity.

"Plan" means: (i) any "employee benefit plan" as such term is defined in Section 3(3) of ERISA, and (ii) any stock option plan, bonus plan or arrangement, incentive award plan or arrangement, vacation policy, severance pay plan, policy, or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, and any other employee benefit plan, agreement, arrangement, program, or practice which is not described in clause (i) of this definition.

"Preferred Mortgage" means that certain Marshall Islands First Preferred Ship Mortgage encumbering the Vessel and other related Collateral described therein, and all proceeds thereof, each to be executed by Borrower in favor of Lender in a form acceptable to Lender and its counsel, and in a form recordable with the Marshall Islands Maritime and Corporate Administrator, as such instrument may be amended, modified, renewed or supplemented from time to time.

"Pro Forma Undrawn Availability" means, at any time, the maximum amount of Revolving Loans (as defined under the Senior Credit Agreement) that could be incurred by the

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borrowers under the Senior Credit Agreement at such time (but  not to exceed the Unutilized

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Revolving Commitments at such time) such that the Parent would remain in compliance with the financial covenants in Section [6.lO(a)], determined on a pro forma basis, after giving effect to such Revolving Loans.

"Prohibited Transaction" means any transaction set forth in Section 406 of ERISA or in Section 4975 of the Code.

"Reportable Event" means any of the events set forth in Section 4043 of ERISA. "Revolving  Commitment" means the commitment of a Lender under the Senior Credit

Agreement to make or otherwise fund any Revolving Loan (as defined under the Senior Credit Agreement) and to acquire participations in Letters of Credit and Swingline Loans (as defined under the Senior Credit Agreement) thereunder, and "Revolving Commitments" means such commitments of all such Lenders in the aggregate.

"Revolving  Commitment  Termination  Date" has the meaning  assigned in the  Senior Credit Agreement.

"Security Documents" means the Assignment of Earnings and Charterparties, the Assignment of Insurances, the Preferred Mortgage and any additional instrument, document or agreement granting a security interest in favor of Lender in, or collaterally assigning to Lender, any Collateral, as such instruments, documents, and agreements may be amended, modified, renewed, extended, or supplemented from time to time.

"Senior Credit Agreement" means that certain Credit Agreement dated as of September 24, 2013 executed by and among Parent and certain of its Subsidiaries, as "Borrowers," the Lenders party thereto, Regions Bank, as Administrative Agent and Collateral Agent, and Regions Capital Markets, a division of Regions Bank, as Lead Arranger and Sole Book Manager, as such agreement may be amended, supplemented, extended, modified or restated from time to time.

"Subsidiary" means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than fifty percent (50%) of the total voting power of Equity Interests entitled (without regard to the occurrence of any  contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person, or the accounts of which would be consolidated with those of such Person in its consolidated financial statements in accordance with GAAP, if such statements were prepared as of such date, or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a "qualifying share" of the former Person shall be deemed to be outstanding. Unless otherwise specified herein, the term Subsidiary shall mean a Subsidiary of the Borrower or of the Parent, as the case may be.

"Supporting Documents" include, (a) any invoices, requests for disbursements or draws, pay-off quotations or letters, statements or other documents issued by or on behalf of the Person to whom the Advance is payable, or with respect to whom the Advance is to be made, (b) each of the documents required under subsections (i) (1) of Section 4.2, and (c) such additional

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documents as may be reasonably required by Lender in connection with the requested Advance. For any Advance made to reimburse Borrower for expenditures made by Borrower from its working capital for a purpose authorized under Section 2.1, Supporting Documents shall also include proof of payment of the expenditures for which reimbursement is sought.

"Swap Contract" means (i) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (ii) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any master agreement.

"Synthetic Lease" means (i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the Indebtedness of such Person (without regard to accounting treatment).

"Term Loan" means Term Loan A and any other term loan made to the Parent or any of its Subsidiaries under the Senior Credit Agreement.

"Term Loan Maturity Date" means the date of maturity of the term loans extended by the term Lenders under the Senior Credit Agreement.

"Total   Revolving   Outstandings"  means  the  aggregate  Outstanding  Amount  of   all Revolving Loans, all Swingline Loans and all Letter of Credit Obligations under the  Senior Credit Agreement (as such terms are defined therein).

"Unrestricted Cash" means all unencumbered (other than liens in favor of the Collateral Agent under the Senior Credit Agreement securing the obligations of  the Credit Parties thereunder) cash and Cash Equivalents (as defined in the Senior Credit Agreement) of the Parent and its Subsidiaries at such time.

"Unutilized Revolving Commitment" means, at any time, the Aggregate Revolving Commitments at such time, minus the Total Revolving Outstandings at such time.

"Vessel" means the vessel GREEN DALE, Marshall Islands Official Number 5236, IMO Number 9181376, a Republic of the Marshall Islands-flagged, ABS classed, vehicle carrier, together with all engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, winches, capstans, outfit, tools, pumps, gears, furnishings, appliances, fittings,  navigation  and  communications  equipment,  computers,  stores,  spares  and  other

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appurtenances thereto appertaining or belonging, whether now owned or hereafter acquired, as more fully described in the Loan Documents to be executed by Borrower.

Section 1.2      Other  Definitional  Provisions. All definitions contained in this Agreement  are equally applicable to the singular and plural forms of the terms defined. The words "hereof ', "herein'', and "hereunder" and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise  specified, all Article and Section references pertain to this Agreement. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. Terms used herein that are  defined in the Uniform Commercial Code as adopted by the State of New York, unless otherwise  defined herein, shall have the meanings specified in the Uniform Commercial Code as adopted by that State.

ARTICLE 2

The Credit Facility

Section 2.1 Establishment of the Facility; Advance. Lender agrees to open a term loan credit facility in favor of Borrower, and to make a single Advance thereunder to or for the account of Borrower prior to the Commitment Expiration Date in a principal amount not to exceed the Credit Commitment. The proceeds of the Advance shall be used exclusively (a) to refinance certain existing indebtedness of Borrower under the DNB Credit Agreement secured by a preferred mortgage lien and security interest against the Vessel, (b) to fund a portion of the acquisition price payable  by Waterman Steamship Corporation, an Affiliate of Borrower and of Guarantor in connection with the early termination of the bareboat charter of a sister ship of the Vessel (as more fully described in Section 4.2(u)), or (c) for such other purposes as may be disclosed to, and approved in advance in writing by, Lender. The outstanding principal balance and accrued interest owing under the term loan facility shall be evidenced by the Note. Lender's agreement to fund the Advance under this credit facility shall expire and terminate automatically, without notice, on the Commitment Expiration Date or upon the occurrence of an Event of Default.

Section 2.2 Request for the Advance. The Advance shall be requested by Borrower in writing through an Authorized Officer by completing and forwarding to Lender an Advance Request. The Advance Request shall state the amount requested to be made in the Advance, and provide full disbursement instructions including wire transfer data (if the Advance is to be made by wire) and the name of the designated payee. The Advance Request shall be accompanied by all Supporting Documents with respect to the requested Advance. The Advance Request, with applicable Supporting Documents, shall be forwarded by Borrower to Lender's address for notices provided in Section 9.12 below (but may be transmitted electronically, by facsimile or e-mail, at Borrower's option). Lender must receive the Advance Request, and all Supporting Documents, with respect to the requested Advance no later than the second (2°d) Business Day prior to the date the Advance is required. Those Persons designated as Authorized Officers in the latest Certificate of the Secretary or Assistant Secretary of Borrower on file with Lender shall be conclusively deemed to be Persons authorized to request the Advance from Lender until Lender has received a written revocation of the authority of such Person(s). The Advance Request shall not be revocable by Borrower once the Advance has been made. Lender shall have no obligation to advance funds hereunder: (a) until the satisfaction of all conditions to such Advance provided herein; (b) if the requested Advance exceeds the Credit Commitment; (c) following the Commitment Expiration Date; or (d) after the occurrence of an Event of Default under this Agreement or under any other Loan Document (so long as such default remains uncured). Subject to the terms and conditions hereof, and

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provided that Lender has received the Advance Request for the requested Advance and all applicable Supporting Documents, Lender shall (unless any applicable condition specified in this Agreement has not been satisfied) pay to, or on behalf of, Borrower the Advance in immediately available funds.

Section 2.3 The Note. The Advance, and  the obligation of the Borrower to repay  the Advance, shall be evidenced by the Note, which shall be executed by the Borrower in form and substance satisfactory to Lender and its counsel, and made payable to the order of Lender in the principal amount of the Advance. The Note shall be payable as provided in Section 2.4 of this Agreement.

Section 2.4 Payment  of the  Note. The Note shall be payable, in arrears, in eighty-four  (84) consecutive monthly installments of principal, plus accrued and unpaid interest at the applicable  rates provided below, commencing thirty (30) days after the date of the Advance, and continuing on the same day of each successive month thereafter, until all principal, accrued interest and other sums due under the Note have been paid in full. Scheduled payments of principal under the Note shall be  calculated on the basis of a seven (7) year amortization. The first eighty-three (83) installments of principal payable under the Note shall be equal. The final installment of principal scheduled under the Note shall be in the amount of the remaining principal balance outstanding under the Note, plus accrued and unpaid interest, and any additional unpaid fees, late charges, premiums, expenses and other sums payable thereunder. Borrower shall pay all interest then accrued on the outstanding principal balance of the Note contemporaneously with the payment of the scheduled installments of principal thereunder. Regular payments under the Note shall be applied first to any unpaid late charges, then to accrued  and unpaid interest, and finally to principal.

Section 2.5Accrual of Interest under the Note.

(a) Variable Interest Based upon the LIBOR Rate. Prior to maturity, and in the absence of an Event of Default, the unpaid principal balance of outstanding under the Note shall bear interest at a variable or floating rate per annum equal to the LIBOR Rate plus 2.75%, which rate shall be adjusted monthly effective as of the first day of each Interest Period.

(b) Default Interest. After the maturity of the Note, whether by reason of acceleration, or otherwise, or upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the entire outstanding principal balance under the Note at the Default Rate.

(c) Computation and Accrual of Interest. Interest on the indebtedness of Borrower evidenced by the Note shall be computed on the basis of a year of 360 days, consisting of twelve months of thirty days each, and the actual number of days elapsed (including the first day but excluding the last day) unless such calculation would result in a usurious rate, in which case interest shall be calculated on the basis of a year of 365 or 366 days, as the case may be. Interest at the applicable rate(s) above, as adjusted, shall be charged daily upon the outstanding principal balance of the Note.

Section 2.6Prepayment.

(a) Optional Prepayment. Upon thirty days prior written notice to Lender, Borrower may prepay the Note, IN FULL ONLY, on any scheduled Installment Date following the scheduled date of the twenty-fourth  installment payable thereunder, by paying (i) the entire

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remaining principal balance outstanding under the Note on the date of prepayment, (ii) all accrued interest and other charges and amounts owing under the Note, this Agreement and any other Loan Document through the date of prepayment, and (iii) a prepayment premium (the "Prepayment Premium") equal to (A) one and 50/100 percent (1.50%) of the principal amount prepaid in connection with any prepayment made following the scheduled date of the twenty­ fourth (24th) installment but on or prior to the scheduled date of the thirty-sixth (36th) installment payable under the Note, (B) one percent (1%) of the principal amount prepaid in connection with any prepayment made following the scheduled date of the thirty-sixth (36th) installment but on or prior to the scheduled date of the forty-eighth (48th) installment payable under the Note; (C) 50/ l 00 percent (0.50%) of the principal amount prepaid in connection with any prepayment made following the scheduled date of the forty-eighth (48th) installment but on or prior to the scheduleddate of seventy-second  (7200) installment  payable  under the Note;  and (D) 25/100 percent(0.25%) of the principal amount prepaid in connection with any prepayment made following the scheduled date of the seventy-second (72nd) installment but prior to the scheduled date of eighty­ fourth (84th) installment payable under the Note. THE NOTE MAY NOT BE PREPAID UNTIL FOLLOWING THE SCHEDULED DATE OF THE TWENTY-FOURTH (24T8  INSTALLMENT PAYABLE THEREUNDER, AND THEN ONLY IN ACCORDANCE WITH THE PROCEDURE STATED ABOVE IN THIS SUBSECTION.

(b) Mandatory Prepayment. Borrower shall prepay the Note in full (i) following a total loss or constructive total loss of a Vessel during the term of the Loan, or (ii) following the acceleration of the Loan after an Event of Default by Borrower or Guarantor under this Agreement, the Note or any other Loan Document. Any mandatory prepayment shall be accompanied by the payment of all accrued interest and other charges and amounts owing under the Note, this Agreement and any other Loan Document through the date of prepayment, and in the case of a mandatory prepayment under clause (ii) of this subsection, the applicable Prepayment Premium (with the 1.50% Prepayment Premium also to a£ply to any mandatory prepayment occurring prior to the scheduled date of the twenty-fourth (24) installment).

Section 2.7       Increased Costs.

(a) Increased Costs Generally. Ifany change in applicable law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, Lender (except any reserve requirement reflected in the LIBOR Rate);

(ii) subject Lender to any taxes [other than taxes imposed on or measured by net income (however denominated), franchise taxes, and branch profits taxes, in each case, imposed as a result of Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof)] on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

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(iii) impose on Lender [or the London interbank market] any other condition, cost or expense (other than taxes) affecting this Agreement or the Loan made by Lender or participation therein;

and the result of any of the foregoing shall be to increase the cost to Lender of making, converting to, continuing or maintaining the Loan or of maintaining its obligation to make the Loan, or to reduce the amount of any sum received or receivable by Lender (whether of principal, interest or any other amount) then, upon request of Lender, the Borrower will pay to Lender such additional amount or amounts as will compensate Lender for the additional costs incurred or reduction suffered.

(b) Capital Requirements. If Lender determines that any change in applicable law affecting Lender or any lending office of Lender or its holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on Lender's capital or on the capital of Lender's holding company, if any, as a consequence of this Agreement, the commitments of Lender hereunder or the Loan made by Lender to a level below that which Lender or Lender's holding company could have achieved but for such change in law (taking into consideration Lender's policies and the policies of Lender's holding company with respect to capital adequacy), then from time to time Borrower will pay to Lender such additional amount or amounts as will compensate Lender or Lender's holding company for any such reduction suffered.

Section 2.8 Late Fees. If any sum payable under the Note shall not be received by Lender when due, Borrower shall, at Lender's option and to the extent allowed by law, pay to Lender a late charge equal to five percent (5%) of such overdue amount. However, in no event shall Lender receive or be entitled to receive an amount in excess of the maximum amount permitted by law. Borrower agrees that the amount of such late charge represents a reasonable estimate of the cost to Lender of processing a delinquent payment and that the acceptance of any late charge shall not constitute a waiver of default with respect to the overdue amount or prevent Lender from exercising any other available rights and remedies.

Section 2.9      Commitment Fee. [Intentionally Omitted].

Section 2.10  Method of Payment. Unless and until Borrower is otherwise notified in writing by Lender, all monthly payments due under the Note shall be made, in Dollars, and in immediately available funds, by electronic funds transfer debit transactions utilizing the Automated Clearing House ("ACH") network of the U.S. Federal Reserve System and shall be initiated by Lender from Borrower's account as shall have been previously established by Borrower with Lender and the applicable depositary with respect to such account (the "ACH Account") for settlement on the applicable Installment Date; provided, however, that if the applicable Installment Date is not a Business Day, then settlement shall be made on the immediately following Business Day. Borrower hereby authorizes Lender to electronically initiate the transfer of all monthly payments required under the Note by ACH transfer of funds from the ACH Account. Borrower shall, prior to each Installment Date, deposit and/or maintain sufficient funds in the ACH Account to cover all debit transactions initiated or to be initiated hereunder by or for Lender. Concurrently with or prior to the execution of this Agreement, Borrower shall execute and deliver written authorization to Lender to effect the foregoing and will from time to time execute and deliver further authorization to effect payment through ACH transfer. Borrower has delivered to Lender, concurrently with or prior to Borrower's execution and delivery of this Agreement, a voided blank check or a pre­ printed deposit formfor such ACH Account showing Borrower's ACH Account number.

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Notwithstanding the foregoing, any failure, for any reason, of the ACH network system or any electronic funds transfer debit transaction to be timely or fully completed shall not in any manner relieve Borrower from its obligation to promptly, fully and timely pay and make all payments or installments provided for under this Agreement and the Note when due, and to comply with all other of Borrower's obligations under this Agreement and the other Loan Documents, or relieve Borrower from its obligation to pay any late charges due or payable under the terms of this Agreement and the Note; provided however that if the cause for such failure is that Lender did not timely initiate the transfer request, there was a failure of the ACH network system that was not caused by Borrower, or there was any failure of the electronic funds transfer debit transaction that was not caused by Borrower, then Borrower shall not be in default or subject to late charges unless payment is not made within two (2) days after notice of nonpayment is given by Lender. Borrower shall provide Lender with at least ten (10) days prior written notice of any change in the ACH information provided above and Borrower shall not change the location of the ACH Account without first obtaining the written approval of Lender.

ARTICLE 3

Security

Section 3.1      Collateral. The payment and performance of the Obligations shall be secured by a preferred mortgage lien and/or security interest in, or the collateral assignment of, the following described property, whether now owned or hereafter acquired, together with all cash and non-cash proceeds thereof:

(a) The Vessel, together with all equipment, machinery, inventory and general intangibles related thereto;

(b) All (i) charters, contracts of affreightrnent, management agreements and other contractual arrangements entered into by Borrower covering the charter, use or operation of the Vessel (including the Approved Time Charter), together with the benefits, rights and remedies thereunder, including without limitation all charter hire payments, freights, subfreights and other monies now or hereafter due or to become due pursuant to such agreements; and (ii) accounts, salvage or requisition awards or recoveries, recoveries in general average, general intangibles (including payment intangibles), and any supporting obligations, including guaranties, arising out of the use or operation of, or otherwise related to, the Vessel or to any charter, management agreement or other contractual arrangement concerning the Vessel;

(c) All policies and contracts of insurance, including, without limitation, all entries in any protection and indemnity or war risks association or club, which are from time to time taken out in respect of the Vessel, and her hull, machinery, freights, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever nature under such policies, and all amounts due from underwriters under any such policies as payment oflosses, or as return premiums, or otherwise; and

(d) Document.All additional property of Borrower described in and encumbered by any Loan

The property and collateral described in this Section (together with any other property and collateral which may now or hereafter secure the Obligations or any part thereof, including the collateral described

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in Section 3.2 below) shall be hereinafter collectively referred to as the "Collateral." Lender shall have first priority security interests in the Collateral (including a first priority preferred mortgage lien in the Vessel), and there shall be no other Liens affecting the Collateral other than Permitted Liens. Borrower agrees to execute and deliver to Lender the Security Documents and any other document or agreement deemed necessary by Lender or its counsel to create or perfect first priority preferred mortgage liens and security interests in favor of Lender in the Vessel and the other Collateral described in this Section as required to meet the applicable conditions of Article 6.

Section 3.2 Grant of Security Interest in Deposits. etc. As further security for the Obligations, Borrower and Guarantor hereby grant to Lender a security interest in (a) any and all deposit accounts maintained at, or certificates of deposit maintained with or issued by, Lender or its Affiliates (whether such certificates constitute "deposit accounts" or "instruments" as defined in the Uniform Commercial Code); and (b) all other collateral as to which a security interest has been or is hereafter granted by Borrower to Lender or to any of its Affiliates in connection with any mortgage, indenture, loan or credit agreement, or other contract or agreement for money borrowed or the lease of real or personal property (an "Ancillary Agreement"); and (c) all proceeds of collateral described in subsections (a) and (b) above. Anything herein to the contrary notwithstanding, the security interest granted pursuant to this Section 3.2 shall be solely for the benefit of Lender and its Affiliates, and any security interest created under clause

(b) of this Section 3.2 shall expire upon full satisfaction of the obligations of Borrower and/or Guarantor to Lender, its successors or assigns, or the applicable Affiliates  pursuant to the relevant Ancillary Agreement.

Section 3.3  Additional Credit Support. As additional credit support for, and as an inducement for Lender to make, the Loan contemplated hereunder, all Obligations of Borrower to Lender shall be guaranteed by Guarantor, jointly and severally with Borrower, pursuant to the Guaranty. The obligations of Guarantor shall be absolute, unconditional and unlimited, and shall continue so long as any Obligations of Borrower to Lender remain outstanding.

Section 3.4 Financing Statements and Additional Documents. Borrower and Guarantor authorize Lender to prepare and file Uniform Commercial Code financing statements, and amendments thereto, describing the Collateral in any appropriate jurisdiction, all without the signatures  of Borrower and Guarantor if permitted by applicable law. Borrower and Guarantor shall execute and cause to be executed such further documents and instruments as Lender, in its sole discretion, deems necessary or desirable to evidence and perfect its liens and security interests in the Collateral.

ARTICLE 4

Conditions to Lender's Obligation to Advance

Section 4.1     Loan  Documents: Lien Search Reports, etc. Notwithstanding any prov1s1on contained herein or in any commitment of Lender to the contrary, Lender shall have no obligation to make the Advance unless Lender shall have first received:

(a) Certificates of the Secretary. Certificates of the Secretary or Assistant Secretary of Borrower and Guarantor, respectively executed by the secretary or an assistant secretary of Borrower and Guarantor, as appropriate, each certifying the names of the officers of such Person authorized to sign this Agreement and each of the other Loan Documents to which such Person is or is to be a party  (including the certificates  contemplated  herein) together with  specimen

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signatures of such officers, which such Certificates shall each have appended thereto copies of (i} the resolutions of the board of directors or shareholders of Borrower or Guarantor, as applicable, duly adopted and in force, authorizing the execution and delivery of this Agreement and the other Loan Documents to which such Person is or is to be a party, as well as the performance of the obligations stated therein; (ii} the articles or certificate of organization or incorporation of Borrower or Guarantor, as applicable; and (iii} a copy of the by-laws of Borrower or Guarantor, as applicable, each certified by the secretary or an assistant secretary of such Person as appropriate;

(b) Governmental Certificates. Certificates of the appropriate government officials of the jurisdiction of incorporation or organization of Borrower and Guarantor as to the existence and good standing of Borrower and Guarantor;

(c) Term Note. The Term Note, duly executed by Borrower, to evidence the principal amount of the Advance;

(d) Preferred Mortgage. The Preferred Mortgage duly executed by Borrower covering the Vessel in a form acceptable to Lender and its counsel and recordable with the Marshall Islands Maritime and Corporate Administrator (and such Preferred Mortgage provides Lender a first priority preferred mortgage lien and security interest against the Vessel and related Collateral subject only to Permitted Liens and the preferred mortgage lien of DNB Bank ASA to be satisfied with the proceeds of the Advance);

(e) Assignment Earnings. The Assignment of Earnings duly executed by Borrower;

(f) Notice and Acknowledgement of Collateral Assignment. A Noticeand Acknowledgement of Collateral Assignment duly executed by Borrower and Nippon Yusen Kaisha, the time charterer under the Approved Time Charter, pursuant to which, among other acknowledgments and undertakings, Nippon Yusen Kaisha will subordinate all of its right, title and interest in and to the Vessel under the Time Charter to the interests of Lender under the Preferred Mortgage;

(g) Assignment of Insurances. The Assignment of Insurances with respect to the Vessel duly executed by Borrower together with a Notice of Assignment in the form appended thereto duly executed by Borrower and the insurance broker of Borrower;

(h) Guaranty. The Guaranty duly executed by Guarantor;

(i) Advance Reguest. An Advance Request executed by a duly authorized officer of Borrower with respect to the Advance, all of the statements in which shall be true and correct on and as of the date of the Advance;

(j) Supporting Documents. All applicable Supporting Documents with respect to the Advance;

(k) Satisfactory Lien Searches. Search results in any applicable jurisdiction with respect to Borrower, in form and substance satisfactory to Lender, which show that Lender has, or will have, at the time of each Advance, a valid and subsisting first priority preferred mortgage

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lien and/or security interest in all of the Collateral existing as of the date of the Advance and that there are no other Liens that may affect the Collateral other than Pennitted Liens and the preferred mortgage lien in favor of DNB Bank ASA to be satisfied with the proceeds of the Advance;

(l) Legal Opinions. Opinions of counsel for Borrower and Guarantor, in form and substance satisfactory to Lender, addressing such matters as Lender may require, including, without limitation, (i) the due organization and existence of Borrower and Guarantor, (ii) the corporate power of Borrower and Guarantor, (iii) the authority of the officers of Borrower and Guarantor to execute and deliver the Loan Documents to which such Person is a party, (iv) enforceability of the Loan Documents under applicable law, and (v) perfection of Liens against the Collateral;

(m) ACH Forms. All forms required by Lender and the depositary bank holding the ACH Account to provide for payment of principal and interest scheduled under the Note by ACH transfer duly executed by Borrower and the depositary bank;

(n) DNB Pay-off Letter. A pay-off letter executed by DNB Bank ASA in form and substance satisfactory to Lender setting forth (i) all amounts required to be paid to release the preferred mortgage lien and security interests in favor of DNB Bank against the Vessel and other Collateral, (ii) applicable wire transfer instructions to the account of accounts into which the pay­ off is to be transferred, and (iii) the commitment of DNB Bank to tender to Lender, the insurer or account debtor, or to the appropriate filing officer, as applicable, any and all executed certificates of discharge, releases, tennination statements, reassignments and other documents, in recordable form where required, that may be necessary to terminate the preferred mortgage lien and security interests held by DNB Bank and/or the lenders under the DNB Credit Agreement in the Collateral promptly upon the receipt of funds; and

(o) (m) Other Documents. Borrower and Guarantor shall have executed such other agreements, documents, instruments and certificates as Lender may reasonably request, including, without limitation any documents necessary to provide the information referenced in Section 5.18 hereof.

Section 4.2       Additional  Conditions  to  Lender's  Obligation  to  Advance. The obligation  of Lender to make any Advance under this Agreement is subject to the following additional  conditions precedent:

(a) Completion  of  Due  Diligence. Lender shall have completed  all financial  and legal analysis and other due diligence with respect to Borrower and Guarantor, and Lender shall have completed an inspection of the Collateral, in such scope as determined by, and with results reasonably satisfactory in substance to, Lender;

(b) Compliance with Representations and Warranties. All of the representations  and warranties of Borrower and Guarantor set forth herein and in each other Loan Document  (other than those representations and warranties which are limited in application to a specific date) are true and correct on and as of the date of the Advance;

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(c) Compliance with Covenants. Borrower and Guarantor are in compliance with all of the affirmative and negative covenants provided in this Agreement and in each other Loan Document on and as of the date of the Advance;

(d) Material Adverse Change. As reasonably determined by Lender, there shall have occurred no material adverse change in (i) the business, condition  (financial or otherwise), operations, prospects, or properties of Borrower or Guarantor from the financial condition reflected on the financial statements submitted to Lender prior to credit approval, or (ii) in the validity or enforceability of any Loan Docwnents;

(e) No Event of Default under Loan Documents. There shall be no uncured Event of Default of Borrower or Guarantor, and there shall have occurred no event that, with the passage of time or the giving of notice, or both, and the failure of Borrower or Guarantor to cure, would constitute an Event of Default, under the Loan Documents;

(f) Financial Statements. Lender shall have received the most recent financial statements of Borrower and Guarantor required under Section 6.1, as applicable, and such statements reflect no material adverse change in the business, condition (financial or otherwise), operations, prospects, or properties of Borrower or Guarantor since the effective date of the financial statements furnished to Lender in connection with credit approval;

(g) Costs of Lender. Borrower has paid all expenses of Lender payable by Borrower under the terms of Section 9.1 which have been billed to Borrower as of the date of the Advance;

(h) Documentation of and Title to the Vessel and Related Collateral. The Vessel has been registered under the laws of the Republic of the Marshall Islands in the name of the Borrower, and Borrower has good and merchantable title to the Vessel and related Collateral free and clear of Liens (other than Permitted Liens and the preferred mortgage lien of DNB Bank ASA to be satisfied with the proceeds of the Advance);

(i) Operational Certificates. Lender has received true correct and complete copies of the following operational certificates with respect to the Vessel to be refinanced with the proceeds of the Advance, if required for the operation of the Vessel under the laws of the Republic of the Marshall Islands or other applicable law, and such certificates are in full force and effect, without exception (i) a Provisional Load Line Certificate issued by the American Bureau of Shipping ("ABS"); (ii) all ISM Code Documentation; (iii) all ISPS Code Documentation; (iv) an International Tonnage Certificate issued for the Vessel by the ABS; (v) all Ship Safety Certificates required for the Vessel; and (vi) an International Oil Pollution Prevention Certificate (and all applicable annexes and supplements thereto);

(j) G) Classification of the Vessel. Lender has received a Confirmation of  Class Certificate issued by the ABS confirming that the Vessel holds and is in class for, without exception, the following classifications: A·l Vehicle Carrier, AMS and ACCU.

(k) Payment  of  Excess  Amounts. Borrower has paid, in good funds, all  principal, interest, late charges, premiums, fees and other sums, if any, payable to DNB Bank ASA above the Credit Commitment that is necessary to secure the release of the preferred  mortgage liens and security interests of DNB Bank ASA against the Vessel;

(l) Survey of the Vessel. Lender has received a survey and appraisal of the Vessel by an independent, certified marine surveyor or appraiser selected by Lender, in form, substance and content satisfactory to Lender, setting forth such matters as Lender may reasonably require, including a statement of the distress, orderly liquidation and fair market values of the Vessel and establishing a fair market value of the Vessel of not less than $28,800,000.00;

(m) Certificate of Discharge: Satisfactions; Releases: etc. Lender shall have received a certificate of discharge, satisfaction of mortgage, release of mortgage, termination statement, reassignment or other appropriate instrument sufficient to discharge of record the preferred mortgage liens and security interests in favor of DNB Bank ASA against the Vessel in a form acceptable to Lender and its counsel and recordable with the Marshall Islands Maritime and Corporate Administrator or other filing officer, as applicable;

(n) Pay-Off of Bareboat  Charter  Obligations. Lender has received (i) confirmation from DVB Bank SE, in form and substance satisfactory to Lender, that it is prepared to fund

(o) $38,500,000.00 (the "DVB Loan") of the $55,619,300.00 acquisition price payable by Waterman Steamship Corporation ("Waterman"), an Affiliate of Borrower and of Guarantor, to Wells Fargo Bank Northwest, National Association, as Trustee of the Green Bay Vessel Trust (the "Trust"), in connection with the early termination of that certain Bareboat Charter Agreement dated February 22, 2012 (the "GREEN BAY Charter") between the Trust, as owner, and Waterman, as charterer, pursuant to which Waterman chartered the vessel GREEN BAY from the Trust (in which transaction Lender is a participant), (ii) a wire transfer from Borrower to Lender of the balance of the acquisition price that will remain due to Lender (as a participant in the GREEN BAY Charter) after funding of both the Loan to be made by Lender pursuant to this Agreement and the DVB Loan, and (iii) a copy of the  Termination Agreement between Waterman and the Trustee evidencing the agreement of Waterman and the Trustee to the early termination of the GREEN BAY Charter (other than with respect to indemnity obligations that survive the termination of the GREEN BAY Charter) and to the conveyance of the GREEN BAY by the Trust to Waterman; and

(p) Proof of Insurance. Lender has received a certificate of insurance or cover note evidencing all insurance policies required under the Preferred Mortgage covering the Vessel, together with loss payable endorsements in favor of Lender with respect to all insurance policies covering Collateral, and a letter of undertaking issued by Borrower's insurance broker containing, among other customary undertakings, an undertaking to inform Lender prior to any cancellation or material alteration of any policies or entries with respect to the Vessel.

ARTICLE S

Representations and Warranties

To induce Lender to enter into this Agreement, Borrower and Guarantor jointly and severally represent and warrant to Lender that as to itself:

Section 5.1   Corporate or Juridical Existence. Borrower is a corporation duly organized under the laws of Liberia but re-domiciled under the laws of the Republic of the Marshal Islands. Guarantor is a corporation duly organized under the laws of the State of Delaware. Each of Borrower and Guarantor (a)

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are validly existing, and in good standing as, corporations under the laws of the their respective current jurisdictions of incorporation; (b) have all requisite power and authority to own its assets and carry on its business as now being or as proposed to be conducted; and (c) are qualified to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to so qualify would have a material adverse effect on its business, condition (financial or  otherwise), operations, prospects, or properties. The respective names of Borrower and Guarantor stated in the preamble of this Agreement are the correct legal names of Borrower and Guarantor, and neither Borrower nor Guarantor has operated under any other legal name within the last five (5) years.

Section 5.2 Due Authorization:  Power.  The execution, delivery, and performance  of  this Agreement and the other Loan Documents to which Borrower or Guarantor is or may become a party has been duly authorized by all requisite action on the part of such Person, and its directors (or equivalent officers) or shareholders, as applicable. Each of Borrower and Guarantor has the corporate power and authority to execute, deliver, and perform its obligations under this Agreement and the other Loan Documents to which it is or may become a party.

Section 5.3 No Conflicts. The execution, delivery, and performance of this Agreement and the other Loan Documents to which Borrower or Guarantor is or may become a party does not and will not violate or conflict with the articles or certificate of incorporation or organization, or the by-laws of such Person, or any law, rule, or regulation, or any order, writ, injunction, or decree of any court, governmental authority, or arbitrator, and does not and will not conflict with, result in a breach of, or constitute a default under, or result in the creation or imposition of any Lien upon any of the revenues or assets of such Person pursuant to the provisions of any indenture, mortgage, deed of trust, security agreement, franchise, permit, license, or other instrument or agreement by which such Person, or any of its properties, is bound.

Section 5.4 Citizenship. Borrower is a non-resident corporation incorporated under Part I (the Business Corporation Act) of the Associations Law of the Republic of the Marshall Islands, Title 52, Marshall Islands Revised Code, as amended, and is eligible to register the Vessel in its name under Section 203 of the Maritime Act. Neither Guarantor, nor any shareholder of Borrower, is a "national" of any "enemy country" as defined in any statute or executive order of the United States, or of any regulations, rules, interpretations or rulings issued thereunder, and neither Borrower nor Guarantor is acting on behalf of, or for the benefit of, any foreign country which, or for which, actions on behalf of is prohibited by any statute of the United States or any regulations or rulings issued thereunder.

Section 5.5Financial Statements. All :financial statements that have been delivered  by Borrower and Guarantor to Lender are true and correct, have been prepared in accordance with GAAP, and fairly and accurately present the :financial condition of Borrower and Guarantor as of the respective dates, and the results of operations for the respective periods, indicated therein. Neither Borrower nor Guarantor has any material contingent liabilities, liabilities for taxes, material forward or long-term commitments, or unrealized or anticipated losses from any unfavorable commitments not reflected in such financial statements. There has been no material adverse change in the business, condition (financial or otherwise), operations, prospects, or properties of Borrower or Guarantor since the effective date of such financial statements.

Section 5.6Operation of Business. Borrower and Guarantor possess all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, to conduct their respective

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businesses substantially as now conducted and as presently  proposed to be conducted, and neither Borrower nor Guarantor is in violation of any valid rights of others with respect to any of the forgoing.

Section 5.7 Litigation and Judgments. Except as previously disclosed  by  Borrower  and Guarantor to Lender in writing, there is no action, suit, investigation, or proceeding before or by  any court, governmental authority or arbitrator pending, or to the knowledge of Borrower or  Guarantor, threatened  against or affecting Borrower or Guarantor, that would, if adversely  determined, have a material adverse effect on the business, condition (financial or otherwise), operations, prospects, or properties of such Person, or the ability of such Person to pay and perform the Obligations. There are no outstanding judgments against Borrower or Guarantor.

Section 5.8 Rights in Properties. Each of Borrower and Guarantor has good and indefeasible title to or valid leasehold interests in its properties and assets, real and personal, including the properties, assets, and leasehold interests reflected in its financial statements. Without limiting the foregoing, Borrower has or will have at all pertinent times good and indefeasible title to all property constituting Collateral free and clear of any Liens other than Permitted Liens and the preferred mortgage lien of DNB Bank ASA to be satisfied with the proceeds of the Advance.

Section 5.9 Enforceability. This Agreement constitutes, and the other Loan Documents to which Borrower or Guarantor is a party, when delivered, shall constitute legal, valid, and binding obligations of such Person, enforceable against such Person in accordance with their respective terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to the enforcement of creditor's rights.

Section 5.10 Approvals. No authorization, approval, or consent of, and no filing or registration with, any court, governmental authority, or third party is or will be necessary for the execution, delivery, or performance by Borrower or Guarantor of this Agreement and the other Loan Documents to which such Person is or may become a party or the validity or enforceability thereof or if required any such authorization, approval, or consent shall have been obtained by Borrower or Guarantor prior to the execution and delivery of the Loan Document to which such authorization, approval, or consent is applicable).

Section 5.1 1 Taxes. Borrower and Guarantor have filed all tax returns (foreign, federal, state, and local) required to be filed, including all income, franchise, employment, property, and sales taxes, and have paid all of their respective liabilities for taxes, assessments, governmental charges, and other levies that are due and payable, and neither Borrower nor Guarantor knows of any pending investigation of Borrower or any Guarantor by any authority or of any pending but unassessed tax liability.

Section 5.12 Disclosure. No statement, information, report, representation, or warranty made by Borrower or Guarantor in this Agreement or in any other Loan Document or furnished to Lender in connection with this Agreement or any of the transactions contemplated hereby contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading. There is no matter known to either Borrower or Guarantor which has a material adverse effect, or which might in the future have a material adverse effect, on the business, condition (financial or otherwise), operations, prospects, or properties of Borrower or Guarantor that has not been disclosed in writing to Lender.

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Section 5.13 Agreements. Neither Borrower nor Guarantor is a party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter or other organizational restriction which could have a material adverse effect on the business, condition (financial or otherwise), operations, prospects, or properties of such Person, or the ability of such Person to pay and perform its obligations under the Loan Documents. Neither Borrower nor Guarantor is in default in any respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business.

Section 5.14 Compliance with Laws. Neither Borrower, nor Guarantor, is in violation in any material respect of any law, rule, regulation, order, or decree of any court, governmental authority, or arbitrator.

Section 5.15Environmental Matters.

(a) Borrower and Guarantor, and all of their respective properties, assets,  and operations, are in full compliance with all Environmental Laws. Neither Borrower nor Guarantor is aware of, nor has either Borrower or Guarantor received notice of, any past, present, or future conditions, events, activities, practices, or incidents which may interfere with or prevent the compliance or continued compliance of such Person with any Environmental Laws.

(b) Borrower and Guarantor have obtained all permits, licenses, and authorizations which are required under Environmental Laws.

(c) There is no action, suit, proceeding, investigation, or inquiry before any court, administrative agency, or other governmental authority pending or, to the knowledge of Borrower or Guarantor, threatened against Borrower or Guarantor relating in any way to any Environmental Law. Neither Borrower nor Guarantor (i) has any liability for remedial action under any Environmental Law, (ii) has received a request for information by any governmental authority with respect to the condition, use, or operation of any of its properties or assets, and/or (iii) has received a notice from any governmental authority or other Person with respect to any violation of or liability under any Environmental Law.

(d) No Lien arising under any Environmental Law has attached to any of the properties or assets of Borrower or Guarantor.

Section 5.16 Labor Disputes and Acts of God. Neither the business nor properties of Borrower or Guarantor are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, earthquake, embargo, act of God or of a public enemy, governmental action, casualty (whether or not covered by insurance) or other occurrence that has or may have a material adverse effect on the business, condition (financial or otherwise), operations, prospects, or properties of such Person.

Section 5.17 ERJSA. Borrower and Guarantor are in compliance in all material respects with all applicable provisions of ERJSA. Neither a Reportable Event nor a Prohibited Transaction has occurred and is continuing with respect to any Plan. No notice of intent to terminate a Plan has been filed, nor has any Plan been terminated. No circumstances exist that may constitute grounds for the PBGC to institute proceedings to terminate, or to appoint a trustee to administer, any Plan, nor has the PBGC instituted any such proceedings. Neither Borrower, nor Guarantor, nor any Commonly Controlled Entity has completely or partially withdrawn from a Multi-Employer Plan. Borrower, Guarantor and all Commonly Controlled

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Entities have met their minimum funding requirements under ERISA with respect to all of their Plans, and the present value of all vested benefits under each Plan does not exceed the fair market value of all Plan assets allocable to such benefits as determined on the most recent valuation date of the Plan and in accordance with the provisions of BRISA. Neither Borrower, nor Guarantor, nor any Commonly Controlled Entity, has incurred any liability to the PBGC under BRISA.

Section 5.18USA PATRIOT and Bank Secrecy Act Information.

(a) All of the written information that Borrower and Guarantor have provided to Lender with respect to Borrower, Guarantor, their respective Affiliates or otherwise in connection with the Loan contemplated by this Agreement was true, correct and complete at the time it was given.

(b) Each of Borrower and Guarantor shall from time to time furnish any information deemed necessary by the anti-money laundering officer of Lender in his or her sole discretion (other than information that (i) it does not possess, (ii) is confidential, or (iii) it is under an obligation not to disclose) to comply with the USA PATRIOT Act, Federal law requirements that all financial institutions obtain, verify and record information regarding customers pursuant to 31 CFR Part 103.121, Lender's anti-money laundering program and similar or related responsibilities. All of such information shall be true, correct and complete at the time provided.

(c) Borrower and Guarantor are entering into this Agreement, the Loan Documents, and the transaction contemplated hereby and thereby solely for their own account, risk and beneficial interest, and not for the account or beneficial interest of any other Person.

(d) To the knowledge of Borrower and Guarantor, without investigation, neither Borrower, nor Guarantor nor their respective Affiliates (i) are Persons identified on any Office of Foreign Assets Control ("OFAC") ''watch list", including, without limitation, the list of Specially Designated Nationals and Blocked Persons issued by OFAC; (ii) are Persons identified on any Federal Bureau of Investigation "watch list" or Bureau of Industry and Security list of unverified Persons or denied Persons (or are affiliated in any way with any such Persons); (iii) are a shell bank or an offshore bank; or (iv) are Persons resident in, or whose funds are transferred from or through, or who have operations in, any jurisdiction identified as non-cooperative by the Financial Action Task Force (the "FATF") or sanctioned by the OFAC.

Section 5.19 Status under the Investment Company Act. Neither Borrower, nor Guarantor, is an "investment company," or an "affiliated company" or a "principal underwriter" of an "investment company" as such terms are defined in the Investment Company Act of 1940.

Section 5.20 Use of Loan Proceeds; Margin Stock. Borrower is not engaged, in any respect, in the business of extending credit for the purpose of purchasing or carrying any "margin stock" as such term is used in Regulation U of the Board of Governors of the Federal Reserve System. No part of the proceeds of the Loan will be used, directly or indirectly, for a purpose which violates any law, rule or regulation of any governmental body, including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System. The proceeds of the Loan will be used solely for a purpose authorized in Section 2.1 of this Agreement, and no proceeds of the Loan will be used, directly or indirectly, to purchase or carry, or to extend credit to any other Person for the purpose of purchasing or carrying, any "margin stock" as defined in the regulations referenced above.

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ARTICLE 6

Affirmative Covenants

Borrower and Guarantor jointly and severally covenant and agree that, as long as the Obligations or any part thereof are outstanding, or Lender has any commitment hereunder, Borrower and Guarantor will perform and observe the following affirmative covenants, unless Lender shall otherwise consent in writing:

Section 6.1Reporting Requirements. Borrower and Guarantor will furnish to Lender:

(a) Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each calendar year (which is the Fiscal Year  of Borrower and Guarantor), beginning with the year 2014, a copy of the annual audited combined and consolidated financial statements of Guarantor and its Subsidiaries (including Borrower) for such Fiscal Year each containing a balance sheet, statement of income,  statement of retained earnings, statement of changes in financial position, and cash flows as of the end of such Fiscal Year and for the 12-month period then ended, in each case setting forth in comparative form the figures for the preceding Fiscal Year, all in reasonable detail and  prepared by independent certified public accountants of recognized standing reasonably  acceptable to Lender, and certified by such accountants to have been prepared in accordance with GAAP;

(b) Quarterly Financial Statements. As soon as available, and in any event  within forty-five (45) days after the end of each of the quarters of each Fiscal Year of Guarantor, a copy of the management-prepared combined and consolidated financial statements of Guarantor and its Subsidiaries (including Borrower) as of the end of such Fiscal Quarter and for the portion of the Fiscal Year then ended, containing balance sheets and statements of income, in each case setting forth in comparative form the figures for the corresponding period of the preceding fiscal year, all in reasonable detail and respectively certified by the chief executive or chief financial  officer of Guarantor to fairly and accurately present (subject to year-end adjustments required  by GAAP) the financial condition and results of operations of Guarantor and its Subsidiaries  (including Borrower) at the date and for the periods indicated therein;

(c) Certificate of Compliance and No Default. Concurrently with the delivery of the quarterly financial statements referred to in subsection (b) of this Section 6.1, a certificate of the chief financial officers of Borrower and Guarantor stating, to the best of such Person's knowledge, that (i) Borrower and Guarantor are each in compliance with the applicable financial covenants set forth below in this Article (which such certificate shall be supported by and contain information and/or calculations, as applicable, demonstrating such compliance), and (ii) no Event of Default and no event which with notice or lapse of time or both would be an Event of Default has occurred and is continuing, or if an Event of Default or such an event has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto;

(d) Tax Returns. If requested by Lender, as soon as available, and in any event within fifteen (15) days after filing with the Internal Revenue Service or other governmental

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authority, a copy of the income tax returns of Borrower and Guarantor, together with all schedules thereto, and all supplements and amendments to any of the foregoing;

(e) Notice of Litigation. Promptly  after  the  commencement  thereof,  notice  of  all actions, suits, and proceedings before any court or governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, affecting Borrower or Guarantor that, if determined adversely  to  Borrower  or Guarantor,  could  have  a material  adverse  effect  on the business, condition (financial or otherwise), operations, prospects, or properties of such Person;

(f) Notice Qf Default. As soon as possible and in any event within five (S) days after the occurrence of each Event of Default and each event which, with the giving of notice or lapse of time or both, would constitute an Event of Default, a written notice setting forth the details of such Event of Default or event and the action which Borrower and Guarantor have taken and propose to take with respect thereto;

(g) Notice  of  Environmental   Law  Violation. As soon as possible  and in any  event within five (S) days after the occurrence thereof, written notice of any material violation  of any Environmental   Law  that   Borrower   or   Guarantor   reports   or  is  required   to  report   to   any governmental authority;

(h) Notice  of Material  Adverse Effect. As soon as possible and in any event within five (S) days after the occurrence thereof, written notice of any matter that could have a material adverse effect on the  business, condition (financial or otherwise), operations,  prospects, or properties of Borrower or Guarantor;

(i) Reports  Regarding  ERISA. As soon as possible,  and in any event within thirty(30) days after Borrower or Guarantor knows or has reason to know that any circumstances exist that may constitute grounds entitling the PBGC to institute proceedings  to  terminate  a  Plan subject to ERISA with respect to Borrower, Guarantor or any Commonly Controlled Entity, and promptly, but in any event within five (S) Business Days after the receipt by Borrower, Guarantor or any Commonly Controlled Entity of notice that the PBGC intends to terminate a Plan or to appoint a trustee to administer  a Plan, and promptly, but in any event within two (2) Business Days  of the  receipt  of  notice  concerning  the  imposition  of  withdrawal  liability  in  excess  of$100,000.00 with respect to Borrower, Guarantor or any Commonly Controlled Entity, Borrower and Guarantor will deliver to Lender a certificate of their respective chief financial officers setting forth all relevant details and the action that Borrower and Guarantor propose to take with respect thereto;

(j) Confirmation of Class. On or before September 30, 2014, (i) a copy of the report of the dry dock survey and inspection of the Vessel by the ABS scheduled in August 2014, (ii) an updated confirmation of class certificate issued for the Vessel by the ABS free of any overdue items or outstanding recommendations affecting class, (iii) copies of all class certificates issued for the Vessel by the ABS endorsed to show completion of all surveys due for the Vessel in August or September 2014, and (iv) copies of all Marshall Islands regulatory certificates with expiry dates in September 2014 showing the renewal of such certificates; and

(k) General Information. Promptly, such other information concerning Borrower and Guarantor as Lender may from time to time reasonably request.

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Section 6.2 Maintenance of Existence; Conduct of Business. Each of Borrower and Guarantor will preserve and maintain its respective existence as a corporation, all of its leases, privileges, licenses, permits, franchises, qualifications, and rights that are necessary or desirable in the ordinary conduct of its business. Each of Borrower and Guarantor will conduct its business as presently being conducted, and in compliance with all covenants set forth in this Agreement and the other Loan Documents.

Section 6.3 Maintenance of Properties. Each of Borrower and Guarantor will maintain, keep, and preserve all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition. Without limiting the foregoing, Borrower shall preserve and maintain the Vessel as required in the Preferred Mortgage.

Section 6.4 Taxes and Claims. Each of Borrower and Guarantor will pay or discharge, at or before maturity or before becoming delinquent (i) all taxes, levies, assessments, and governmental charges imposed on it or its income or profits or any of its property, and (ii) all lawful claims for labor, material, and supplies, which,  if unpaid, might become a Lien upon any of its property; provided, however, that neither Borrower nor Guarantor shall be required to pay or discharge any tax, levy, assessment, governmental charge or claim which is being contested in good faith by appropriate proceedings diligently pursued, if adequate reserves have been established, and, should any Collateral be subject to attachment, seizure or forfeiture as the result of such claim, if Borrower or Guarantor has posted a bond issued by a good and solvent surety to insulate or release such Collateral from, or otherwise stay, such process; provided, further, that any claim that constitutes a Lien (other than a Permitted Lien) against the Vessel shall be discharged as provided in the Preferred Mortgage.

Section 6.5 Insurance. Borrower and Guarantor will maintain, with financially sound and reputable insurance companies, workmen's compensation insurance, liability insurance, water quality and pollution insurance and insurance on its properties, assets, and businesses at least in such amounts and against such risks as are usually insured against by Persons engaged in similar businesses, as well as such insurance as may be required in the Security Documents, as applicable. Each insurance policy covering Collateral shall name Lender as an additional insured and loss payee and provide that such policy will not be canceled without thirty (30) days prior written notice to Lender; provided, however, that the loss payee provisions with respect to policies covering the Vessels after their completion and delivery shall comply with the requirements stated in the Preferred Mortgage.

Section 6.6 Inspection Rights. At any reasonable time and from time to time, Borrower and Guarantor will permit representatives of Lender to examine and make copies of the books and records, and visit and inspect the properties, of Borrower and Guarantor, including the Vessel and other Collateral, and to discuss the business, operations, and financial condition of Borrower and Guarantor with their respective officers and employees and with its independent certified public accountants.

Section 6.7 Keeping Books and Records. Borrower and Guarantor will maintain  proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to their business and activities.

Section 6.8 Compliance with Laws. Borrower and Guarantor will comply, in all material respects, with all applicable laws, rules, regulations, orders, and decrees of any court, governmental authority, or arbitrator.

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Section 6.9   Compliance with Agreements. Each of Borrower and Guarantor will comply, in all material respects, with all agreements, contracts, and instruments binding on it or affecting its properties or business.

Section 6.10 Financial Covenants. Until Borrower has paid and performed all of the Obligations, in full, Guarantor, as Parent, and its Subsidiaries shall maintain the following financial covenants on a consolidated basis:

(a) Maximum Consolidated Leverage Ratio. A Consolidated Leverage Ratio of not greater than (A) 4.50:1.00 through the Fiscal Quarter ending June 30, 2014, and (B) 4.25:1.00 as of each Fiscal Quarter-end thereafter, tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

(b) Minimum Liquidity. Liquidity of not less than (A) $15,000,000 through the Fiscal Quarter ending June 30, 2014, and (B) $20,000,000 as of each Fiscal Quarter end thereafter, tested quarterly at the end of each Fiscal Quarter.

(c) Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net Worth, tested quarterly as of the end of each Fiscal Quarter, in an amount of not less than the sum of (A)

$228,000,000, plus (B) 50% of all Consolidated Net Income of Parent and its Subsidiaries, including Borrower, earned after December 31, 201 1 plus (C) 100% of the proceeds of all issuances of Equity Interests (common or preferred) of the Parent and its Subsidiaries (on a consolidated basis) received after December 31, 2011 (other than issuances in connection with the exercise by a present or former employee, officer or director under a stock incentive plan, stock option plan or other equity-based compensation plan or arrangement).

(d) Consolidated EBITDA to Consolidated Interest Expense. A ratio of Consolidated EBITDA to Consolidated Interest Expense of not less than 2.50 to 1.00 tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

(e) Minimum Consolidated Fixed Charge Coverage Ratio. A Consolidated Fixed Charge Coverage Ratio of not less than (A) 1.15:1.00 through the Fiscal Quarter ending June 30, 2014, (B) 1.20:1.00 beginning with the Fiscal Quarter ending September 30, 2014 through the Fiscal Quarter ending June 30, 2015, and (C) 1.25:1.00 as of each Fiscal Quarter end thereafter tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

The calculations of the financial covenants shall be made on a pro forma basis after giving effect to any acquisitions and dispositions such that (i) income statement and cash flow statement items attributable to property disposed of shall be excluded to the extent relating to any period prior to the date of such acquisition, (ii) income statement and cash flow statement items attributable to any entity or property acquired, for the prior four rolling quarters, shall be included to the extent related to any period applicable in such calculations and supported by financial statements or other information satisfactory to the Administrative Agent (or following any termination of the Senior Credit Agreement, satisfactory to Lender), and (iii) any Debt assumed in connection with any such transaction shall be deemed to have been incurred as of the first day of the applicable period.

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Section 6.11 Loan to Value. Until Borrower has paid and performed all of the Obligations, in full, Borrower and Guarantor shall maintain a Loan to Value Ratio not to exceed eighty percent (80%) of the fair market value of the Vessel. The Loan to Value Ratio shall be tested following the first anniversary of the date of the Loan and thereafter as required by Lender (but no more often than semiannually) at the expense of Borrower based upon the total aggregate principal balance then outstanding under the Note and the fair market value of the Vessel as determined by a desktop appraisal performed by an independent, certified marine surveyor or appraiser selected by or otherwise acceptable to Lender. Borrower shall furnish to Lender, promptly upon request, any information concerning the Vessel that may reasonably be required to complete the desktop appraisal. Should Borrower fail to provide to Lender the information necessary to complete the desktop appraisal promptly following a request for such information, or should Lender be required to do so by applicable law, Lender shall be entitled to have the Vessel physically surveyed and appraised at the expense of Borrower (but not more often than annually) by an independent marine surveyor or appraiser selected by Lender to determine if the Loan to Value Ratio required in this Section has been met and to ensure that the Vessel is being maintained as required in this Agreement and the other Loan Documents. Borrower shall make the Vessel available for survey within a reasonable time after notice from Lender that a physical survey will be required under the circumstances outlined in the previous sentence. If any desktop or physical appraisal determines that the Loan to Value ratio required under this Section is not being maintained, Borrower and Guarantor shall, upon demand, either (a) mortgage, pledge, or otherwise grant a first priority lien and security interest in additional Collateral reasonably acceptable to Lender with a fair market value sufficient, or (b) make a prepayment of the Note in an amount determined by Lender to be sufficient, to bring the Loan to Value ratio into compliance.

Section 6.12 Further Assurances. Borrower and Guarantor will execute and deliver such further instruments as may be deemed requested by Lender to carry out the provisions and purposes of this Agreement and the other Loan Documents and to preserve and perfect the Liens of Lender in the Collateral.

ARTICLE 7

Negative Covenants

Borrower and Guarantor jointly and severally covenant and agree that, as long as the Obligations or any part thereof are outstanding, or Lender has any commitment hereunder, Borrower and Guarantor will perform and observe the following negative covenants, unless Lender shall otherwise consent in writing:

Section 7.1 Limitation on Liens. Borrower will not incur, create, assume, or permit to exist any Lien upon the Vessel or other Collateral except for Permitted Liens.

Section 7.2 Prohibition of Sale or Transfer of Collateral. Borrower will not sell, mortgage, assign, pledge, grant a security interest in, lease, charter or otherwise transfer, encumber or dispose of any Collateral except with the prior written consent of Lender, or except as otherwise expressly authorized under the Loan Documents.

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Section 7.3 No Fundamental   Changes.  Neither  Borrower  nor  Guarantor  will  (a) convert  to another form of organization,  or other than a Permitted  Merger  enter into any merger  or consolidation with, or sell or transfer all, substantially all or any substantial portion of its assets to, any  other Person (whether in one transaction or in a series of transactions)  without the prior written consent of Lender, (b) dissolve, liquidate or cease or suspend the conduct of business, or cease to maintain its existence, or (c) permit or suffer a transfer of its equity interests (including by operation of law), or enter into or suffer any transaction or series of transactions, as a result of which there occurs a Change of Control. In no event will Borrower permit the sale or issuance  of any of its equity  interests  to any  Person  if such sale or issuance could reasonably  be expected either to impair or result  in the termination of any waiver of the Marshall Islands citizenship status required for the registry of vessels under the flag of the Republic of the Marshall Islands in the name  of  Borrower  granted  pursuant  to  Section 203 of the Maritime Act, as amended, or to invalidate the Certificate  of Documentation  or  Registry  issued  for the  Vessel  by  the Republic of the Marshall Islands.

ARTICLE S

Default

Section 8.1 Events  of Default. Each of the following shall be deemed an "Event of Default" under this Agreement:

(a) Borrower or Guarantor shall fail to pay any installment of principal or interest payable under the Obligations (including, without limitation, the principal  or interest  payable under this Agreement, the Note or any other Loan Document related hereto), any additional fees, charges, premiums or other sums payable under the Obligations, or the principal or interest or other payments scheduled under any other indebtedness of Borrower or Guarantor to Lender or its Affiliates, within ten (10) days of the date when such payment is due.

(b) Any representation or warranty made or deemed made by Borrower or Guarantor in any Loan Document or in any certificate, report, notice, or financial statement furnished at any time in connection with this Agreement or any other Loan Document shall be false, misleading, or erroneous in any material respect when made or deemed to have been made.

(c) Borrower or Guarantor shall fail to perform, observe, or comply with any covenant, agreement, or term contained in this Agreement or any other Loan Document, or shall otherwise default under any Loan Document (and shall not cure such default, (i) with respect to covenants contained in this Agreement, within thirty days following the date Borrower or Guarantor was obligated to report such default to Lender pursuant to subsection (t) of Section 6.1 or the receipt of notice of such default from Lender, whichever is earlier, or (ii) with respect to covenants or other defaults contained in Loan Documents other than this Agreement, within any period of cure provided in such Loan Documents).

(d) Any of the following events shall occur or exist with respect to Borrower, Guarantor or any Commonly Controlled Entity under ERISA: (i) any Reportable Event shall occur; (ii) complete or partial withdrawal from any Multi-Employer Plan shall take place without the prior written consent of Lender; (iii) any Prohibited Transaction shall occur; (iv) a notice of intent to terminate a Plan shall be filed, or a Plan shall be terminated; or (v) circumstances shall exist that constitute grounds entitling the PBGC to institute proceedings to terminate a Plan or to

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appoint a trustee to administer a Plan, or the PBGC shall institute such proceedings, and, in each case above, such event or condition, together with all other events or conditions, if any, could subject  Borrower  to  any  tax,  penalty  or  other  liability  that  in  the  aggregate  may  exceed

$100,000.00.

(e) If: (i) a release or discharge of any Hazardous Substance or Oil shall occur in, on, under, or from any properties of Borrower or Guarantor in violation of, or Borrower or Guarantor shall be found liable for any remedial action under, any Environmental Law, and any such Person shall have failed to perfonn all remediation required by all domestic or foreign governmental agencies with jurisdiction over such release, discharge or action, within thirty (30) days, or within such greater or lesser time as may be required by any such agencies; (ii) any domestic or foreign governmental agency or other Person asserts a claim against Borrower or Guarantor or any of their respective properties under any Environmental Law, and, as detennined by Lender in its discretion, such claim may have a material adverse effect on the business, condition (financial or otherwise), operations or prospects of Borrower or Guarantor; or (iii) any domestic or foreign governmental agency or other Person asserts or creates a Lien upon any or all of the properties of Borrower or Guarantor on account of a violation of, or liability for remedial action under, any Environmental Law; provided, however, that neither Borrower nor Guarantor shall be deemed to be in default under clause (ii) of this subsection if Borrower or Guarantor is diligently contesting such claim, in good faith, by appropriate legal proceedings, with reasonable prospects of success, or under clause (iii) of this subsection if any such Lien is appropriately bonded or otherwise secured to prevent the arrest, attachment, sequestration or other seizure of the properties affected thereby.

(f) Should Borrower or  Guarantor  become  insolvent,  dissolve  or  cease  to  do business as a going concern, make an offer of settlement, extension or composition to its unsecured creditors generally, make an assignment for the benefit of its creditors, apply for or consent to the appointment of or the taking of possession by a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, file a petition for an order for relief under the United States Bankruptcy Code or under any similar domestic or foreign law relating to bankruptcy, insolvency, reorganization, winding-up or composition  or  adjustment  of debts,  or have such a petition filed against it which is not dismissed within sixty (60) days.

(g) Should a trustee, receiver or custodian be appointed for Borrower or Guarantor or any of their respective property, and should such appointment not be dismissed or stayed within sixty (60) days.

(h) Borrower or Guarantor shall have failed to contest appropriately any seizure, attachment, sequestration or similar proceeding against any of its properties in an  amount  in excess of $I 00,000 in a timely manner; provided however that in the event the continued detention of the property under such warrant, writ or process will have a material adverse effect on the business, condition (financial or otherwise), operations, prospects or  properties  of Borrower or such Guarantor, or if such arrest, seizure, attachment, or sequestration is against any Collateral, then any such arrest, seizure, attachment or sequestration shall be released or appropriately bonded within thirty (30) days, or within such shorter period  as may be provided elsewhere in this Agreement or in the Loan Documents.

LOANAGREEMENT-Page33

(i) Borrower or Guarantor shall fail to appeal within applicable delays, and to satisfy and discharge within thirty (30) days after the exhaustion, lapse or other termination of any right to appeal, any judgment or judgments against it for the payment of money that is not fully covered by insurance (less any applicable deductible or co-payment); provided, however, that for any judgment against Borrower or a Guarantor in excess of $2,000,000, Borrower or such Guarantor shall obtain a supersedeas or appeal bond during the pendency of any appeal from such judgment.

(j) Should Borrower or Guarantor be in default under any material provision of any loan or credit agreement, note, mortgage, security agreement, lease, charter, instrument or other agreement (other than any loan or credit agreement, note, mortgage, security agreement lease, charter, or other agreement covered, at the time of default, under clause (l) below) with respect to borrowed monies or other Debt in excess of $2,000,000 if (i) such default remains uncured after ten ( I0) days from the occurrence thereof or after the expiration of any period of grace contained in such agreement, whichever is greater, and (ii) the relevant creditor has accelerated the obligation or taken other steps to enforce its remedies on default or security interests.

(k) This Agreement or any other Loan Document shall cease to be in full force and effect or shall be declared null and void or the validity or enforceability thereof shall be contested or challenged by Borrower or any of its shareholders or by Guarantor, or Borrower or Guarantor shall deny that it has any further liability or obligation under any of the Loan Documents, or any lien or security interest created by the Loan Documents shall for any reason cease to be a valid, first priority perfected security interest in and lien upon any of the Collateral purported to be covered thereby (subject to Permitted Liens).

(l) Borrower or Guarantor shall default under any loan agreement, credit agreement, note, equipment lease, equipment finance agreement, mortgage, assignment, security agreement, guaranty, hedge agreement or other agreement with Lender or any of its Affiliates.

(m) (m) Should the Approved Time Charter be terminated prior to the expiration of the current term thereof (or prior to the expiration of any renewal term should the charterer thereunder exercise its option to renew the Approved Time Charter during the Term) unless, within three (3) months following the effective date of termination of the Approved Time Charter, Charterer has either (i) entered into a replacement time charter at current market rates for the Vessel for a term at least equal to the remaining term of the Approved Time Charter at the time of termination or (ii) entered into a replacement time charter with economic terms and for a duration otherwise approved by Lender (such approval not to be unreasonably withheld),.

Section 8.2 Remedies Upon Default. If any Event of Default shall occur and be continuing, Lender may without notice terminate its commitment to lend hereunder and declare the Obligations or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable; provided,  however, that upon the occurrence of an Event of Default under Section8.l(f), the commitment of Lender to lend hereunder shall automatically terminate, and the Obligations shall become immediately due and payable, without any declaration or other action by Lender. Borrower and Guarantor hereby jointly and severally waive notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind. If any Event of Default shall occur and be continuing, Lender may exercise all rights and

LOANAGREEMENT-Page34

remedies available to it in law or in equity, under the Loan Documents, or otherwise.

LOANAGREEMENT-Page35

Section 8.3 Performance by Lender. If Borrower or Guarantor shall fail to perform any covenant, duty, or agreement contained in any of the Loan Documents, Lender may perform or attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, Borrower and Guarantor shall, at the request of Lender, promptly pay any amount expended by Lender in such performance or attempted performance to Lender, together with interest thereon at the Default Rate from the date of such expenditure until paid. Notwithstanding the foregoing, it is expressly agreed that Lender shall not have any liability or responsibility for the performance of any obligation of Borrower or Guarantor under this Agreement or any other Loan Document.

ARTICLE 9

Miscellaneous

Section 9.1 Expenses of Lender. Borrower and Guarantor jointly and severally agree to pay Lender on demand: (i) all costs and expenses incurred by Lender in connection with the preparation, negotiation, and execution of this Agreement and the other Loan Documents and any and all amendments, modifications, renewals, extensions, and  supplements  thereof and thereto,  including,  without  limitation, all Attorneys' Fees incurred by Lender; (ii) all costs and expenses reasonably incurred by Lender in connection with the funding and administration of the Loan, including all currency exchange fees and all costs and expenses incurred in inspecting the Vessel or other Collateral; (iii) all  costs  and  expenses incurred by Lender in connection with the enforcement of this Agreement or any other Loan Document, including, without limitation, all Attorneys' Fees incurred by Lender; and (iv) all other costs and expenses incurred by Lender in connection with this Agreement or any other Loan Document, including, without limitation, all costs, expenses, taxes, assessments, filing fees, and  other charges levied  by  any governmental authority or otherwise payable in respect of this Agreement  or any other Loan Document, or in obtaining any mortgagee title insurance policy, survey, audit, or appraisal in respect of the Collateral.

Section 9.2 Indemnification. Borrower  and Guarantor hereby jointly  and  severally agree to defend and indemnify Lender and each Affiliate thereof and  their  respective  officers,  directors, employees, attorneys, and agents from, and hold each of them harmless against, any and all  losses, liabilities, claims, damages, penalties, judgments, costs, and expenses (including attorneys' fees) to which any of them may become subject which directly or indirectly arise from or relate to (i) the negotiation, execution, delivery, performance, administration, or enforcement of any of the Loan Documents, (ii} any of the transactions contemplated by the Loan Documents, (iii) any breach by Borrower or Guarantor  of any representation, warranty, covenant, or other agreement contained in any of the Loan Documents, (iv) the presence, release, threatened release, disposal, removal, or cleanup of any Hazardous Substance or Oil located on, about, within, or affecting any of the properties or assets of Borrower or Guarantor, (v) an unlawful release or threatened release of Hazardous Substances or Oil in, on, about or from the Vessel or other Collateral, or (vi) any investigation, litigation, or other proceeding, including, without  limitation, any threatened investigation, litigation, or other proceeding relating to any of the foregoing. Without limiting any provision of this Agreement or of any other Loan Document, it is the express intention of the parties hereto that each Person to be indemnified under this Section shall be indemnified from and held harmless against any and all losses, liabilities, claims, damages, penalties, judgments, costs, and expenses (including attorneys' fees) arising out of or resulting from the sole or contributory negligence of the Person to be indemnified.

LOANAGREEMENT-Page36

Section 9.3 Limitation of Liability. Neither Lender nor any Affiliate, officer, director, employee, attorney, or agent of Lender shall have any liability with  respect to, and  Borrower and Guarantor each hereby waives, releases, and agrees not to sue any of them upon, any  claim for any special, indirect, incidental, or consequential damages suffered or incurred by Borrower  or Guarantor in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated  by this Agreement or any of the other Loan Documents. Borrower and Guarantor hereby waive, release, and agree not to sue Lender or any of Lender's Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.

Section 9.4 No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained by Lender shall have the right to act exclusively in the interest of Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to Borrower or Guarantor, or to their respective partners, shareholders or members.

Section 9.5 Lender Not Fiduciary. The relationship between Borrower and Guarantor and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower or Guarantor, and no tenn or condition of any of the Loan Documents shall be construed so as to deem the relationship between Borrower and Guarantor and Lender to be other than that of debtor and creditor.

Section 9.6 Equitable Relief. Borrower and Guarantor each recognize that in the event Borrower or Guarantor fail to pay, perfonn, observe, or discharge any or all of the Obligations, any remedy at law may prove to be inadequate relief to Lender. Borrower and Guarantor therefore agree that Lender, if Lender so requests, shall be entitled to seek temporary and pennanent injunctive relief in any such case without the necessity of proving actual damages.

Section 9.7 No Waiver; Cumulative Remedies. No failure on the part of Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by law.

Section 9.8 Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of Lender, Borrower and Guarantor and their respective successors and assigns, except that neither Borrower nor Guarantor may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Lender.

Section 9.9 Survival. All representations and warranties made in this Agreement or any other Loan Document or in any document, statement, or certificate furnished in connection with this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely upon them. Without prejudice to the survival of any other obligation of Borrower or Guarantor hereunder, the obligations of Borrower and Guarantor under Sections 9.2 and 9.3 shall survive repayment of the Obligations and tennination of the Credit Commitment.

LOANAGREEMENT-Page37

Section 9.10 ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL,  ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THEREARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement and the other Loan Documents to which Borrower or Guarantor is a party may be amended or waived only by an instrument in writing signed by the parties hereto.

Section 9.11 Maximum Interest Rate. No provision of this Agreement or any other Loan Document shall require the payment or the collection of interest in excess of the maximum permitted by applicable law. The maximum interest to be charged under this Loan shall be governed by Section 312 of the Maritime Act which provides that loans secured by a preferred mortgage filed or recorded under Chapter 3 of that act may have any rate of interest to which the parties to the mortgage may agree. If any excess of interest in such respect is hereby provided for, or shall be adjudicated to be so provided, in any Loan Document or otherwise in connection with this loan transaction, the provisions of this Section shall govern and prevail and neither Borrower,  nor  any  Guarantor,  nor  any  other  sureties, guarantors, successors, or assigns of Borrower shall be obligated to pay the excess amount of such interest or any other  excess  sum  paid  for  the  use,  forbearance,  or  detention  of  sums   loaned pursuant  hereto. Notwithstanding anything to the contrary contained herein or elsewhere, if at any time the rate of interest payable hereunder, under the Note, or any other Loan Document would  exceed the "Maximum Rate," then for so long as the Maximum Rate would be so exceeded, the rate of interest payable shall be equal to the Maximum Rate. If Lender receives interest hereunder in excess of the Maximum Rate, the excess amount shall be applied ratably to the reduction of the principal balance of the Note, or to other amounts (other than interest) payable hereunder, under such instruments or any other Loan Document, and if no Obligations of Borrower remain outstanding, the balance, if any, will be refunded to Borrower or to such Person as may be entitled thereto. In determining whether or not the interest paid or payable exceeds the Maximum Rate, Borrower, Guarantor and Lender shall, to the extent permitted by applicable law,(i) characterize any non-principal  payment  as an expense,  fee, or premium  rather than  as interest,(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the entire contemplated term of the indebtedness evidenced by the Note so that interest for the entire term does not exceed the Maximum Rate.

Section 9.12 Notices. All notices and other communications provided for in this Agreement and the other Loan Documents to which Borrower or Guarantor is a party shall be given or made in writing and telecopied, mailed by certified mail return receipt requested, or delivered by hand or by Federal Express, UPS, DHL or other recognized, national overnight courier to the intended recipient at the "Address for Notices" specified below; or, as to any party, at such other address as shall be designated by such party in a notice to the other party given in accordance with this Section.

Addresses for Notices:

LOANAGREEMENT-Page38

Borrower and Guarantor:

[Borrower or Guarantor]

1 1 North Water St., Suite 18290

Mobile, Alabama 36602

Facsimile: (251) 706-0756

Attention: Chief Financial Officer

Lender:

RBS Asset Finance, Inc.

71 South Wacker Drive, 2911i Floor Mailstop 1H2935

Chicago, Illinois 60606

Facsimile: L_).._

Attention: ----------

Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopy (provided that written confirmation of such notice is forwarded by the sender by first class mail, postage prepaid, to the appropriate address above), when deposited with a recognized overnight courier service, freight prepaid, for delivery on the following Business Day, when personally delivered or, in the case of a mailed notice, when duly deposited in the mails, in each case given or addressed as aforesaid; provided, however, that Advance Requests or other communications to Lender pursuant to Article 2 shall not be effective until received by Lender.

Section 9.13 Applicable Law; Venue; Service of Process. This Agreement shall be governed by and construed in accordance with the Maritime Act of the Republic of the Marshall Islands and the laws of the United States of America, to the extent applicable, and otherwise in accordance with the laws of the State of New York without regard to is principles of conflicts of laws. This Agreement has been entered into in Chicago, Illinois, and it shall be deemed to be performed for all purposes in Chicago, Illinois. Any action or proceeding against Borrower or Guarantor under or in connection with any of the Loan Documents may be brought in any state or federal court in or for Chicago, Illinois. Borrower and Guarantor each hereby irrevocably (i) submits to the nonexclusive jurisdiction of such courts, and (ii) waives any objection they may now or hereafter have as to the venue of any such action or proceeding brought in any such court or that any such court is an inconvenient forum. Borrower and Guarantor agree that service of process upon them may be made by certified or registered mail, return receipt requested, at the address specified above. Nothing herein or in any of the other Loan Documents shall affect the right of Lender to serve process in any other manner permitted by law or shall limit the right of Lender to bring any action or proceeding against Borrower or Guarantor or with respect to any of their property in courts in other jurisdictions. Any action or proceeding by Borrower or Guarantor against Lender shall be brought only in a court located in ajudicial district encompassing Chicago, Illinois.

Section 9.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 9.15 Severability. Any provision of this Agreement that may be held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.

LOANAGREEMENT-Page39

Section 9.16 Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

Section 9.17 Participations. Lender shall have the right at any time and from time to time to grant participations or to syndicate participations in, or to assign in full or in part, this Agreement and any other Loan Documents. Should any assignment transfer less than the entirety of the Obligations, this Agreement shall continue to apply to the Obligations retained by Lender as well as to those assigned, and this Agreement may be separately enforced by both Lender and its assignee with respect to that portion of the Obligations then held by them. Each actual or proposed participant or assignee shall be entitled to receive all information received by Lender regarding the creditworthiness of Borrower and Guarantor, including, without limitation, information required to be disclosed to a participant pursuant to Banking Circular 181 (Rev., August 2, 1984), issued by the Comptroller of the Currency (whether the actual or proposed participant is subject to the circular or not). Borrower and Guarantor each hereby authorize Lender to disclose any and all financial information on Borrower and Guarantor compiled by Lender in connection with the Loan to any proposed participant or assignee, and Borrower and Guarantor hereby agree to cooperate with Lender in effecting the participation, including the scheduling of on-site visits to their respective facilities, and promptly responding to all questions concerning the operations of Borrower and Guarantor, provided that each such proposed participant or assignee has agreed, in writing, in a form reasonably acceptable to Borrower and Guarantor, to hold such information in confidence.

Section 9.18 Construction. Borrower, Guarantor and Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as ifjointly drafted by Borrower, Guarantor and Lender.

Section 9.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND GUARANTOR HEREBY IRREVOCABLYAND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

Borrower:

LCI SHIPHOLDINGS, INC.

By:/s/ David Drake

Name:  David Drake

Title: Vice President and Treasurer

Guarantor:

LOANAGREEMENT-SignaturePage

INTERNATIONAL SHIPHOLDING CORPORATION

By: /s/ David Drake

Name:  David Drake

Title:  Vice President and Treasurer

Lender:

RBS ASSET FINANCE, INC.

By: _______________________________

Name:

Title:

1767568_3

LOANAGREEMENT-SignaturePage

IN  WITNESS  WHEREOF,  the parties  hereto have duly executed  this Agreement  as of the day and year first above written.

Borrower:

LCI SHIPHOLDINGS, INC.

By: _________________________

Name:  David Drake

Title: Vice President and Treasurer

Guarantor:

INTERNATIONA L SHIPHOLDING CORPORATION

By: _________________________

Name: David Drake

Title: Vice President and Treasurer

Lender:

RBS ASSET FINANCE, INC.

By: /s/ Janet Melancon

Name:Janet Melancon

Title:Vice President

1767568_3

LOANAGREEMENT-SignaturePage

EX-10.12

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT (this "Amendment"), dated as of October 31, 2014, to that certain LOAN AGREEMENT dated as of August 25, 2014 is executed by and among LCI SHIPHOLDINGS, INC., a non-resident corporation organized under the laws of the Republic of the Marshall Islands, with offices at 11 North Water St., Suite 18290, Mobile, Alabama 36602 ("Borrower"), INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized under the laws of Delaware, with offices at 11 North Water St., Suite 18290, Mobile, Alabama 36602 (together with its successors and permitted assigns, "Guarantor"), and CITIZENS ASSET FINANCE, INC. (f/k/a RBS Asset Finance, Inc.), a New York corporation, with offices at 71 South Wacker Drive, 29th Floor, Mailstop IH2935, Chicago, Illinois 60606 (together with its successors and assigns, "Lender").

RECITALS:

WHEREAS, the Loan Agreement was executed and delivered by Borrower, Guarantor and Lender to establish the terms and conditions pursuant to which Lender would open a term loan credit facility in favor of Borrower with available credit thereunder in a principal amount of up to TWENTY-THREE MILLION FORTY THOUSAND AND NO/100 Dollars ($23,040,000.00) in order to refinance certain indebtedness of Borrower under the DNB Credit Agreement (as defined in the Loan Agreement), which debt was secured by a preferred mortgage lien and security interest against the Marshall Islands-flagged vessel, GREEN DALE, Official Number 5236, IMO Number 9181376 (the "Vessel") and to fund a portion of the acquisition price payable by Waterman Steamship Corporation, an Affiliate of Borrower and of Guarantor, in connection with the early termination of a bareboat charter of a sister ship of the Vessel; and

WHEREAS, Borrower and Guarantor have agreed to amend certain of the financial covenants of the Loan Agreement to conform with those in force under the senior credit facility in favor of Guarantor, the parent of Borrower; and

WHEREAS, Lender has agreed to amend the financial covenants as requested provided that Borrower and Guarantor execute an amendment to the Loan Agreement reflecting the changes to the financial covenants and pay to Lender a fee for such amendment of $23,040.00 (0.10% of the original principal amount of the Loan).

NOW THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower, Guarantor and Lender hereby agree as follows:

The following amendments to the Loan Agreement are effective as of the date hereof:

1.Section 6.10 of the Loan Agreement is amended and restated to read, in its entirety, as

follows:

Section 6.10Financial Covenants. Until Borrower has paid and performed all

of the Obligations, in full, Guarantor, as Parent, and its Subsidiaries shall maintain the following financial covenants on a consolidated basis:

(a)Maximum Consolidated Leverage Ratio. A Consolidated

Leverage Ratio of not greater than (A) 4.50:1.00 through the Fiscal Quarter ending June 30, 2014, (B) 5.00:1.00 beginning with the Fiscal Quarter ending

September 30, 2014 through the Fiscal Quarter ending December 31, 2015, (C) 4.75:1.00 for the Fiscal Quarter ending March 31, 2016, (D) 4.50:1.00 beginning with the Fiscal Quarter ending June 30, 2016 through the Fiscal Quarter ending September 30, 2016, and (E) 4.25:1.00 as of each Fiscal Quarter-end thereafter, tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

(b) Minimum Liquidity. Liquidity of not less than (A) $15,000,000 through the Fiscal Quarter ending June 30, 2014, and (B) $20,000,000 as of each Fiscal Quarter end thereafter, tested quarterly at the end of each Fiscal Quarter.

(c) Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net Worth, tested quarterly as of the end of each Fiscal Quarter, in an amount of not less than the sum of (A) $228,000,000, plus (B) 50% of all Consolidated Net Income of Parent and its Subsidiaries, including Borrower, earned after December 31, 2011 plus (C) 100% of the proceeds of all issuances of Equity Interests (common or preferred) of the Parent and its Subsidiaries (on a consolidated basis) received after December 31, 2011 (other than issuances in connection with the exercise by a present or former employee, officer or director under a stock incentive plan, stock option plan or other equity-based compensation plan or arrangement).

(d) Consolidated EBITDA to Consolidated Interest Expense. A ratio of Consolidated EBITDA to Consolidated Interest Expense of not less than 2.50 to 1.00 tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

(e) Minimum Consolidated Fixed Charge Coverage Ratio. A Consolidated Fixed Charge Coverage Ratio of not less than (A) 1.15:1.00 through the Fiscal Quarter ending June 30, 2014, (B) 1.10:1.00 beginning with the Fiscal Quarter ending September 30, 2014 through the Fiscal Quarter ending December 31, 2014, (C) 1.15:1.00, beginning with the Fiscal Quarter ending March 31, 2015 through the Fiscal Quarter ending December 31, 2015, (D) 1.20:1.00, beginning with the Fiscal Quarter ending March 31, 2016 through the Fiscal Quarter ending June 30, 2016„ and (E) 1.25:1.00 as of each Fiscal Quarter end thereafter tested quarterly at the end of each Fiscal Quarter based on the four most recent Fiscal Quarters for which financial information is available.

The calculations of the financial covenants shall be made on a pro forma basis after giving effect to any acquisitions and dispositions such that (i) income statement and cash flow statement items attributable to property disposed of shall be excluded to the extent relating to any period prior to the date of such acquisition, (ii) income statement and cash flow statement items attributable to any entity or property acquired, for the prior four rolling quarters, shall be included to the extent related to any period applicable in such calculations and supported by financial statements or other information satisfactory to the Administrative Agent (or following any termination of the Senior Credit Agreement, satisfactory to Lender), and (iii) any Debt assumed in connection with any such transaction shall be deemed to have been incurred as of the first day of the applicable period.

The execution and delivery of this Amendment has been duly authorized, and all conditions and requirements have been satisfied and performed that are necessary to make this Amendment a valid and binding agreement, and to effect the amendment of the Loan Agreement as provided herein.

All of the warranties, representations, covenants and agreements of Borrower and Guarantor, and all the rights, immunities, powers and the remedies of Lender, that are set forth in the Loan Agreement are incorporated herein and shall apply with the same force and effect as though set forth at length in this Amendment.

This Amendment shall be construed in connection with and as part of the Loan Agreement. Capitalized terms not otherwise defined herein that are defined in the Loan Agreement are used herein with such defined meanings. If for any reason this Amendment, or any part hereof, shall be declared invalid or unenforceable for any reason whatsoever, such invalidity or unenforceability shall not be deemed to affect the validity or enforceability of the Obligations, any other Loan Document, or the remaining portions of this Amendment.

Except as expressly amended hereby, all provisions of the Loan Agreement remain in full force and effect. The Loan Agreement, as amended by this Amendment, and all Loan Documents related thereto, as further amended pursuant to this Amendment, be and are hereby ratified and affirmed.

This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall be deemed one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have duly executed this First Amendment to Loan Agreement to be effective as of the day and year first above written.

Borrower:

LCI SHIPHOLDINGS, INC.

By: /s/ D.B. Drake

Name: David Drake

Title: Vice President and Treasurer

Guarantor:

INTERNATIONALSHIPHOLDING CORPORATION

By: /s/ D.B. Drake

Name: David Drake

Title: Vice President and Treasurer

Lender:

CITIZENS ASSET FINANCE, INC. (f/k/a RBS Asset Finance, Inc.)

By: /s/ S. Perakis

Name: Soula Perakis

Title: Vice President

EX-10.13

CREDIT AGREEMENT PROVIDING FOR A

SENIOR SECURED TERM LOAN

OF UP TO US$38,500,000

WATERMAN STEAMSHIP CORPORATION,

as Borrower, AND

The Banks and Financial Institutions listed on Schedule I hereto, as Lenders,

AND

DVB BANK SE,

as Mandated Lead Arranger, Facility Agent and Security Trustee, AND

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

August 26, 2014

[Acknowledgment PagetoMortgage]

[Acknowledgment PagetoMortgage]

[Acknowledgment PagetoMortgage]

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TABLE OF CONTENTS

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1	DEFINITIONS	1
1.1	Specific Definitions	1
1.2	Computation of Time Periods; Other Definitional Provisions	18
1.3	Accounting Terms	18
1.4	Certain Matters Regarding Materiality	18
2	REPRESENTATIONS AND WARRANTIES	18
2.1	Representations and Warranties	18
3	THE FACILITY	23
3.1	Purposes	23
3.2	Receipt of Funds	23
3.3	Drawdown Notice	23
3.4	Effect of Drawdown Notice	24
4	CONDITIONS  PRECEDENT	24
4.1	Conditions Precedent to this Agreement.	24
4.2	Breakfunding Costs	28
4.3	Satisfaction after Drawdown	28
5	REPAYMENT AND PREPAYMENT	28
5.1	Repayment	28
5.2	Voluntary Prepayment; No Re-borrowing	28
5.3	Mandatory  Prepayment	28
5.4	Interest and Costs with Prepayments/Application of Prepayments	29
5.5	Borrower's Obligation Absolute	29
6	INTEREST AND RATE	29
6.1	Payment of Interest; Interest Rate	29
6.2	Maximum Interest	29
7	PAYMENTS	29
7.1	Time and Place of Payments, No Set Off	29
7.2	Taxes	30
7.3	Sharing of Setoffs	31
7.4	Computations; Banking Days	31
8	Event  OF DEFAULT	31
8.1	Events of Default	31
8.2	Application of Moneys	34
9	COVENANTS	34
9.1	Affirmative Covenants	34

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9.2	Negative Covenants	40
9.3	Financial Covenants	42
9.4	Asset Maintenance	43
10	ACCOUNTS	44
10.1	General	44
10.2	Payment of Earnings	44
10.3	Monthly Retentions	44
10.4	Debt Service Letter of Credit	44
10.5	Shortfall in Earnings	44
10.6	Transfers from Retention Account; Application of Retentions	45
10.7	Location of Accounts	45
10.8	Debits for Expenses	45
10.9	Borrower's Obligations Unaffected	45
11	GUARANTEE	45
11.1	The Guarantee	45
11.2	Obligations Unconditional	46
11.3	Reinstate1nent.	46
11.4	Subrogation	47
11.5	Ren1edies	47
11.6	Joint, Several and Solitary Liability	47
11.7	Continuing Guarantee	47
12	ASSIGNMENT	47
12.1	Generally	47
12.2	Assignment by Security Parties	47
12.3	Assignment by Lender	50
13	ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC	51
13.1	Illegality	51
13.2	Increased Costs	51
13.3	Lender's Certificate Conclusive	52
13.4	Compensation for Losses	52
14	CURRENCY INDEMNITY	52
14.1	Currency Conversion	52

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14.2	Change in Exchange Rate	52
14.3	Additional Debt Due	52
14.4	Rate of Exchange	52
15	FEES AND EXPENSES	53
15.1	Fees	53

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15.2	Expenses	53
16	APPLICABLE LAW, JURISDICTION AND WAIVER	53
16.1	Applicable Law	53
16.2	Jurisdiction	53
16.3	WAIVER OF IMMUNITY	53
16.4	WAIVER OF JURY TRIAL	54
17	THE AGENTS	54
17.1	Appointment of Facility Agent	54
17.2	Appointment of Security Trustee	54
17.3	Distribution of Payments	54
17.4	Holder of Interest in Note	55
17.5	No Duty to Examine, Etc	55
17.6	Agents as Lenders	55
17.7	Acts of the Agents	55
17.8	Certain Amendments	55
17.9	Assumption regarding Event of Default	56
17.10	Limitations of Liability	56
17.11	Indemnification of the Facility Agent and Security Trustee	56
17.12	Consultation with Counsel	57
17.13	Resignation	57
17.14	Representations of Lenders	57
17.15	Notification of Event of Default	57
17.16	Reversal of Redistribution	57
17.17	Parallel Debt	57
18	NOTICES AND DEMANDS	58
18.1	Notices	58
19	MISCELLANEOUS	59
19.1	Right of Set-off	59
19.2	Time of Essence	59

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19.3	Unenforceable, etc., Provisions - Effect	59
19.4	References	60
19.5	Further Assurances	60
19.6	Prior Agreements, Merger.	60
19.7	Entire Agreement; Amendments	60
19.8	Indemnification	60
19.9	USA PATRIOT Act Notice; OFAC and Bank Secrecy Act.	61
19.10	Remedies Cumulative and Not Exclusive; No Waiver	61
19.11	Counterparts; Electronic Delivery	61

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19.12	Headings	61
19.13	Disclosure	62

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SCHEDULES
I	The Lenders and the Commitments
II	Approved Ship Brokers
III	Liens
IV	Indebtedness
V	Initial Charter Party Agreement
EXHIBITS
A	Form of Promissory Note
B	Form of Drawdown Notice
C	Form of Compliance Certificate
D	Form of Assignment and Assumption Agreement
E	Form of Earnings and Charter parties Assignment
F	Form of Insurances Assignment
G-1	Form of U.S. First Preferred Mortgage
G-2	Form of Marshall Islands First Priority Continuation Mortgage
H-1	Classification  Society Instruction Letter
H-2	Classification  Society Undertaking I-1
I-1	Form of Earnings Account Pledge
I-2	Form of Retention Account Pledge
J	Form of Manager's Undertaking
K	Form of Asset Maintenance Compliance Certificate
L	Form of Omnibus Assignment and Assumption Agreement
M	Form of Loan Administration Form

SENIOR SECURED TERM LOAN CREDIT AGREEMENT

THIS  SENIOR  SECURED  TERM  LOAN  CREDIT AGREEMENT  (this  "Agreement")  is made  as of the 26111  day of August, 2014, by and among (1) WATERMAN  STEAMSHIP  CORPORATION, a corporationincorporated and existing under the laws of the State of New  York ("Waterman Steamship"), as borrower (the "Initial Borrower"), (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing  under the laws of the State of Delaware, as guarantor (the "Guarantor"),  (3) the banks and financial institutions listed on Schedule I, as lenders (together with any bank or financial institution which becomes a  Lender pursuant to Section 12, the "Lenders" and each a "Lender"), (4) DVB BANK SE, as facility agent (in such capacity including any successor thereto, the "Facility Agent"), and as security trustee for the Lenders (in such capacity, the "Security Trustee" and, together with the Facility Agent, the "Agents") and (5) DVB BANK SE, as mandated lead arranger (in such capacity, the "Mandated Lead Arranger").

WITNESSETH  THAT:

WHEREAS, at the request of the Borrower, each of the Agents has agreed to serve in the capacity under the terms of this Agreement and the Lenders have agreed to provide to the Borrower a senior secured term loan facility in the amount of up to Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000);

NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt  and adequacy  of which are hereby acknowledged, the parties hereto agree as set forth below:

1.DEFINITIONS

1.1Specific  Definitions.   In this Agreement  the words  and expressions  specified below  shall, except where the context otherwise requires, have the meanings attributed to them below:

"Acceptable Accounting  Firm"	shall mean PricewaterhouseCoopers LLP, or such other Securities and Exchange Commission recognized accounting firm as shall be approved by the Facility Agent, such approval not to be unreasonably withheld;
"Account  Pledge"	shall mean the German law-governed pledge of the Earnings Account and the Retention Account to be executed  by  the Borrower  in  favor  of  the  Security  Trustee  pursuant  to  Section 4.l (s)(iii) substantially in the form set out in Exhibit I-1 or I-2;
"Advance"	shall mean the amount of the Facility advanced to the Borrower pursuant to Section 3.1;
"Affiliate"	shall mean with respect to any Person, any other Person directly or indirectly controlled by  or under common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as applied to any Person means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of that Person whether through ownership of voting securities or by contract or otherwise;
"Agents"	shall have the meaning ascribed thereto in the preamble;
"Agreement"	shall mean this  Agreement, as the same shall be amended, restated, modified or supplemented from time to time;

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"Applicable Rate"	shall mean the rate of interest applicable to the Facility per annum, which is equal to the rate notified to the Borrower on the Drawdown Date plus Mandatory Costs (if applicable);
"Approved Charter"	shall mean the Initial Charter Party Agreement and any other charter party to be entered with an internationally recognized PCTC operator acceptable to the Facility Agent (such consent not to be unreasonably withheld); provided, that such  other  charter party has charter hire rates that are comparable to the then current market charter hire rates for similar vessels and having other prevailing market terms;
"Approved Jurisdiction"	shall mean the United States, the Republic of Marshall Islands or such other jurisdiction acceptable to the Facility Agent (such acceptance not to be unreasonably withheld);
"Approved Ship Broker"	shall mean any of the ship brokers listed on Schedule II;
"Asset Maintenance Compliance Certificate"	shall mean a certificate ce1iifying as of the last day of the second and fourth quarter of the Borrower's fiscal year the compliance by the Borrower with the covenants contained in Section 9.4 and showing the calculations thereof in reasonable detail, delivered by the chief financial officer of the Guarantor to the Facility Agent from time to time pursuant to Section 9.1(d)(iii) in the form set out in Exhibit K or in such other form as the Facility Agent may agree;
"Assigned Moneys"	shall mean any and all sums assigned to the Security Trustee pursuant to the Earnings and Charterparties Assignment and the Insurances  Assignment;
"Assignment and Assumption Agreement(s)"	shall mean any Assignment and Assumption  Agreement(s) executed pursuant to Section 12.3 substantially in the form set out in Exhibit D;
"Assignment Notices"	shall mean (a) the notice with respect to the Earnings and Charter parties Assignment  substantially in the form set out in Exhibit 1 thereto, and (b) the notice with respect to the Insurances Assignment substantially in the form set out in exhibits thereto;
"Assignments"	shall mean the Earnings and Charter parties Assignment and the Insurances  Assignment;
"Attributable Principal Amount"	shall mean (a) in the case of Synthetic Leases, an amount determined by capitalization of the remaining lease payments thereunder as if it were a Capital Lease determined in accordance with GAAP, and (b) in the case of asset securitization programs, the outstanding principal amount of such financing,  after taking into account reserve amounts and making appropriate adjustments, determined by the Facility Agent in its reasonable judgment;
"Availability Period"	shall mean the period of time beginning on the Closing Date and ending on the earlier of (a) the date on which the Advance is made pursuant to Section 3 and (b) September 30, 2014;

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"Banking  Day(s)" shall mean any day that is not a Saturday, Sunday or other day on which (a) banks in London, England, Frankfurt, Germany, New York, New York are authorized or required by law to remain closed, or (b) banks are not generally open for dealing in dollar deposits in the London interbank market;

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"Blocked  Person"	shall mean any of the following currently or in the future: (i) an individual, entity or vessel named on a Blocked Persons List, or any entity owned or controlled by, directly or indirectly, such individual, entity or vessel, or (ii) (A) an agency or instrumentality of, or an entity owned or controlled by, or acting on behalf of or at the direction of, directly or indirectly, the government of any country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria) (each, a "Sanctioned Country"), (B) an entity located, resident in or organized under the laws of a Sanctioned Country, or (C) a national or permanent resident of a Sanctioned Country, or a person located or residing  in  a Sanctioned Country, to the extent such agency, instrumentality, entity, or person is targeted by Sanctions, or  (iii)  without duplication of any Person set forth in clause (i) or (ii), any Person located or residing in, organized under the laws of, or operating in a Sanctioned Country;
"Blocked Persons List"	shall mean the "Specially Designated Nationals List and Blocked Persons List" maintained by OFAC and any other similar or equivalent published list of individuals or entities maintained by a Governmental Authority, as the same may be amended, supplemented or substituted from time to time;
"Borrower"	shall mean (i) prior to the Vessel Transfer, the Initial Borrower or (ii)upon the Vessel Transfer pursuant to Section 12.2(b), the Ultimate Borrower;
"Capital Expenditures"	shall mean with respect to the Guarantor and the Subsidiaries, on a consolidated basis, for any period (without duplication), any expenditure for fixed assets or that is properly chargeable to capital account in accordance with GAAP;
"Capital Lease"	shall mean, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person;

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"Cash  Equivalents"	means, as at any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally guaranteed   as  to  interest   and  principal   by  the  United   States government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1)   year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody's; (c) commercial paper maturing no  more  than  one  (1) year from the date of creation thereof  and having, at the time of the acquisition thereof, a rating of at least A-1 from  S&P or  at least P-I from Moody's; (d) certificates of deposit or bankers' acceptances maturing within one (1) year after such date  and issued or accepted by (x) any Lender, (y) any foreign lending institution so long as it holds Indebtedness of the Guarantor or its Subsidiaries or (z) by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least "adequately capitalized" (as defined in the regulations of its primary federal or other applicable banking regulator), and (ii) has Tier 1 capital (as defined  in  such regulations, or the equivalent foreign regulations, if applicable) of not less than $100,000,000; (e) shares of any money  market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody's; (f) overnight repurchase investments and overnight Eurodollar sweep investments; and (g) corporate bonds maturing within one (1) year after such date and having a rating of at least A- from S&P or at least A3 from Moody's; provided that, for purposes of this Agreement, such corporate bonds  shall be valued at a margin of 90% thereof;
"Change of Control"	shall mean (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the existing owners, becoming the beneficial owner (as defined in Rules 13d-3 under the Exchange Act), directly or indirectly, of more than 30% of the total voting power of the Guarantor or (b) the Guarantor ceases to own directly 100% of the Borrower or (c) the Board of Directors of the Guarantor ceases to consist of a majority of the directors existing on the date hereof or directors nominated by at least two thirds (2/3) of the then existing directors;
"Classification  Society"	shall mean American Bureau of Shipping or any other member  of the International Association of Classification Societies reasonably acceptable to the Lenders (with whom the Vessel is entered and who conducts periodic physical surveys and/or inspections of the Vessel);
"Closing Date"	shall mean the day and year first written above;
"Code"	shall mean the Internal Revenue Code of 1986, as amended, and any successor statute and regulation promulgated thereunder;

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"Collateral"	shall mean, all property or other assets, real or personal, tangible or intangible, whether now owned or hereafter acquired in which the Security Trustee or any  Lender has been granted a  security interest pursuant to a Security Document or this Agreement;
"Commercial  Manager"	shall  mean  Borrower  or  such  other  manager  acceptable  to  the Facility Agent;
"Commodity Exchange Act"	shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute;
"Commitment(s)"	shall mean in relation to a Lender, the portion of the Facility set out opposite its name in Schedule I hereto or, as the case may be, in any relevant Assignment and Assumption Agreement, as changed from time to time pursuant to the terms of this Agreement;
"Compliance Certificate"	shall mean a certificate certifying the compliance by each of the Security Parties with all of its covenants contained herein and showing the calculations thereof in reasonable detail, delivered by the chief financial officer of the Guarantor to the Facility Agent from time to time pursuant to Section 9.1(d) in the form set out in Exhibit C or in such other form as the Facility Agent may agree;
"Consolidated EBITDA"	shall mean, for any period, with respect to the Guarantor and its Subsidiaries,  the  sum  of  (without  duplication)  (a)  Consolidated Net Income; (b) all Consolidated Interest Expense of  the Guarantor and its Subsidiaries; (c) income taxes of the Guarantor and its Subsidiaries; and (d) depreciation and amortization of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP for such period; provided that if any Subsidiary is not wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (i) the amount of Consolidated Net Income attributable  to  such  Subsidiary multiplied by (ii) the percentage ownership interest in the income of such Subsidiary not owned by the Guarantor on the last day of such period; provided, however, that if any acquisition or disposition of assets permitted to be made under this Agreement (other than non-material acquisitions or dispositions  in  the ordinary course of business,  each with a total  value  of less than $2,000,000) occurs during such period of determination, Consolidated EBITDA for such period shall be calculated on a pro forma basis to give effect to such acquisition or disposition as if each such acquisition or disposition has been consummated on the first day of such period; provided, further that Consolidated EBITDA based on any such acquisition shall only be based on contracted cash flow;
"Consolidated EBITDAR"	shall mean, with respect to the Guarantor and its Subsidiaries, on a consolidated basis, for any period (without duplication) the sum of (i) Consolidated EBITDA for such period and (ii) Consolidated Lease Expense for such period;

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"Consolidated Fixed Charge Coverage Ratio"	shall mean, as of any date of determination, the ratio of (a) Consolidated EBITDAR  for the period  of the four fiscal quarters of the Guarantor most recently ended, minus taxes paid in cash during such period, minus maintenance Capital Expenditures for such period to (b) Consolidated Fixed Charges  for the period  of the four fiscal quarters of the Guarantor most recently ended; provided that maintenance Capital  Expenditures  shall  be calculated at (x) 30% of  consolidated  depreciation  expense through  the  Guarantor's  fiscal   year  ending December  31,  2013, (y) 40% of consolidated depreciation expense through the Guarantor's fiscal quarter ending June 30, 2014 and (z) 50% of consolidated depreciation expense at all times thereafter;
"Consolidated Fixed Charges"	means with respect to the Guarantor and the Subsidiaries, on a consolidated basis, for any period (without duplication), the sum of (i) Consolidated Interest Expense for such period; (ii) Consolidated Lease Expense for such period; (iii) scheduled principal payments for any outstanding Indebtedness during the applicable period, and (iv) the amount of cash dividends and other distributions made by the Guarantor during such period (other than dividends paid on common stock of the Guarantor in such period in an amount up to $10,000,000). For purposes of this definition, "scheduled principal payments" (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments made during the applicable period, (b) shall be deemed to include the Attributable Principal Amount in respect of asset securitization programs and Synthetic Leases and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.11 of the Regions Credit Agreement;
"Consolidated Interest Expense"	shall mean, with respect to the Guarantor and the Subsidiaries, on a consolidated basis, for any period (without duplication), interest expense, whether paid or  accrued  (including   the  interest component of asset securitization programs and Synthetic Leases), on all Indebtedness of the Guarantor and its Subsidiaries for such period, net of interest income, all determined in accordance with GAAP;
"Consolidated Lease Expense"	shall mean with respect to the Guarantor and its Subsidiaries, on a consolidated basis, for any period (without  duplication),  all amounts payable under any leases (whether Capital Leases or operating leases) and time charter agreements which may be classified as operating lease expenses, charter hire expenses or rent as determined in accordance with GAAP during the period in question;
"Consolidated Lease Adjusted Indebtedness"	shall mean the sum of (i) all Indebtedness of the Guarantor and its Subsidiaries (other than obligations under any Swap Contract) detem1ined on a consolidated basis in accordance with GAAP and (ii)   the product of 6 times the Consolidated Lease Expense of the Guarantor and its Subsidiaries for the past 12 months determined on a consolidated basis in accordance with GAAP;
"Consolidated Tangible Net Worth"	shall mean, with respect to the Guarantor and its Subsidiaries, at any date for which a dete1111ination is to be made (determined on a consolidated basis without  duplication in accordance with GAAP) (a)  total stockholders' equity minus (b) goodwill;

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"Consolidated Leverage Ratio"	shall mean, as of any date of detem1ination, the ratio of (a) Consolidated Lease Adjusted Indebtedness as of such date to (b) Consolidated EBITDAR for the period  of the four fiscal quarters of the Guarantor most recently ended.
"Consolidated  Net Income"	shall mean, for any period, the consolidated net income of the Guarantor and its Subsidiaries for such period, as shown on the consolidated financial statements of the Guarantor and its Subsidiaries delivered  in accordance with Section 9.l (d).
"Creditor(s)"	shall mean, together, the  Mandated Lead Arrangers,  the  Agents and the Lenders, each a "Creditor";
"Debt Service"	shall mean the scheduled principal amortization payments, the scheduled interest payments  and payment of any  fees  payable under the Transaction Documents;
"Debt Service Letter of Credit"	shall have the meaning ascribed thereto in Section 10.4;
"Default"	shall mean any event that would, with the giving of notice or passage of time, or both, be an Event of Default;
"Default Rate"	shall mean a rate per annum equal to two percent (2%) over the Applicable Rate;
"DOC"	shall mean a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code;
"Dollars" and the sign "$"	shall mean the legal currency, at any relevant time hereunder, of the United States of America and, in relation to  all payments hereunder, in same day funds settled through the New York Clearing House Interbank Payments System (or such other Dollar funds as may be determined by the Facility Agent to be customary for the settlement in New York City of banking transactions of the type herein involved);
"Drawdown Date"	shall mean the date, being a Banking Day, upon which the Borrower has requested that the Facility be made available to the Borrower, and the Facility is made available to the Borrower, as provided in Section 3;
"Drawdown  Notice"	shall have the meaning ascribed thereto in Section 3.3;

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"Earnings"	means, in relation to the Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or the Security Trustee (net of charter commissions payable in respect of the Vessel) and which arise out of the use or operation of the Vessel, including (but not limited to): (a)    except to the extent that they fall within paragraph (b):    (i)     all freight, hire and passage moneys;    (ii)    compensation payable to the Borrower or the Security Trustee in the event of requisition of the Vessel for hire;    (iii)   remuneration for salvage and towage services;    (iv)   demurrage and detention moneys;    (v)    damages for breach (or payments for  variation or termination) of any charterparty  or  other  contract for the employment of the Vessel; and    (vi)   all moneys which are at any time payable under Insurances in respect of loss of hire; and (b)    if and whenever, with the consent of the Facility Agent, the Vessel is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other Person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel;
"Earnings Account"	shall mean (i) prior to the Vessel Transfer, the bank account no. 2910053679 maintained in the name of the Initial Borrower and (ii) upon the Vessel Transfer, the bank account no. 2910053652 maintained in the name of the Ultimate Borrower, in each case, with DVB Bank SE (Frankfurt);
"Earnings and Charterparties Assignment"	shall mean the first priority assignment of Earnings, charterparties and requisition compensation in respect of (i) the Earnings of the Vessel from any and all sources (including requisition compensation) and (ii) any charter or other contract relating to the Vessel, to be executed by the Borrower in favor of the Security Trustee pursuant to Section 4.l(s)(i), substantially in the form set out in Exhibit E;
"Environmental Affiliate(s)"	shall mean, with respect to a Security Party, any Person or entity, the liability of which for Environmental  Claims any Security Party may have assumed by contract or operation of law;
"Environmental Approval(s)"	shall have the meaning ascribed thereto in Section 2.1(q);
"Environmental Claim(s)"	shall have the meaning ascribed thereto in Section 2.1(q);
"Environmental Law(s)"	shall have the meaning ascribed thereto in Section 2.1(q);
"ERISA"	shall mean the Employee Retirement Income Security Act  of 1974, as amended, and any successor statute and regulation promulgated  thereunder;
"ERISA  Affiliate"	shall mean a trade or business (whether or not incorporated) which is under common control with any Security Party or any of their respective  subsidiaries within the meaning of Sections 4 l 4(b), (c), (m) or (o) of the Code or which would be considered a member of a "controlled group" with any Security Party or any of their respective subsidiaries under Section 4001 of ERISA;

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"ERISA Funding Event"	shall mean (i) any failure by any Plan to satisfy the minimum funding standards (for purposes of Section 412 of the Code or Section 302 of ERISA), whether or not waived; (ii) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iii) the failure by any Security Party, any of their respective subsidiaries or any ERISA Affiliate to make any required contribution to a Multiemployer Plan; (iv) a determination that any Plan is, or is expected to be, in "at risk" status (within the meaning of Section 430(i) of the Code); (v) the incurrence by any Security Party, any of their respective subsidiaries or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (vi) the receipt by any Security Party, any of their respective subsidiaries or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Security Party, any of their respective subsidiaries or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, in reorganization within the meaning of Section 4241 of ERISA, or in endangered or critical status within the meaning of Section 432 of the Code or Section 305 of ERISA; (vii) any "reportable event", as defined in Section 4043 of ERISA with respect to a Plan (other than an event for which the 30-day notice period to the PBGC is waived); or (viii) the existence with respect to any Plan of a "prohibited transaction" for purposes of Section 406 of ERISA or Section 4975 of the Code;
"ERISA Termination Event"	shall mean (i) the imposition of any lien under Section 430(k) of the Code or any other lien in favor of the PBGC or any Plan or Multiemployer Plan on any asset of any Security Party, any of their respective subsidiaries or any ERISA Affiliate in connection with any Plan or Multiemployer Plan; (ii) the receipt by any Security Party, any of their respective subsidiaries or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to administer any Plan or Multiemployer Plan under Section 4042 of ERISA; (iii) the filing of a notice of intent to terminate a Plan under Section 4041 of BRISA or the treatment of a Multiemployer  Plan amendment as a termination under Section 4041A of BRISA; (iv) the institution of proceeding to terminate a Plan or a Multiemployer Plan; (v) the incurrence by any Security Party, any of their respective subsidiaries or any BRISA Affiliate of any liability under Title IV of BRISA with respect to the termination of any Plan or Multiemployer Plan; or (vi) the occurrence of any other event or condition which might constitutes grounds under Section 4042 of BRISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan;
"Event(s) of Default"	shall mean any of the events set out in Section 8.1;

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"Excess Cash Flow"	shall mean the aggregate amount of the Earnings of the Vessel during each fiscal quarter of the Borrower's fiscal year minus during each such period: (a)    any voyage expenses of the Vessel payable by the Borrower; (b)    operating expenses (including expenses related to special survey, dry-docking, crew costs, insurance, maintenance,  stores, lube oils, etc.) of the Vessel and corporate  overhead of the Borrower relating to the Vessel in accordance  with the operating expenditure budget delivered pursuant to Section 9.1(d)(vii) up to an aggregate amount of $7,500 per day; (c)    scheduled payments of principal and interest under this Agreement;  and (d)    any other amounts payable hereunder or under the other Transaction Documents, including any fees and expenses;
"Exchange Act"	shall mean the Securities and Exchange Act of 1934, as amended;
"Facility"	shall mean the facility to be made available by the Lenders to the Borrower hereunder pursuant to Section 3 in the maximum principal amount equal to the lesser of (i) Thirty Eight Million Five Hundred Thousand Dollars ' ($38,500,000) and (ii) seventy percent (70%) of the Fair Market Value of the Vessel, or the balance thereof from time to time outstanding;
"Facility Agent"	shall have the meaning ascribed thereto in the preamble;
"Fair Market  Value"	shall mean, at any time and from time to time, a desk-top charter free appraisal on an "as is", "willing seller, willing buyer" basis of the Vessel from one independent ship broker selected by the Facility Agent (which shall be one of Maritime Strategies International Ltd., R.S. Platou Shipbrokers  a.s.,  Fearnley's  A/S and H. Clarkson & Company unless the Facility Agent advises the Borrower otherwise in its sole discretion) or at the Borrower's option, the average of two (2) appraisals from one ship broker selected  by  the  Facility  Agent  above  and  one  Approved   Ship Broker selected by the Borrower and appointed by the Facility Agent; provided, that  if the higher of the two valuations exceeds the lower of the two valuations by more than 10%, Fair Market Value will be the average of three (3) such appraisals by adding another appraisal from one Approved Ship Broker selected by the Facility Agent;
"FATCA"	shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations  thereof;
"Fee Letter"	shall mean the fee letter of even date herewith among the Borrower and the Facility Agent;
"Final Payment  Date"	shall mean the sixth (6th) anniversary of the Drawdown Date
"Foreign  Plan"	shall mean an employee benefit plan, program, policy, scheme or arrangement that is not subject to U.S. law and  is maintained or contributed to by any Security Party or any of their respective subsidiaries or for which any Security Party or any of their respective subsidiaries has or could have any liability;

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"Foreign Termination Event" shall mean the occurrence of an event with respect to the funding or maintenance of a Foreign Plan, that could reasonably be expected to result in a lien on, or seizure of, any collateral hereunder;

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"Foreign Underfunding Event"	shall mean the excess, if any, of the accrued benefit obligations of a Foreign  Plan (based on those assumptions used to fund that Foreign Plan or, if that Foreign Plan is unfunded, based on those assumptions used for financial accounting statement purposes or, if accrued benefit obligations are not calculated for financial accounting purposes,  based on such reasonable  assumptions as may be approved by the applicable Security Party's independent auditors for these purposes) over the sum of (i) the assets of such Foreign Plan and (ii) the liability related to such Foreign Plan accrued for financial accounting statement purposes;
"GAAP"	shall have the meaning ascribed thereto in Section 1.3;
"Guaranteed Obligations"	shall have the meaning ascribed thereto in Section 11.1;
"Guarantor"	shall have the meaning ascribed thereto in the preamble;
"Indebtedness"	shall mean, with respect to any Person at any date of determination (without duplication), (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect  thereto),  (iv) all obligations  of  such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more  than six months after the date of placing such property in service or taking delivery thereof or the completion of such services, except trade payables, (v) all obligations on account of principal of such Person as lessee under capitalized leases, (vi) all indebtedness of other Persons secured by a lien on any asset of such Person, whether or not such indebtedness is assumed by such Person; provided that the amount of such indebtedness shall be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such indebtedness, and (vii) all indebtedness of other Persons guaranteed by such Person to the extent guaranteed; the amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that the amount outstanding at any time of any indebtedness issued with original issue discount is the face amount of such indebtedness less the remaining unamortized portion of the original issue discount of such indebtedness at such time as determined in conformity with GAAP; and provided further that Indebtedness shall not include any liability for current or deferred federal, state, local or other taxes, or any current trade payables;
"Indemnity"	shall have the meaning ascribed thereto in Section 19.8;
"Initial Charter Party Agreement"	shall mean the time charter agreement set forth on Schedule V;
"Initial Charterer"	shall mean Nippon Yusen Kaisha;
"Initial Payment Date"	shall mean the date that is three (3) months after the Drawdown Date;

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"Insurances Assignment"	shall mean the first priority assignment in respect of the insurances over the Vessel, to be executed by the Borrower in favor of the Security Trustee pursuant to Section 4.l(s)(ii), substantially in the form set out in Exhibit F;
"Interest Expense"	shall mean, with respect to the Guarantor and the Subsidiaries, on a consolidated basis, for any period (without duplication), interest expense, whether paid or accrued (including the interest component of capitalized leases), on all Indebtedness of the Guarantor and the Subsidiaries for such period, net of interest income, all determined in accordance with GAAP;
"Interest Period"	shall mean a period of three months;
"ISM Code"	shall mean the International Safety Management Code for the Safe Operating of Ships and for Pollution Prevention constituted pursuant to Resolution A.741(18) of the International Maritime Organization and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto;
"ISPS Code"	shall mean the International Ship and Port Facility Security Code adopted by the International  Maritime  Organization  at  a conference in December, 2002 and amending the Safety of Life at Sea Convention and includes any  amendments  or  extensions thereto and any regulation issued pursuant thereto;
"ISSC"	shall mean the International Ship Security Certificate  issued pursuant to the ISPS Code;
"LCI Shipholdings"	shall mean LCI Shipholdings, Inc., a corporation existing under the laws of the Marshall Islands;
"Lenders"	shall have the meaning ascribed thereto in the preamble;
"Letter of Credit Bank"	BB&T Bank or another financial institution acceptable to the Facility Agent;
"Liquidity"	means the sum of Revolver Undrawn Availability plus Unrestricted Cash;
"Loan Administration Form"	shall  mean  the  DVB  loan  administration   form  as  attached in Exhibit M;
"Majority Lenders"	at any time shall mean Lenders holding an aggregate of more than 66.67% of the Facility then outstanding;
"Manager's Undertaking"	shall mean letters of undertaking to the Facility Agent to be issued by any party that is or becomes the Commercial Manager (unless the Borrower is the Commercial Manager) or the Technical Manager, substantially in the form set out in Exhibit J or in such form acceptable to the Facility Agent, pursuant to which such manager shall subordinate its rights to those of the Creditors;

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"Mandated Lead Arranger"	shall have the meaning ascribed thereto in the preamble;
"Mandatory Costs"	shall mean in relation to the Facility or an unpaid sum the rate per annum notified by any Lender to the Facility Agent to be the cost to that Lender of compliance with all reserve asset, liquidity or cash margin or similar requirement of any Federal Reserve Bank, any other central bank or European Central Bank or the Financial Services Authority or similar institution whose requirements such Lender complies with;
"Maritime Administration Approval"	shall mean pre-approval from the United States Maritime Administration, in form and substance satisfactory to the Lenders, for the possible transfer of the Vessel upon the exercise of the Security Trustee's rights under the US Mortgage to a party not qualified to own and document a vessel under United States flag and/or the re-documentation of the Vessel under foreign flag;
"Material Adverse Effect"	shall mean a material  adverse effect on the ability or prospective ability of the Borrower and/or the Guarantor to meet any of their respective obligations with regard to (i) the Facility and the financing arrangements established in connection therewith or (ii) any of their respective Indebtedness or other obligations that, considered as a whole, are material to the Borrower and/or the Guarantor;
"Materials of Environmental Concern"	shall have the meaning ascribed thereto in Section 2.1(q);
"MI Continuation Mortgage"	shall mean the first priority Marshall Islands  continuation mortgage substantially in the form attached hereto as Exhibit G-2;
"Mortgage"	shall mean (i) prior to the Vessel Transfer, the US Mortgage or (ii) upon the Vessel Transfer pursuant to Section l 2.2(b), the MI Continuation  Mortgage;
"MTSA"	shall mean the Maritime & Transportation Security Act, 2002, as amended, inter alia, by Public Law 107-295;
"Multiemployer Plan"	shall mean, at any time, a "multiemployer plan" (as defined in Section 4001(a)(3) of BRISA) to which any Security Patty, any of their respective Subsidiaries or any BRISA Affiliate has any liability or obligation to contribute or has within any of the six preceding plan years had any liability or obligation to contribute;
"Note"	shall mean the promissory note to be executed by the BotTower to the order of the Facility Agent pursuant to Section 4.l(c), to evidence the Facility substantially in the form set out in Exhibit A;
"OFAC"	shall have the meaning ascribed thereto in Section 19.9;
"Omnibus Assignment and Assumption Agreement"	shall mean the omnibus assignment and assumption agreement substantially in the form set out in Exhibit L;
"Operator"	shall mean the Person who is concerned with the operation of the Vessel and falls within the definition of "Company" set out in rule 1.1.2 of the ISM Code;
"PATRIOT Act"	shall have the meaning ascribed to it in Section 19.9;

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"Payment Dates"	shall mean the Initial Payment Date and the dates falling at three (3) month intervals thereafter, the last of which is the Final Payment Date;
"PBGC"	shall mean the Pension Benefit Guaranty Corporation or any successor entity thereto;
"Person"	shall mean any individual, sole proprietorship, corporation, partnership (general  or limited),  limited  liability  company, business trust, bank, trust company,  joint  venture,  association, joint stock company, trust or other unincorporated organization, whether  or  not  a  legal  entity,  or  any  government  or  agency  or political  subdivision thereof;
"Plan"	shall mean any employee benefit plan (other than a Multiemployer Plan subject to the provisions of Title IV of ERISA  or  Section 412 of the Code or Section 302 of ERISA, and in respect to which any Security Party, any of their respective subsidiaries or  any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an  "employer"  as defined in Section 3(5) of ERISA;
"Prepayment Premium"	shall mean, with respect to prepayments made (i) on or prior to the first anniversary of the Drawdown Date, an amount equal to three percent (3%) of the amount to be prepaid, (ii) after the first anniversary of the Drawdown Date but on or prior to the second anniversary of the Drawdown Date, an amount equal to two percent (2%) of the amount to be prepaid, (iii) after the second anniversary of the Drawdown Date but on or prior to the third anniversary of the Drawdown Date, an amount equal to one percent (1%) of the amount to be prepaid or (iv) after the third anniversary of the Drawdown Date, zero;
"Principal Obligations"	shall  mean,  in  relation  to  the  Borrower  or  the  Guarantor  all monetary obligations (other than its Parallel Debt) which now or at any time hereafter may be or become due, owing or incurred by the B01Tower or the Guarantor to any Creditor, whether due or not, whether contingent or not and whether alone or jointly with others, as principal, surety or otherwise, under or in connection with or pursuant to the Transaction Documents, as such obligations may be extended, restated, prolonged, amended, renewed or notated from time to time;
"Proceeding"	shall have the meaning ascribed thereto in Section 8.l(i);
"Regions Credit  Agreement"	shall mean that certain credit agreement, dated as of September 24, 2013, between, among others, the Guarantor as a borrower and Regions Bank as administrative agent and collateral agent, as in effect as of the Closing Date;
"Required Percentage"	shall  mean  (i)  on  or  prior  to  the  second  anniversary  of  the Drawdown Date, one hundred thirty percent (130%), (ii) after the second anniversary of the Drawdown Date but on or prior to the fourth anniversary of the Drawdown Date, one hundred thirty five percent (135%), (iii) after the fourth anniversary of the Drawdown Date but on or prior to the fifth anniversary of the Drawdown Date, one hundred forty five percent (145%) and (iv) after the fifth anniversary of the Drawdown Date, one hundred sixty percent (160%);

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"Retention Account"	shall mean (i) prior to the Vessel Transfer, the bank account no. 2910053687 maintained in the name of the Initial Borrower and (ii) upon the Vessel Transfer, the bank account no. 2910053660 maintained in the name of the Ultimate Borrower, in each case, with DVB Bank SE (Frankfurt);
"Revolver Undrawn Availability"	shall mean, at any time, the maximum amount of revolving loans that could be incurred by the borrowers under the Regions Credit Agreement (but not to exceed the unutilized revolving commitments of the lenders thereof at such time) such that the Guarantor would remain in compliance with the financial covenants set forth in sections 8.8(a)(i) and 8.8(a)(vi) thereof, determined on a pro forn1a basis, after giving effect to such revolving loans thereunder;
"Sanctions"	shall mean any trade, economic or financial sanctions, laws, regulations, embargoes or restrictive measures (i) enacted, enforced or imposed by the United States, including without limitation, the Trading With The Enemy Act, the International Emergency, Economic Powers Act, the Iran Sanctions Act of 1996, as amended, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the National Defense Authorization Act of 2012 (including the Iran Freedom Counter Proliferation Act), the Iran Threat Reduction and Syria Human Rights Act of 2012, all as amended; any executive order, directive, or regulation pursuant to the authority of any of the foregoing, including the regulations of the U.S. Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or licenses issued or administered thereunder by OFAC (including the Specially Designated Nationals List), and (ii) any non-U.S. economic or financial sanctions, regulations, trade embargoes or other restrictive measures promulgated or administered by the United Nations Security  Council, the European Union or its Member States (including, without limitation, the United Kingdom and France), or the respective governmental institutions and agencies of any of the foregoing, including without limitation, OFAC, the United States Department of State, and Her Majesty's Treasury ("HMT"), or other relevant sanctions authority (all of the foregoing collectively referred to as the "Sanctions Authorities") that are applicable to (A) a Security Party or any Affiliate thereof in the operation of its business or (B) a Lender and have been designated as "Sanctions" by the Facility Agent (acting on the request of such Lender) but only to the extent that compliance with such sanctions, regulations, trade embargoes or other restrictive measures so designated does not conflict with any of the provisions listed in (i) and (ii)(A) hereof;
"Security Document(s)"	shall mean the Mortgage, the Assignments, the Account Pledges and any other documents that may be executed as security for the Facility and the Borrower's obligations in connection therewith;
"Security Party"	shall mean each of the Borrower and the Guarantor;
"Security Trustee"	shall have the meaning ascribed thereto in the preamble;
"SMC"	shall mean the safety management certificate issued in respect of the Vessel in accordance with rule 13 of the ISM code;

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"subsidiary"	shall mean, with respect to any Person, any business  entity  of which more than 50% of the outstanding voting stock or  other equity interest is owned directly or indirectly by such Person and/or one or more other subsidiaries of such Person.
"Subsidiary"	shall mean with respect to any Person, any subsidiary of  such Person or if the context requires, any subsidiary of the Guarantor;
"Swap  Obligation"	shall mean with respect to any Person any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of Section la(47) of the Commodity Exchange Act.
"Synthetic  Lease"	shall mean (a) a so-called synthetic, off-balance sheet or tax retention lease,  or (b) an agreement for the use  or possession of property creating obligations that do not appear  on the  balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
"Taxes"	shall mean any present or future income or other taxes, levies, duties, charges, fees, deductions or withholdings of any nature now or hereafter imposed, levied, collected, withheld or assessed by any taxing authority whatsoever, except for (i) taxes on or measured by the overall net income of each Lender imposed by its jurisdiction of incorporation or applicable lending office, the United States of America, the State or City of New York or any governmental subdivision or taxing authority of any thereof or by any other taxing authority having jurisdiction over such Lender (unless such jurisdiction is asserted by reason of the activities of the Borrower or any of the  Subsidiaries) ), (ii) taxes imposed under FATCA, or (iii) any Taxes that are attributable solely to the failure of any Lender to comply with Section 7.2(c);
"Technical Manager"	shall mean LMS Shipmanagement, Inc. (which may subcontract the services to Wallem Shipmanagement Limited) or such other manager acceptable to the Facility Agent;
"Total Loss"	shall have the meaning ascribed thereto in the Mortgage;
"Transaction Documents"	shall  mean  each  of  this  Agreement,  the  Note,  the  Security Documents and the Fee Letter;
"Ultimate Borrower"	shall mean LCI Shipholdings;
"Unrestricted Cash"	shall mean all unencumbered (other than security interests in favor of the Security Trustee securing the Obligations) cash and Cash Equivalents of the Guarantor and its Subsidiaries at such time.
"US Mortgage"	shall mean the United States first preferred ship mortgage substantially in the form of Exhibit G-1;
"Vessel"	shall mean that certain pure car truck carrier GREEN BAY with IMO No. 9339818;

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"Vessel  Transfer" shall mean the transfer of the ownership of the Vessel by Waterman Steamship to LCI  Shipholdings  and the reflagging  of the Vessel in the Republic of the Marshall Islands;

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"Waterman  Steamship"	shall have the meaning ascribed thereto in the preamble; and
"Withdrawal   Liability(ies)"	shall  mean  liability  to  a  Multiemployer  Plan  as  a  result  of  a complete or partial withdrawal   from such Multiemployer  Plan, as such  terms  are  defined  in  Part  1  of  Subtitle  E  of  Title  IV  of ERISA.

1.2Computation  of Time Periods;  Other Definitional  Provisions.   In this Agreement,  the Note, the other Security Documents and the Fee Letter, in the computation of periods of time from a specified date to a later specified date, the word "from" means  "from and including" and the words "to" and "until" each mean "to but excluding"; words importing  either gender include the other gender; references to  "writing" include printing, typing, lithography and other means of reproducing words in a tangible  visible  form; the words "including," "includes" and "include" shall be deemed to be followed by  the  words   "without limitation"; references to articles, sections (or subdivisions of sections), exhibits, annexes or schedules are to this Agreement, the Note or such  Security Document,  as applicable;  references  to  agreements  and  other contractual instruments (including this Agreement, the Note and the Security Documents) shall be deemed to include all subsequent amendments, amendments and restatements,  supplements, extensions, replacements and other modifications  to such instruments  (without,  however,   limiting  any  prohibition   on  any  such amendments,  extensions  and other modifications  by the terms of this Agreement, the Note or any  Security Document); references to any matter that is "approved" or requires "approval" of a party shall mean approval given in the sole and absolute discretion of such party unless otherwise  specified.

1.3Accounting Terms. Unless otherwise specified herein, all accounting terms used in this Agreement, the Note and in the Security Documents shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Facility Agent or to the Lenders under this Agreement shall be prepared, in accordance with generally accepted accounting principles for the United States ("GAAP"), as amended from time to time including amendments to GAAP made as a result of the conformity of GAAP to International Financial Repo1iing Standards; provided,  however,  that  for purposes of determining the Guarantor's ratios and financial covenants set forth in Section 9.3, GAAP shall be GAAP in effect as at June 30, 2014.

1.4Certain  Matters  Regarding  Materiality.   To the extent that any representation,  warranty, covenant or other undertaking of any of the Security Parties in this Agreement is qualified by  reference to those which are not reasonably expected to result in a "Material Adverse Effect" or  language of similar import, no inference shall be drawn therefrom that any Agent or Lender has knowledge  or approves of any noncompliance by such Security Party with any governmental rule.

2.REPRESENTATIONS AND WARRANTIES

2.1Representations    and   Warranties.      In   order   to   induce  the   Creditors   to   enter   into   this Agreement and to make the Facility available, each  Security Party  hereby  represents  and warrants  to  the Creditors  (which representations  and warranties  shall survive the execution and delivery of this Agreement and the Note and the drawdown of the Facility) that:

(a)Due Organization and Power. Each Security Party is validly existing in good standing under the laws of its jurisdiction of incorporation, has full power to carry on its business as now being conducted and to enter into and perform its obligations under this Agreement, the Note and the Security Documents to which it is a party, and is in compliance with all statutory, regulatory and other requirements relative to such business and such

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agreements;

(b)Authorization and Consents. All necessary corporate action has been taken to authorize, and all necessary consents and authorities have been obtained and remain in full force and effect to permit, each Security Party to enter into and perform its obligations under this Agreement, the Note and the Security Documents and, in the case of the Borrower to borrow, service and repay the Facility and, as of the date of this Agreement, no further consents or authorities are necessary for the service and repayment of the Facility or any part thereof;

(c)Binding Obligations. This Agreement, the Note, the Security Documents and the Fee Letter constitute or will, when executed  and delivered, constitute the legal, valid and binding obligations of each Security Party that is a party thereto enforceable against such Security Party in accordance  with  their respective terms, except to the extent that such enforcement may be limited by equitable  principles, principles of public  policy or applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors' rights;

(d)No Violation. The execution and delivery of, and the performance of the provisions of, this Agreement, the Note, the Fee Letter and those of the Security Documents to which it is to be a party by each Security Party do not contravene any applicable law or regulation existing at the date hereof or any contractual restriction (including, after giving effect to the consent agreement referred to in Section 4.l(dd), the Regions Credit Agreement) binding on such Security Party or the certificate of incorporation or by-laws (or equivalent instruments) thereof and that the proceeds of the Facility shall be used by the Borrower exclusively for its own account and for the purpose set forth in Section 3. l(a);

(e)Filings; Stamp Taxes. Other than the recording of the Mortgage with (x) prior to the Vessel Transfer, the appropriate authorities for the United States and (y) upon the Vessel Transfer the appropriate authorities for the Republic of the Marshall Islands, and the filing of Uniform Commercial Code Financing Statements with (x) prior to the Vessel Transfer, the Department of State of the State of New York and (y) upon the Vessel Transfer, the Recorder of Deeds of the District of Columbia in respect of the Assignments, and the payment of filing or recording fees consequent thereto, it is not necessary for the legality, validity, enforceability or admissibility into evidence of this Agreement, the Note, the Security Documents or the Fee Letter that any of them or any document relating thereto be registered, filed, recorded or enrolled with any court or authority in any relevant jurisdiction or that any stamp, registration or similar Taxes be paid on or in relation to this Agreement, the Note, any of the Security Documents or the Fee Letter;

(f)Litigation. No action, suit or proceeding is pending or threatened against any Security Party before any court, board of arbitration or administrative agency which could or might have a Material Adverse Effect;

(g)No Default. No Security Party is in default under any agreement by which it is bound, or is in default in respect of any financial commitment or obligation, in each case, exceeding $5,000,000 individually or $20,000,000 in the aggregate;

(h)Vessel. The Vessel is:

(i)in the sole and  absolute ownership  of the Borrower  and duly registered  in the Borrower's name (x) prior to the Vessel Transfer, under the United States flag and

(y) upon the Vessel Transfer, under the Marshall Islands flag, unencumbered, save and except for the Mortgage and as permitted thereby;

(ii)classed in the highest classification and rating for vessels of the same age and type with its Classification Society without any outstanding recommendations;

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(iii)operationally seaworthy and in every way fit for its intended service; and

(iv)insured  in  accordance  with  the  provisions  of  the  Mortgage  and  the  requirements thereof in respect of such insurances will have been complied with;

(i)Insurance. Each of the Security Parties has insured its properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses;

(j)Financial Information.  Except as otherwise disclosed in writing to the Facility Agent on or prior to the date hereof, all financial statements, information and other data furnished by any Security Party to the Facility Agent are complete and correct, such financial statements have been prepared in accordance with GAAP and accurately and fairly present the financial condition of the parties covered thereby as of the respective dates thereof and the results of the operations thereof for the period or respective periods covered by such financial statements, and since the date of the Guarantor's financial statements  most recently delivered to the Facility Agent, there has been no Material Adverse Effect as to any of such parties and none thereof has any contingent obligations, liabilities for taxes or other outstanding financial obligations except as disclosed in such statements, information and data;

(k)Tax Returns. Each Security Party has filed all material tax returns required to be filed thereby and has paid all taxes payable thereby which have become due, other than those not yet delinquent or the nonpayment of which would not have a Material Adverse Effect and except for those taxes being contested in good faith and by appropriate proceedings or other acts and for which adequate reserves shall have been set aside on its books;

(1)BRISA. The execution and delivery of this Agreement and the consummation  of the transactions hereunder will not involve any "prohibited transaction" for purposes of BRISA or Section 4975 of the Code and no condition exists or event or transaction has occurred in connection with any Plan or Multiemployer Plan maintained or contributed to, or required to be maintained or contributed to, by any Security Party, any of their respective subsidiaries or any BRISA Affiliate resulting from the failure of any thereof to comply with BRISA which is reasonably likely to result in any Security Party, any of their respective subsidiaries or any BRISA Affiliate incurring any liability, fine or penalty which individually or in the aggregate could have a Material Adverse Effect. No BRISA Funding Event, BRISA Termination Event, Foreign Termination Event or Foreign Underfunding exists or has occurred, or is reasonably expected to exist or occur, that, when taken together with all other BRISA Funding Events, BRISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or  have occurred, or which could reasonably be expected to exist or occur, could reasonably be expected to result in liability to the Security Parties, their respective subsidiaries and BRISA Affiliates in the aggregate in excess of $1,000,000;

(m)Chief  Executive  Office.   The chief executive officer and chief place of business  of  each Security Party and the office in which the records relating to the earnings and other receivables of  each Security Party are kept is, and will continue to be, located at 11 North Water Street, Suite 18290, Mobile, Alabama 36602, USA;

(n)Foreign  Trade  Control  Regulations.    (i) None  of the  Security  Parties  nor  any  of  their respective Subsidiaries, nor any director, officer, employee, agent, Affiliate or representative of a  Security Party, is an individual or entity ("Person") that is, or is owned or controlled by a Person that is a Blocked Person or otherwise the subject of any Sanctions.

(ii)The Borrower will not, directly or indirectly, use the proceeds of the Facility, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

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(A)to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

(B)in any other manner that will result in a violation of Sanctions by any Person.

(iii)For the past 5 years, the Borrower has not knowingly engaged in, is not now knowingly engaged in, and will not knowingly  engage  in,  any  dealings  or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

(iv)None of the transactions contemplated herein will violate Sanctions.

(o)Money Laundering. (i) The operations of the Borrower are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Bank Secrecy Act, as amended by the PATRIOT Act, and the applicable anti-money laundering statutes of jurisdictions where the Borrower conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "Anti-Money Laundering Laws"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Borrower with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Borrower, threatened.

(ii) The Borrower requires the Facility for use in connection with its lawful organizational purpose and for no other purposes and the Borrower has not contravened any Anti-Money Laundering Laws. The Borrower represents that it is the ultimate beneficiary of the Facility to be made to it as contemplated in this Agreement and will promptly notify the Lenders (by written notice to the Facility Agent) if it ceases to be the ultimate beneficiary. Such written notice shall disclose the name and the address of the new ultimate beneficiary.

(p)Equity Ownership. The Borrower is owned directly one hundred percent (100%) by the Guarantor;

(q)Environmental Matters and Claims. (a) Except as heretofore disclosed in writing to the Facility Agent (i) each of the Borrower and its Affiliates (which for purposes of this Section 2.l (q) shall be deemed to include the Guarantor and its Affiliates) will, when required to operate their business as then being conducted, be in compliance with all applicable United States federal and state, local, foreign and international laws, regulations, conventions and agreements relating to pollution prevention or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, navigable waters, waters of the contiguous zone, ocean waters and international waters), including, without limitation, laws, regulations, conventions and agreements relating to (1) emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous materials, oil, hazardous substances, petroleum and petroleum products and by-products ("Materials of Environmental Concern"), or (2) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern ("Environmental Laws"); (ii) each of the Borrower and its Affiliates  will,  when  required,  have  all  permits,  licenses,  approvals,  rulings,  variances,  exemptions,

clearances, consents or other authorizations required under applicable Environmental Laws ("Environmental Approvals") and will, when required, be in compliance with all Environmental Approvals required to operate their business as then being conducted; (iii) the Borrower has not nor has any Affiliate thereof received any notice of any claim, action, cause of action, investigation or demand by any person, entity, enterprise or government, or any political subdivision, intergovernmental body or agency, department or instrumentality thereof, alleging potential liability for, or a requirement to incur, material investigator  costs, cleanup costs, response and/or remedial costs (whether incurred by a governmental entity or otherwise), natural resources damages, prope1iy damages, personal

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injuries, attorneys' fees and expenses, or fines or penalties, in each case arising out of, based on or resulting from (1) the presence, or release or threat of release into the environment, of any Materials of Environmental Concern at any location, whether or not owned by such person, or (2) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law or Environmental Approval ("Environmental Claim") (other than Environmental Claims that have been fully and finally adjudicated or otherwise determined and all fines, penalties and other costs, if any, payable by the Security Parties in respect thereof have been paid in full or which are fully  covered by insurance (including permitted deductibles)); and (iv) there are no  circumstances  that  may  prevent  or interfere  with such full compliance in the future; and (b) except as heretofore disclosed in writing to the Facility Agent there is no Environmental Claim pending or threatened against the Borrower or any Affiliate thereof  and there are no past or  present actions, activities, circumstances, conditions, events or incidents,  including, without limitation, the release, emission, discharge or disposal of any Materials of Environmental  Concern, that could form the basis of any Environmental Claim against such persons the adverse disposition of which may result in a Material Adverse Effect;

(r)Compliance with ISM Code, ISPS Code and MTSA.  The Vessel and the Operator  comply with the requirements of the ISM Code, the ISPS Code and the MTSA including, but not limited  to, the maintenance and renewal of valid certificates pursuant thereto;

(s)Threatened Withdrawal of DOC or SMC. There is no threatened or actual withdrawal of the Operator's DOC or SMC in respect of the Vessel;

(t)Liens. Other than as disclosed in Schedule III, there are no liens of any kind on any property owned by any Security Party other than those liens created pursuant to this Agreement or the Security Documents or permitted thereby;

(u)Indebtedness. Other than as disclosed in Schedule IV, none of the Security Parties has any Indebtedness;

(v)Payment Free of Taxes. All payments made or to be made by the Security Parties under or pursuant to this Agreement, the Note, the Security Documents and the Fee Letter shall be made free and clear of, and without deduction or withholding for an account of, any Taxes;

(w)No Proceedings to Dissolve. There are no proceedings or actions pending or contemplated by any Security Party or, to the best knowledge of any Security Party, contemplated by any third party, to dissolve or terminate any Security Party;

(x)Solvency. In the case of each of the Security Parties, (a) the sum of its assets, at a fair valuation, does and will exceed its liabilities, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, (b) the present fair market salable value of its assets is not and shall not be less than the amount that will be required to pay its probable liability on its then existing debts, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, as they mature, (c) it does not and will not have  unreasonably small working capital with  which to continue its business and (d) it has not incurred, does not intend to incur and does not believe it will incur debts beyond its ability to pay such debts as they mature;

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(y)Compliance  with  Laws.  Each of the Security Parties is in compliance with all  applicable laws, except where any failure to comply with any such applicable laws would not, alone or in the aggregate, have a Material Adverse Effect; and

(z)Survival. All representations, covenants and warranties made herein and in any certificate or other document delivered pursuant hereto or in connection herewith shall survive the making of the Facility and the issuance of the Note.

3.THE FACILITY

3.1Purposes. (a) The Lenders shall, during the Availability Period, make the Facility available to the Borrower for the purpose of partially financing the acquisition costs of the Vessel.

(b) Making of the Facility. Each of the Lenders, relying upon each of  the representations and warranties set out in Section 2, hereby severally and not jointly agrees with the Borrower that, subject to and upon the terms of this Agreement, it will, not later than 11:00 a.m. New York City time on the Drawdown Date, make its portion of the Facility, in Federal or other funds, immediately available in New York City to the Facility Agent at its address set forth on Schedule I or to such account of the Facility Agent most recently designated by it for such purpose by notice to the Lenders. Unless the Facility Agent determines that any applicable condition specified in Sections 4.1 or 4.2 has not been satisfied, the Facility Agent will make the funds so received from the Lenders available to the Borrower at the aforesaid address, subject to the receipt of the funds by the Facility Agent as provided in the immediately preceding sentence, not later than 2:30 P.M. (New York City time) on the Drawdown Dates, and in any event as soon as practicable after receipt. The Facility will be made available in one (1) drawing.

3.2Receipt of Funds. Unless the Facility Agent shall have received notice from a Lender prior to the Drawdown Date that such Lender will not make available to the Facility Agent such Lender's share of the Advance, the Facility Agent may assume that such Lender has made such share available to the Facility Agent on the Drawdown Date in accordance with this Section 3.2 and the Facility Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such share available to the Facility Agent, such Lender and the Borrower (but without duplication) severally agree to repay to the Facility Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Facility Agent, at (i) in the case of the Borrower, a rate per annum equal to the Applicable Rate and (ii) in the case of such Lender, the actual costs of funds incurred by the Facility Agent for such funds. If such Lender shall repay to the Facility Agent such corresponding amount, such amount so repaid shall constitute such Lender's share of the Advance for purposes of this Agreement as of the Drawdown Date. Nothing in this Section 3.2 shall be deemed to relieve any Lender of its obligation to make its share of the Advance to the extent provided in this Agreement. In the event that the Borrower is required to repay the Advance to the Facility Agent pursuant to this Section 3.2 as between the B01Tower and the defaulting Lender, the liability for any breakfunding costs as described in Section 4.3 shall be borne by the defaulting Lender. If the defaulting Lender has not paid any such breakfunding costs upon demand by the Facility Agent therefore, the Borrower shall pay such breakfunding costs upon demand by the Facility Agent and the Borrower shall be entitled to recover any such payment for breakfunding costs made by the Borrower from the defaulting Lender.

3.3Drawdown Notice. The Borrower shall, by 10:00 a.m. New York City time on a day which is at least three (3) Banking Days (or fewer Banking Days if agreed by the Lenders) before the Drawdown Date serve a notice (a "Drawdown Notice"), substantially in the form of Exhibit B, on the Facility Agent, which notice shall (a) be in writing addressed to the Facility Agent, (b) be effective on receipt by the Facility Agent, (c) specify the amount of the Facility to be drawn, (d) specify the Banking Day on which the Facility is to be drawn, (e) specify the disbursement instructions, and (f) be irrevocable.

3.4Effect   of  Drawdown   Notice.     Delivery   of  the  Drawdown  Notice   shall  be  deemed  to constitute a warranty by the Borrower (a) that the representations and warranties stated in Section 2 (updated mutatis mutandis) are true and correct on and as of the date of the Drawdown Notice and will be true and correct on and as of the Drawdown Date as if made on such date, and (b) that no Event of Default  nor any event which with the giving of notice  or lapse of time or both would  constitute  an Event  of  Default  has occurred and is continuing.

4.CONDITIONS  PRECEDENT

4.1Conditions Precedent to this Agreement. The obligation of the Lenders to make the Facility available to the Borrower under this Agreement shall be expressly subject to the following conditions precedent:

(a)Corporate Authority. The Facility Agent shall have received the following  documents  in form and substance satisfactory to the Facility Agent and its legal advisers:

(i)copies, certified as true and complete by an officer of each of the Security Parties, of the resolutions of its board of directors and, with respect to both the Initial Borrower and the Ultimate Borrower, shareholders evidencing approval of the Transaction Documents to which each is a party and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, including the execution of the Drawdown Notice;

(ii)copies, certified as true and complete by an officer of each of the Security Parties (and the Ultimate Borrower), of the certificate or articles of incorporation and by­ laws or similar constituent document thereof;

(iii). copies, certified as true and complete by an officer of each of the Security Patties (and the Ultimate Borrower), of the names and true signatures of the officers of such Security Parties authorized to sign each Transaction Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder;

(iv)certificate of the jurisdiction of each Security Party (and the Ultimate Borrower) as to the good standing thereof;

(v)the capital and shareholding structure of the Borrower (and the Ultimate Borrower) certified to be true and complete by an officer of the Borrower (and the Ultimate Borrower);

(vi)a ce1tificate signed by the Chairman, President, Executive Vice President, Treasurer, Comptroller, Controller or chief financial officer of each of the Security Parties to the effect that (A) no Default or Event of Default shall have occurred and be continuing and (B) the representations and warranties of such  Security Patty contained in this Agreement are true and correct as of the date of such certificate.

(b)The Agreement. Each of the Security Parties shall have duly executed and delivered this Agreement to the Facility Agent.

(c)The Note.  The Borrower shall have duly executed and delivered the Note to the FacilityAgent.

(d)The   Creditors.The Facility  Agent  shall  have  received  executed  counterparts   of  this Agreement from each of the Lenders.

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(e)Fees. The Creditors shall have received payment in full of all fees and expenses due to each thereof pursuant to the terms hereof on the date when due including, without limitation, all fees and expenses due under Section 15 and the Fee Letter.

(f) Environmental  Claims.  The Lenders  shall be satisfied that none of the Security Parties is subject to any Environmental Claim which could reasonably be expected to have a Material Adverse Effect.

(g)Legal Opinions. The Facility  Agent, on behalf of the Agents  and the Lenders, shall have received opinions addressed to the Facility Agent from (i) Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., special counsel to the Security Parties, and (ii) Seward & Kissel LLP, special counsel to the Agents and the Lenders, in each case in such form as the Facility Agent may require, as well as such other legal opinions as the Lenders shall have required as to all or any matters under the laws of the State of Delaware, the State of New York and the United States of America, covering certain of the representations and warranties and conditions which are the subjects of Sections 2 and 4, respectively.

(h)Officer's Certificate. The Facility Agent shall have received a certificate signed by  the President or other duly authorized executive officer of the Borrower certifying that under applicable law existing on the date hereof, the Borrower shall not be compelled by law to withhold or deduct any Taxes from any amounts to become payable to the Facility Agent for the account of the Creditors hereunder.

(i)Initial Charter Party Agreement.  The Borrower shall have delivered to the Facility Agent  a copy, certified as true and complete by an officer of the Borrower, of the Initial Charter Party Agreement.

(j) Accounts. The Borrower shall have established (i) the Earnings Accounts and the Retention Accounts in the name of the Initial Borrower and (ii) the Earnings Accounts and the Retention Accounts in the name of the Ultimate Borrower, in each case, with DVB Bank SE (Frankfurt).

(k)UCC Filings. The Facility Agent shall have received evidence that Uniform  Commercial Code Financing Statements have been filed in the State of New York and in such other jurisdictions as the Facility Agent may reasonably require.

(1)Financial Statements. Each of the Security Parties shall deliver to the Facility Agent consolidated financial statements for the period ending March 31, 2014 or for any other period requested by the Facility Agent prior to the Closing Date.

(m)Licenses,   Consents   and   Approvals.    The  Facility  Agent  shall  have  received  satisfactory evidence that all necessary licenses, consents and approvals in connection with the transactions  contemplated by this Agreement, the Note, the Security Documents and the Fee Letter have been obtained.

(n)Know     Your     Customer     Requirements.        The    Facility    Agent    shall    have    received documentation, with respect to  the  Security  Parties  and  the  Ultimate  Borrower,  to  its  satisfaction  in connection with its know your customer requirements, including but not limited to:

(i)completed bank account opening mandates with telephone and fax indemnities to include a list of all account holders' authorized signatories and specimens of their signatures;

(ii)ce1tified list of directors, including titles, business  and  residential  addresses  and dates of birth;

(iii)certified true copy of photo identification (i.e. passport or driving license) and evidence of residential address for all authorized signatories;

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(iv)with respect to the Borrower, certificate of ultimate beneficial  ownership,  certified by the respective secretary or assistant secretary of such entity; and

(v)non-resident declaration forms, if applicable.

(o)Loan  Administration  Form.   The Facility Agent  shall have received  a duly executed  Loan Administration Form.

(p)Debt   Service  Letter  of  Credit.    The Facility  Agent  shall  have  received  the Debt  Service Letter of Credit.

(q)Maritime    Administration    Approval.The   Borrower   shall   have   obtained   Maritime Administration Approval in form and substance satisfactory to the Lenders.

(r)Vessel Documents.  The Facility Agent shall have received:

(i)the latest survey report in respect of the Vessel;

(ii)the classification ce1tificate of the Vessel and the trading certificate of the Vessel from the Classification Society with which such Vessel is classed at least ten (10) days prior to the Drawdown Date, unless otherwise agreed by the Facility Agent;

(iii)the relevant pages of the Trim & Stability booklet, including (x) a copy of the approval page displaying the name of the Vessel and the stamp of class, (y) a copy of the page giving the description of the Vessel and (z) the page stating the Vessel's LDT;

(iv)the chartering description (e.g. Q88 for tankers or Form C for LPG); and

(v)evidence satisfactory that the Vessel is:

a.in the sole and absolute ownership of such Borrower and duly registered in such Borrower's name under the United States flag free of all liens and encumbrances of record other than the Mortgage;

b.insured in accordance with the prov1s10ns of the Mo1tgage and all requirements of the Mo1tgage in respect of such insurance have been fulfilled (including, but not limited to, letters of undertaking from the insurance brokers,  including  confirmation notices of assignment, notices of cancellation and loss payable clauses acceptable to the Lenders); the main terms of such insurances (including the copies or drafts of the relevant insurance documents) to be provided to the Facility Agent at least 10 days prior to the Drawdown Date;

c.classed in the highest classification and rating for vessels of the same age and type with its Classification Society without any outstanding recommendations and requirements;  and

d.operationally seaworthy and in every way fit for its intended service.

(s)Security Documents. The Borrower shall have executed and delivered to the Facility Agent:

(i)the Earnings and Charterparties Assignment;

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(ii)the Insurances Assignment;

(iii)the Account Pledges relating to the Earnings Account and the Retention Account;

(iv)the Assignment  Notice  and the acknowledgement  thereof  in respect  of (i) through

(iii) above (including the executed and countersigned notice and acknowledgment of assignment of earnings and time charter and subordination agreement  from  the Initial Charterer);

(v)the Mo1tgage relating to its Vessel;

(vi)Manager's Unde1taking from each of the Commercial Manager (unless the B01Tower is the Commercial Manager) and the Technical Manager (or any subcontractor thereof), including, where applicable, an assignment of the interests of such manager in the insurances and subordination undertakings;

(vii)evidence that the Borrower has sent an instruction letter to the Classification Society as required under Section 9.l(z) and that the Classification Society has executed the unde1taking as required thereby; and

(viii)an irrevocable power of attorney granted by the Borrower to the Security Trustee which, upon the occurrence and during the continuance of an Event  of  Default, enables the Security Trustee to make all necessary decisions in relation to the Vessel and obliges the master of the Vessel to adhere to the Security Trustee's instructions.

(t)Registration of the Mortgage. The Facility Agent shall have received satisfactory evidence that the Mortgage has been duly registered under the laws of the United States of America and constitutes a first priority mortgage lien under the laws of the United States.

(u)Vessel Appraisals. The Facility Agent shall have received appraisals, in form and substance satisfactory to the Facility Agent, as to the Fair Market Value of the Vessel (to be dated not earlier than one month prior to the Drawdown Date).

(v)ISM DOC. The Facility Agent  shall have received a copy of the Operator's DOC and satisfactory evidence of compliance with the ISM, IPS Codes and/or IAPPC, to the extent applicable.

(w)Evidence  of  Current  COFR.  The Facility Agent shall have received a copy of the  current Certificate of Financial Responsibility pursuant to the Oil Pollution Act 1990 for the Vessel.

(x)Insurance Report. The Facility Agent shall have received a detailed report from a firm of independent marine insurance consultants appointed by the Facility Agent in respect of the insurances on the Vessel, in form and substance satisfactory to the Facility Agent; the cost of such report to be for the account of the Borrower.

(y)Drawdown Notice. The Facility Agent having received the Drawdown Notice in accordance with the terms of Section 3.3.

(z)Representations and Warranties True. The representations stated in Section 2 being true and correct as if made on that date.

(aa) No Default.  No Default or Event of Default having occurred and being continuing or would result from the making of the requested Advance.

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(bb)No Material Adverse Effect.   Since December 31, 2013, there having been

(i)no material  adverse  change in the consolidated  financial  strength of the Borrower and the Guarantor;

(ii)no material adverse global economic or political development; and

(iii)no material adverse development in the international money and capital markets;

which,  in the reasonable  opinion  of the Lenders,  might  prejudice the successful  and timely  closing of the Facility or the successful and timely performance of any of the material obligations under this Agreement.

(cc) Miscellaneous. The Facility Agent shall be satisfied with any other document, authorization, opinion or assurance it may require

(dd)   Regions  Consent.   The Facility Agent shall have received a consent agreement  executed by the administrative agent, the collateral agent, the "Required Lenders" and the loan parties under the Regions Credit Agreement together with the related UCC financing statement amendment, in each case, in form and substance satisfactory to it.

4.2Breakfunding Costs. In the event that, on the date specified for the making of the Advance in the Drawdown Notice, the Lenders shall not be obliged under this Agreement to make the requested Advance available, the Borrower shall indemnify and hold the Lenders fully harmless against any losses which the Lenders (or any thereof) may sustain as a result of borrowing or agreeing to borrow funds to meet the drawdown requirement of the Drawdown Notice and the certificate of the relevant Lender or Lenders shall, absent manifest error, be conclusive and binding on the Borrower as to the extent of any such losses.

4.3Satisfaction after Drawdown. Without prejudice to any of the other terms and conditions of this Agreement, in the event all of the Lenders elect, in their sole discretion, to make the Facility available to the B01Tower prior to the satisfaction of all or any of the conditions referred to in Sections 4.1 and 4.2, the Borrower hereby covenants and undertakes to satisfy or procure the satisfaction of such condition or conditions within seven (7) days after the Drawdown Date (or such longer period as the Majority Lenders, in their sole discretion, may agree).

5.REPAYMENT  AND PREPAYMENT

5.1Repayment. Subject to the prov1s10ns of this Section 5 regarding application of prepayments, the Borrower shall repay the principal of the Facility in twenty four (24) consecutive quarterly installments begim1ing on the Initial Payment Date and ending on the Final Payment Date, each of the twenty four (24) installments being in an amount equal to $740,384.62 (accompanied by, in the case of the last such installment, a balloon payment in the amount of $20,730,769.23 or the full amount of the Facility then outstanding and all interest, fees or other moneys payable under any Transaction Document).

5.2Voluntary   Prepayment;   No   Re-borrowing.    The  Borrower  may  prepay,  upon  five  (5) Banking Days written notice, the Facility or any portion thereof, provided that if such prepayment is made on a day other than a Payment Date, such prepayment shall be made together with the costs and  expenses provided for in Section 13.4. Each prepayment shall be in a minimum amount of Two Million  Dollars ($2,000,000) and any multiple thereof, or the full amount of the Facility then outstanding. No part  of the Facility once repaid or prepaid will be available for re-borrowing.

5.3Mandatory Prepayment. Upon (i) the sale of the Vessel or (ii) the earlier of (x) ninety (90) days after the Total Loss (as such term is defined in the Mortgage) of the Vessel or (y) the date on which the insurance proceeds in respect of such loss are received by the Borrower or the Security Trustee as assignee

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thereof, the Facility shall be repaid in full together with, in the event of a Sale under  Subsection (i) hereof only, the Prepayment Premium, as applicable, and the costs and expenses provided for in Section 13.4.

5.4Interest and Costs with Prepayments/Application of Prepayments.

(a)Any prepayment of the Facility made hereunder (including, without limitation, those made pursuant to Sections 5 and 9) shall be subject to the condition that on the  date of prepayment  all accrued interest to the date of such prepayment shall be paid in full with respect to the Facility or portions thereof being prepaid, together with the Prepayment Premium, as applicable, and any and  all  costs  or expenses incurred by any Lender in connection with any breaking of funding (as certified by such Lender, which certification shall, absent any manifest error, be conclusive and binding on the Borrower).

(b)All prepayments of the Facility under Section 5.2 shall be applied towards the installments of the Facility in the inverse order of their due dates for payment.

5.5Borrower's Obligation Absolute. The Borrower's obligation to pay each Creditor hereunder and under the Note shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof and thereof, under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the B01rower may have or may have had against the Creditors.

6.INTEREST AND RATE

6.1Payment of Interest; Interest Rate. (a) The Borrower hereby promises to pay to the Lenders interest on the unpaid principal amount of the Facility for the period commencing on the Drawdown Date until but not including the stated maturity thereof (whether by acceleration or otherwise) or the date of prepayment thereof at the Applicable Rate. The Facility Agent shall promptly notify the Borrower and the Lenders in writing of the Applicable Rate as and when determined. Each such determination, absent manifest error, shall be conclusive and binding upon the Borrower. Accrued interest on the Facility shall be payable in arrears on each Payment Date.

(b) Notwithstanding the foregoing, the Borrower agrees that after the occurrence and during the continuance of an Event of Default, the Facility shall bear interest at the Default Rate. In addition, the Borrower hereby promises to pay interest (to the extent that the payment of such interest shall be legally enforceable) on any overdue interest, and on any other amount payable by the Borrower hereunder which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise), for the period commencing on the due date thereof until but not including the date the same is paid in full at the Default Rate.

(c) Interest payable at the Default Rate shall be payable from time to time on demand of the Facility Agent.

6.2Maximum Interest. Anything in this Agreement or the Note to the contrary notwithstanding, the interest rate on the Facility shall in no event be in excess of the maximum rate permitted by applicable law.

7.PAYMENTS

7.1Time and  Place  of  Payments,  No  Set  Off.  All payments to be made hereunder by  the Borrower shall be made to the Facility Agent, not later than 3 p.m. New York time (any payment  received after 3 p.m. New York time shall be deemed to have been paid on the next Banking Day) on the due date of such payment, to HSBC Bank USA, New York (Account No. 000.129.879, ABA No. 021001088,  SWIFT ID No. MRMDUS33 for the credit to DVB Bank SE, Frankfurt, Reference: FP 3044858) or to  such other

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account of the Facility Agent as the Facility Agent may direct, without set-off or counterclaim and free from, clear of, and without deduction or withholding for, any Taxes.

7.2Taxes. (a) If the Borrower shall at any time be compelled by law to withhold or deduct any Taxes from any amounts payable to the Lenders hereunder, then the Borrower shall pay such additional amounts in Dollars as may be necessary in order that the net amounts received after withholding or deduction shall equal the amounts which would have been received if such withholding or deduction were not required and, in the event any withholding or deduction is made, whether for Taxes or otherwise, the Borrower shall promptly send to the Facility Agent such documentary evidence with respect to such withholding or deduction including documentary evidence satisfactory to the Facility Agent that the tax has been paid to the appropriate taxation authority as may be required from time to time by the Lenders.

(b)If any Lender obtains the benefit of a credit against the liability thereof for federal income taxes imposed by any taxing authority for all or part of the Taxes as to which the Borrower have paid additional amounts as aforesaid (and each Lender agrees to use commercially reasonable efforts to obtain the benefit of any such credit which may be available to it, provided that (i) it has knowledge that such credit is in fact available to it and (ii) it is able to attribute such credit to this Facility), then such Lender  shall reimburse the Borrower for the amount of the credit so obtained. The decision as to whether or not to seek such a benefit is in the sole discretion of the Lenders.

(c)On or prior to the date hereof (or in the case of a transferee Lender, the date that it becomes a party to this Agreement), and thereafter when reasonably requested by a Security Party, each Lender or transferee that is organized under the laws of a jurisdiction outside the United States (a "Non-U.S. Lender") shall deliver to the Borrower and the Facility Agent two properly completed and duly executed copies of (as applicable) IRS Form W-8BEN-E, W-8ECI or W-8IMY or, upon request of a Security Party or the Facility Agent, any subsequent versions thereof or successors thereto, in each case claiming a reduced rate (which may be zero) of U.S. federal withholding tax under Sections 1441 and 1442 of the Code with respect to payments of interest hereunder as such Non-U.S. Lender may properly claim. In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code, such Non-U.S. Lender shall, on or prior to the date hereof (or in the case of a transferee Lender, the date that it becomes a party to this Agreement), and thereafter when reasonably requested by the Borrower, provide to the Facility Agent in addition to the IRS Form W-8 required above a certificate representing that such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)  of such Borrower  and is not a controlled foreign corporation related to such Borrower (within the meaning of Section 864(d)(4) of the Code), and such Non-U.S. Lender agrees that it shall promptly notify the Facility  Agent in the event any representation  in such certificate is no longer accurate.

(d)Without limiting the generality of the foregoing, if a payment made to a Lender under this Agreement or any of the other Transaction Documents would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Facility Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Facility Agent such documentation prescribed by applicable law (including as prescribed by Section 147l(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Facility Agent as may be necessary for the Borrower and the Facility Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (k), "FATCA" shall include any amendments made to FATCA after the date of this Agreement. In addition, each Lender shall indemnify the Facility Agent and the Borrower for any withholding Tax or other penalties imposed in connection with any "withholdable payment,'' as defined in Section 1473 of the Internal Revenue Code,

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made to  a Lender that  is not  a U.S. Person that  has  failed to comply with the reporting  requirements  or otherwise qualify for an exemption under FATCA.

(e)Nothing contained in this Section 7.2 shall require the Facility Agent or Lender (or any transferee Lender) to make available any of its tax returns or any other information that it deems to be confidential or proprietary.

7.3Sharing  of  Setoffs.   Each Lender  agrees  that  if it  shall, through  the exercise  of  a right  of banker's  lien,  setoff  or  counterclaim  or  pursuant  to  a  secured  claim  under  Section  506  of  the  Federal Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim,  exercised or received by such Lender under any applicable bankruptcy, insolvency or other similar law or  otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of the Facility as a result of which its funded Commitment shall be proportionately less than the funded Commitment  of any  other Lender,  it shall be deemed simultaneously to have purchased  from such other Lender at face value,  and shall promptly pay to such other Lender the purchase price for, a participation in the funded  Commitment of such other Lender so that  the aggregate  funded  Commitment  of  each  Lender  shall be  in  the same proportion to the aggregate funded Commitments then  outstanding  as  its  funded  Commitment   prior  to  such  exercise  of banker's lien, setoff or counterclaim or other event was to the principal  amount  of all funded  Commitments outstanding prior to such exercise of banker's lien, setoff or counterclaim or other event; provided, however, that, if any such purchase  or purchases  or adjustments  shall be made  pursuant to this Section 7.3 and the payment  giving rise thereto shall thereafter be recovered, such purchase  or purchases or adjustments shall be rescinded to the extent  of such recovery  and the purchase  price  or  prices  or  adjustment  restored  without interest.   Any Lender holding  a participation  in a funded  Commitment deemed to have been so purchased may exercise any and all rights of banker's lien, setoff or  counterclaim with respect  to any and all moneys owing to  such Lender by reason thereof  as fully as if  such Lender had made an advance in the amount of such participation. The Borrower expressly consents to the foregoing arrangement.

7.4Computations; Banking  Days. (a)·All computations of interest and fees shall be made by the Facility Agent or the Lenders, as the case may be, on the basis of a 360-day year, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which interest or fees are payable. Each determination by the Facility Agent or the Lenders of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) Whenever any payment hereunder or under the Note shall be stated to be due on a day other than a Banking Day, such payment shall be due and payable on the next succeeding Banking Day unless the next succeeding Banking Day falls in the following calendar month, in which case it shall be payable on the immediately preceding Banking Day.

8.EVENTS OF DEFAULT

8.1Events  of  Default.    In  the  event  that  any  of the  following  events  shall  occur  and  be continuing:

(a)Principal Payments. Any principal of the Facility is not paid on the due date therefore; or

(b)Interest  and  Other  Payments.   Any interest on the Facility or any other amount  becoming payable under this Agreement or any other Transaction Document is not paid within three (3) Banking Days from the date when due; or

(c)Representations, etc. Any representation, warranty or other statement made by any of the Security Parties in this Agreement, any of the other Transactions Documents or in any other instrument, document or other agreement delivered in connection herewith proves to have been untrue or misleading in any material respect as at the date as of which it was made or confirmed; or

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(d)Impossibility, Illegality. It becomes impossible or unlawful for any of the Security Parties to fulfill any of the covenants and obligations contained herein or in any Transaction Document, or for any of the Lenders to exercise any of the rights vested in any of them hereunder or under the other Transaction Documents; or

(e)Mortgage.  There is any default under the Mortgage; or

(f)Certain Covenants. Any Security Party defaults in the perfo1mance or observance of any covenant contained in Section 9.l (b), 9.l (d), 9.l (f), 9.l(m), 9. l (n), 9. l (o), 9.l (r),  9.l (v),  9.2  (other  than clauses (j), (1) and (m) thereof) and 9.3; or

(g)Covenants. One or more of the Security Parties default in the performance of  any term, covenant or agreement contained in this Agreement or in the other Transaction Documents, or in any other instrument, document or other agreement delivered in connection herewith or therewith, in each case other than an Event of Default referred to elsewhere in this Section 8.1, and such default continues unremedied for a period of ten (10) days after written notice thereof has been given to the relevant Security Party or Parties by the Facility Agent at the request of any Lender; or

(h)Indebtedness  and Other Obligations.  Any Security Party or any of its Subsidiaries  defaults in the payment when due (subject to any applicable grace period) of any Indebtedness  or of  any other indebtedness, in either case, in an outstanding principal amount equal to or exceeding Five Million Dollars ($5,000,000) individually or Twenty Million Dollars ($20,000,000) in the aggregate or such Indebtedness or other indebtedness is, or by reason of such default is subject to being, accelerated or any  party becomes entitled to enforce the security for any such Indebtedness or other indebtedness and such party shall take steps to enforce the same, unless  such default or enforcement  is being contested in  good faith and by appropriate proceedings or other acts and such Security Party has set aside on its books  adequate reserves with respect thereto; or

(i)Bankruptcy. Any Security Party commences any proceedings relating  to  any  substantial portion of its property under any reorganization, arrangement or readjustment  of debt, dissolution, winding up, adjustment,. composition, bankruptcy or  liquidation law or  statute of any jurisdiction, whether now or hereafter in effect (a "Proceeding"), or there is commenced against any thereof any Proceeding and such Proceeding remains undismissed or unstayed for a period of sixty (60) days; or any receiver,  trustee, liquidator or sequestrator of, or for, any thereof or any substantial portion of the property of any thereof is appointed and is not discharged within a period of sixty (60) days; or any thereof by any act indicates consent to or approval of or acquiescence in any Proceeding or to the appointment of any receiver, trustee, liquidator or sequestrator of, or for, itself or any substantial portion of its prope1ty; or

(j)Judgments. Any judgment or order is made the effect whereof would be to render invalid this Agreement or any other Transaction Document or any material provision thereof or any Security Party asserts that any such agreement or provision thereof is invalid; or judgments or orders for the payment of money (not paid or fully covered by insurance, subject to applicable deductibles) in excess of $2,500,000 in the aggregate for the Guarantor or its Subsidiaries (or its equivalent in any other currency) shall be rendered against the Guarantor and/or any of its Subsidiaries and such judgments or orders shall continue unsatisfied and unstayed for a period of thirty (30) days; or

(k)Inability to Pay Debts. Any Security Party is unable to pay or admits its inability to pay its debts as they fall due or a moratorium shall be declared in respect of any Indebtedness of any thereof; or

(1)Termination   of  Operations;   Sale  of  Assets.    Except  as  expressly  permitted  under   this Agreement, any Security Party ceases its operations or sells or otherwise disposes of all or substantially all of its assets or all or substantially all of the assets of any Security Party are seized or otherwise appropriated; or

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(m)Change in Financial Position. Any change in the operations or the financial position of any Security Party which, in the reasonable opinion of the Majority  Lenders, could reasonably be expected  to have a Material Adverse Effect; or

(n)Cross-Default. Any Security Party defaults under any material  contract  or  agreement  to which it is a party or by which it is bound including, but not limited to, the Initial Charter Party Agreements or any Approved Charter; or

(o)BRISA Debt. An BRISA Funding Event, BRISA Te1mination Event, Foreign Termination Event or Foreign Underfunding shall exist or occur that, in the reasonable opinion of the Majority Lenders, when taken together with all other BRISA Funding Events, BRISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or could reasonably be expected to exist or occur, result in liability to the Security Parties, their respective subsidiaries and BRISA Affiliates in the aggregate in excess of $1,000,000; or

(p)Change of Control.  A Change of Control has occurred; or

(q)Instability  of  a  Flag  State.   There exists instability  in the jurisdiction  where  the Vessel  is flagged, which, in the reasonable  opinion of the Majority Lenders, could reasonably be expected to have  a Material Adverse Effect; or

(r)Class  Certification  Withdrawal.   There occurs a withdrawal  of the Vessel's rating by  its Classification Society; or

(s)Arrest and/or Detention of the Vessel. There occurs any capture, seizure, arrest, detention or confiscation of the Vessel by any government or by persons acting or purporting to act on behalf of any government unless the Vessel is released and restored to the Borrower from such capture, seizure, arrest, detention or confiscation within fourteen (14) days after the occurrence thereof; or

(t)Vessel Transfer. The Vessel Transfer does not occur prior to October 31, 2014 pursuant to the terms and subject to the conditions of Section 12.2 and the Onmibus Assignment and Assumption Agreement, unless the amount available to be drawn under the Debt Service Letter of Credit is sufficient to cover the Debt Service due on the next Payment Date; or

(u)Cancellation  of Approved  Charter.  An Approved Charter with a duration of more than  12 months is terminated, unless the Borrower continues to pay the Debt Service; or

(v)Off Charter. The Vessel is off charter (other than for scheduled drydockings of the Vessel) for a continuous period of 14 days at any time, or 56 days in total in any 12-month period, unless  the Borrower continues to pay the Debt Service; or

(w)Material   Adverse   Effect.    There  occurs  any  event  or  condition  that  could  reasonably  be expected to have a Material Adverse Effect;

then, the Lenders' obligation to make the Facility available shall cease and the Facility Agent on behalf of the Lenders may, with the Majority Lenders' consent and shall, upon the Majority Lenders' instruction, by notice to the Borrower, declare the entire Facility, accrued interest and any other sums payable by the Borrower hereunder, under the Note and under the other Transaction Documents due and payable whereupon the same shall forthwith be due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; provided that upon the happening of an event specified in subclauses (i) or (k) of this Section 8.1, the Facility, accrued interest and any other sums payable by the Borrower hereunder, under the Note and under the other Transaction Documents shall be immediately due and payable without declaration, presentment, demand, protest or other notice to the Borrower all of which are expressly waived.

In such event, the Creditors, or any thereof, may proceed to protect and enforce their respective rights by action at law, suit in equity or in admiralty or other appropriate proceeding, whether for specific performance of any covenant contained in this Agreement or in the Note or in any other Transaction Document or in aid of the exercise of any power granted herein or therein, or the Lenders or the Facility Agent may proceed to enforce the payment of the Note when due or to enforce any other legal or equitable right of the Lenders, or proceed to take any action authorized or permitted by Applicable Law for the collection of all sums due, or so declared due, including, without limitation, the right to appropriate and hold or apply (directly, by way of set-off or otherwise) to the payment of the obligations of the Borrower to any of the Creditors hereunder, under the Note and/or under the other Transaction Documents (whether or not then due) all moneys and other amounts of the Borrower then or thereafter in possession of any Creditor, the balance of any deposit account (demand or time,  matured or unmatured) of the Borrower then  or thereafter with any Creditor and every other claim of the Borrower then or thereafter against any of the Creditors.

8.2Application   of   Moneys.     Except  as  otherwise  provided   in  any  Security  Document,  all moneys  received  by the Creditors  under  or pursuant  to  this Agreement,  the Note  or any of the  Security Documents after the happening of any Event of Default (unless cured to the  satisfaction of the  Majority Lenders) shall be applied by the Facility Agent in the following manner:

(1) first, in or towards the  payment  or  reimbursement  of  any  expenses  or liabilities incurred by any of the Creditors in connection with the ascertainment, protection or enforcement of its rights and remedies hereunder, under the Note and under the other Transaction  Documents;

(2)second,  in  or  towards  payment  of  any  interest  owing  m  respect  of  theFacility;

(3)third, in or towards repayment of the principal of the Facility;

(4)fourth, in or towards payment of all other sums which may be owing to any of the Creditors under this Agreement, under the Note and under the other Transaction Documents;

(5)fifth, the surplus (if any) shall be paid to the Borrower or to whomsoever else may be entitled thereto.

9.COVENANTS

9.1Affirmative Covenants. Each of the Security Parties hereby covenants and undertakes with the Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any of the Security Documents, it will:

(a)Perfonnance of Agreements. Duly perform and observe, and procure the observance and performance by all other parties thereto (other than the Lenders) of, the terms of this Agreement, the Note and the Security Documents;

(b)Notice of Default, etc. Promptly upon obtaining knowledge thereof, inform the Facility Agent of the occurrence of (a) any Event of Default or of any event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, (b) any litigation or governmental proceeding pending or threatened against any Security Party which could reasonably be expected to have a Material Adverse Effect, (c) the withdrawal of the Vessel's rating by its Classification Society or the issuance by the Classification Society of any recommendation or notation affecting class and (d) any other event or condition which is reasonably likely to have a Material Adverse Effect, in each case promptly, and in any event within three (3) Banking Days after becoming aware of the occurrence thereof;

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(c)Obtain Consents. Without prejudice to Section 2.1 and this  Section 9.1,  obtain  every consent and do all other acts and things which may from time to time be necessary or advisable for the continued due performance  of all its and the other Security Parties' respective obligations under this Agreement, under the Note and under the Security Documents;

(d)Financial Information. Deliver to the Facility Agent with sufficient copies for the Lenders to be distributed to the Lenders by the Facility Agent promptly upon the receipt thereof:

(i)as soon as available, but not later than one hundred fifty (150) days after the end of each fiscal year of the Guarantor, complete copies of the  consolidated  financial reports of the Guarantor and its Subsidiaries together with a separate financial report of the Borrower (together with a Compliance Certificate that includes, inter alia, a reconciliation of all of the differences between GAAP as at  June  30,  2014  and GAAP as at the time of delivery), all in reasonable detail which shall include at least the consolidated balance sheet of the Guarantor and its  Subsidiaries  and the profit and loss accounts and balance sheet of each Subsidiary, including the Borrower, as a separate column, as of the end of such year and the related statements of income for such year as well as the related statement of sources and uses of funds, cash flow and changes in the capital for such year for the Guarantor and its Subsidiaries, each as prepared in accordance with GAAP, all in reasonable detail, which shall be prepared by an Acceptable Accounting Firm and, with respect to the Guarantor, be audited reports;

(ii)as soon as available, but not later than ninety (90) days after the end of each of the first three fiscal quarters of the Guarantor, a  quarterly interim balance sheets and profit and loss statements of the Guarantor and its Subsidiaries and the related profit and loss statements as well as the related statement of sources and uses of funds, cash flow and changes in the capital for such year for the Guarantor and its Subsidiaries (together with a Compliance Certificate that includes, inter alia, a reconciliation of all of the differences between GAAP as at  June  30,  2014  and GAAP as at the time of delivery), all in reasonable detail, unaudited, but certified to be true and complete by the chief financial officer of the Guarantor;

(iii)as soon as available, but not later than the end of each of the second and fourth fiscal quarters of the Guarantor, an Asset Maintenance Compliance Certificate in reasonable detail and certified to be true and complete by the chief financial officer of the Guarantor (it being understood that appraisals of the Fair Market Value of the Vessel for such Asset Maintenance Compliance Certificate shall be provided to the Facility Agent no later than 15 days prior thereto);

(iv)promptly upon the mailing thereof to the shareholders of the Guarantor, copies of all financial statements, reports, proxy  statements  and other communications  provided to the Guarantor's shareholders;

(v)within ten (10) days of the Guarantor's receipt thereof, copies of all audit letters or other correspondence from any external auditors including material financial information in respect of the Guarantor and its Subsidiaries; and

(vi)an updated business forecast, together with the financial statements required to be delivered in clause (i) above;

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(vii)not later than the third Friday of February of each fiscal year, a budget for operating expenditures of the Borrower relating to the Vessel for the following twelve (12) month period in form and substance satisfactory to the Facility Agent; and

(viii)such other statements (including, without  limitation,  monthly  consolidated statements of operating revenues and expenses), lists of assets and  accounts, budgets, forecasts, reports and other financial information with respect to  its business as the Facility Agent may from time to time reasonably request, certified to be true and complete by the chief financial officer of the Guarantor;

(e)Contingent Liabilities. For inclusion with each Compliance  Certificate  delivered  in connection with Sections 9.1(d)(i) and 9.1(d)(ii), and in any event upon the reasonable request of the Facility Agent, an accounting of all of the contingent liabilities of each Security Party;

(f)Vessel Covenants.  With respect to the Vessel:

(i)keep the  Vessel registered in the name of the Borrower under the flag of an Approved  Jurisdiction;

(ii)keep the Vessel in good and safe condition and state of repair (loss or damage by casualty or condemnation excepted);

(iii)keep the Vessel classed in the highest classification and rating for vessels of the same age and type with its Classification Society without any outstanding recommendations or qualification unless otherwise agreed by the Facility Agent in writing;

(iv)keep the Vessel insured in accordance with the provisions of the Mortgage recorded against it and the requirements thereof in respect of such insurances have been complied with;

(v)be in possession of a proper trading certificate at all times;

(vi)notify the Facility Agent of all modifications to the Vessel and of the removal of any parts or equipment from the Vessel;

(vii)provide the Facility Agent with all requested Vessel related information;

(g)Vessel Valuations. For inclusion with each Asset Maintenance  Compliance Certificate delivered pursuant to Section 9.1(d)(iii) (for the second and fourth fiscal quarters of the Guarantor or more frequently at the Facility Agent's option upon and during the continuation of a Default or an Event of Default), and in any event upon the reasonable request of the Facility Agent, the Borrower shall obtain appraisals of the Fair Market Value of the Vessel. All valuations are to be at the Borrower's cost. In the event the Borrower fails or refuses to obtain the valuations requested pursuant to this Section 9.1(g) within ten (10) days of the Facility Agent's request therefore, the Facility Agent will be authorized to obtain such valuations, at the Borrower's cost, from one of the Approved Ship Brokers, which valuations shall be deemed the equivalent of valuations duly obtained by the Borrower pursuant to this Section 9.l(g), but the Facility Agent's actions in doing so shall not excuse any default of the Borrower under this Section 9.1(g);

(h)Corporate Existence. Do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence in good standing and all licenses, franchises, permits and assets necessary to the conduct of its business;

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(i)Books  and  Records.   At all times keep proper books of record  and account  into which  full and correct entries shall be made in accordance with GAAP;

(j)Taxes    and    Assessments.       Pay   and    discharge   all   material    taxes,    assessments    and governmental charges or levies imposed upon it or upon its income or property prior to the date upon which penalties attach thereto; provided, however, that it shall not be required to pay and discharge, or cause to be paid  and  discharged,  any  such  tax,  assessment,  charge  or  levy  so  long  as  the  legality  thereof  shall  be contested  in good  faith  and  by  appropriate  proceedings  or  other  acts  and  it  shall  set  aside  on  its  books adequate reserves with respect thereto;

(k)Inspection. Allow any representative or representatives designated by the Facility Agent, subject to applicable laws and regulations, to visit and inspect any of  its properties,  and,  on request,  to examine its books of account, records, reports and other papers and to discuss its  affairs,  finances  and accounts with its officers, all at such reasonable times and as often as the Facility Agent reasonably requests and at the expense of the Borrower. In addition, the Borrower shall provide the Facility Agent with (and cause any Approved Charter, other than the Initial Charter Party Agreement, to contain a requirement for the provision with full rights of disclosure to the Facility Agent of) a copy of any jointly appointed independent inspection report accepted and signed by the Borrower, any deponent owner and the relevant charterer in respect of the Vessel issued during the term of this Agreement, promptly upon the issuance of any such inspection report and whether or not the Borrower is party to any such inspection repo1t;

(1)       Inspection  and  Survey Reports.  If the Lenders shall so request, the Borrower shall provide the Lenders with copies of all internally generated inspection or survey reports on the Vessel;

(m)Compliance with Statutes, Agreements, etc. Do or cause to be done all things (including, but not limited to, obtaining all consents) necessary to comply with all material contracts or agreements to which any of the Security Parties is a party, and all material laws, and the rules and regulations thereunder, applicable to such Security Party, including, without limitation, those laws, rules ,and regulations relating to employee benefit plans and environmental matters except where failure to do so would not be reasonably likely to have a Material Adverse Effect  and shall cause the Technical Manager and the Commercial Manager to comply with (or shall cause to be included in any Approved Charter other than the Initial Charter Party Agreement a provision requiring any charterer party there to comply with in respect of the Vessel and its operations) all national and international laws, directives, regulations, decrees, rulings and analogous rules, including but not limited to, rules relating to international sanctions;

(n)Environmental Matters. Promptly upon the occurrence of any of the following conditions, provide to the Facility Agent a certificate of a chief executive officer of the Guarantor, specifying in detail the nature of such condition and its proposed response or the proposed response of any Environmental Affiliate: (a) its receipt or the receipt by any Environmental Affiliate of any written communication whatsoever that alleges that such Person is not in compliance with any applicable Environmental Law or Environmental Approval, if such noncompliance could reasonably be expected to have a Material Adverse Effect, (b) knowledge  by it or any Environmental Affiliate that there exists any Environmental Claim pending or threatened against any such Person, which could reasonably be expected to have a Material Adverse Effect, or (c) any release, emission, discharge or disposal of any material that could form the basis of any Environmental Claim against it or against any Environmental Affiliate, if such Environmental Claim could reasonably be expected to have a Material Adverse Effect. Upon the written request by the Facility Agent, the Borrower will submit to the Facility Agent at reasonable intervals, a report providing an update of the status of any issue or claim identified in any notice or certificate required pursuant to this subsection;

(o)Insurance. Maintain with financially sound and reputable insurance companies insurance on all its properties and against all such risks and in at least such amounts and with such deductibles as are usually insured against by companies of established reputation engaged in the same or similar business from time to time;

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(p)Vessel Management. Cause the Vessel to be managed by the Guarantor or a wholly-owned Subsidiary thereof (it being understood that the technical management of the Vessel may be subcontracted to Wallem  Shipmanagement  Hong Kong);

(q)Brokerage   Commissions,   etc.    Indemnify  and  hold  each  of  the  Agents  and  the  Lenders harmless from any claim for any brokerage commission, fee or compensation from any broker or third party resulting from the transactions  contemplated hereby;

(r)ISM Code, ISPS Code and MTSA Matters. (i) Procure that the Operator will comply with and ensure that the Vessel will comply with the requirements of the ISM Code, ISPS Code and MTSA in accordance with the implementation schedules thereof, including (but not limited to) the maintenance and renewal of valid certificates, and when required, security plans, pursuant thereto throughout the term of the Facility; and (ii) procure that the Operator will immediately inform the Facility Agent if there is any threatened or actual withdrawal of its DOC, SMC or the ISSC in respect of the Vessel; and (iii) procure that the Operator will promptly inform the Facility Agent upon the issuance to the Borrower or Operator of a DOC and to the Vessel of an SMC or ISSC;

(s)BRISA. Forthwith upon learning of the existence or occurrence of any BRISA Funding Event, BRISA Termination Event, Foreign Termination Event or Foreign Underfunding Event that, when taken together with all other BRISA Funding Events, BRISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or which could reasonably be expected to exist or occur, could reasonably be expected to result in liability to the Security Parties, their respective subsidiaries and BRISA Affiliates in the aggregate in excess of $500,000, furnish or cause to be furnished to the Lenders written notice thereof;

(t)Evidence of Current COFR. If the Lenders shall so request, provide the Lenders with copies of the current Certificate of Financial Responsibility pursuant to the Oil Pollution Act 1990 for the Vessel;

(u)Listing on NYSE. With respect to the Guarantor, maintain its listing on the New York Stock Exchange;

(v)Change  of  Ownership.   Ensure no change in the ownership of the capital stock or  other equity interest of the Borrower;

(w)UCC Financing  Statements.  Ensure that within 1 Business Day after the Drawdown Date,

(A) an amendment to the UCC financing statement filed in favor of Regions Bank referenced in Section

4.l (dd)(ii) shall be filed with the Secretary of State in the State of New York and (B) the UCC financing Statement filed in favor of Wells Fargo Bank Northwest, National Association, Trustee on February 24, 2012 shall be terminated, in each case, with satisfactory evidence of such filings to be provided to the Facility Agent Maintenance of Properties. Keep all material property necessary in its business in good working order and condition (loss or damage by casualty or condemnation excepted);

(y)Know Your  Customer  Requirements.  Provide all documentation (including  documentation requested by the Lenders or any prospective Lenders subsequent to the date hereof) to the satisfaction of the Lenders  or prospective  Lenders  (as the  ease  may  be)  in  connection  with  their  know  your customer requirements, including but not limited to:

(i)completed bank account opening mandates with telephone and fax indemnities to include the list of the all account holders' authorized signatories and specimens of their signatures;

(ii)certified list of directors, including titles, business and residential addresses and dates of birth;

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(iii)certified  true  copy  of photo  identification  (i.e. passport  or driving  license) and evidence of residential address for all authorized signatories;

(iv)with respect  to  the Borrower,  certificate  of ultimate  beneficial  ownership, certified by the respective secretary or assistant secretary of such entity; and

(v)non-resident declaration forms, if applicable;

(z)Classification    Society   Instructions    and   Undertaking.     The  Borrower   shall   instruct   the Classification Society through a letter sent by the Borrower to the Classification Society in the form attached hereto as Exhibit H-1 (and procure that the Classification Society undertakes  with  the  Security  Trustee through a letter in the form attached hereto as Exhibit H-2):

(i)to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the Classification Society in relation to the Vessel;

(ii)to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class, related records and other information of the Borrower and the Vessel either (i) electronically (through the Classification Society directly or by way of indirect access via the Borrower's account manager and designating the Security Trustee as a user or administrator of the system under its account) or (ii) in person at the offices of the Classification Society, and to take copies of them electronically or otherwise;

(iii)to notify the Security Trustee immediately in writing and by Email at techcom@dvbbank.com  if the Classification Society:

(1)receives notification from the Borrower or any other person that the Vessel's Classification Society is to be changed; or

(2)becomes aware of any facts or matters which may result in or have resulted in a condition of class or a recommendation, or a change, suspension, discontinuance, withdrawal or expiry of the Vessel's class under the rules or terms and conditions of the Borrower's or the Vessel's membership of the Classification Society;

(iv)following receipt of a written request from the Security Trustee:

(1)to confirm that the Borrower is not in default  of any of its contractual obligations or liabilities to the Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Classification Society; or

(2)if the Borrower is in default of any of its contractual obligations or liabilities to the Classification Society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Classification Society; or

(3)to provide any other information reasonably requested;

(aa)Further Assurances. Promptly upon the written request of the Facility Agent:

(i)correct any material defect or error that may be discovered in any Transaction Document or in the execution, acknowledgement, filing or recordation thereof; and

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(ii)do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re­ register any and all such further acts, deeds, conveyances, pledge agreements; mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments as the Facility Agent, may reasonably require from time to time in order to:

(1)carry out the purposes of the Transaction Documents;

(2)to the fullest extent permitted by applicable law, subject each of item  of Collateral to the Liens now or hereafter intended to be covered by the Transaction Documents pursuant to the terms thereof;

(3)perfect and maintain the validity, effectiveness and priority of the Liens intended to be created under the Transaction Documents; and

(4)assure, convey, grant, assign, transfer, preserve, protect and confirm to the Security Trustee, the rights granted or now or hereafter intended to be granted to the Security Trustee under any Transaction Document or under any other instruments executed in connection with any Transaction Document to which any Security Party is or is to be a party.

9.2Negative Covenants. Each of the Security Parties hereby covenants and unde1takes with the Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any other Transaction Documents, it will not, without the prior written consent of the Majority Lenders (or all of the Lenders if required pursuant to Section 17.8):

(a)Liens.  Create, assume or permit to exist, any mortgage, pledge,  lien, charge, encumbrance or any security interest whatsoever upon any Collateral or, in respect of the Borrower and the Guarantor, other property except:

(i)liens disclosed in Schedule III;

(ii)liens to secure Indebtedness permitted under Section 9.2(m), such liens to be limited to the vessels constructed or acquired;

(iii)liens for taxes not yet payable for which adequate reserves have been maintained;

(iv)the Mortgage, the Assignments and other liens in favor of the Security Trustee or the Lenders;

(v)liens, charges and encumbrances against the Vessel permitted  to  exist  under  the terms of the Mortgage;

(vi)pledges of certificates of deposit or other cash collateral securing reimbursement obligations in connection with letters of credit now or hereinafter issued for  its account in connection with the establishment  of its financial responsibility under 33

C.F.R.  Part  130 or 46  C.F.R.  Part  540,  as the  case may be,  as the  same may  be amended and replaced;

(vii)pledges or deposits to secure obligations under workmen's compensation laws or similar legislation, deposits to secure public or statutory obligations, warehousemen's or other like liens, or deposits to obtain the release of such liens and deposits to secure surety, appeal or customs bonds on which it is the principal, as to

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all of the foregoing, only to the extent arising and continuing in the ordinary course of business; and

(viii)other liens, charges and encumbrances incidental to the conduct of its business, the ownership of its property and assets which are not more than thirty  (30)  days overdue and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of  its business;

(b)Third   Party   Guaranties.    Guarantee  the  obligations  of  any  third  party,  except  a  direct  or indirect  subsidiary  of the Guarantor, whether  or not  affiliated  with such Security Party, provided,  that  the Guarantor may guarantee the obligations of any third party in which the Guarantor owns an equity interest if such guarantee is of a percentage of the obligations of such third party being guaranteed which is no more than the percentage  of the Guarantor's equity ownership  in such third party.   By way of  illustration, if the Guarantor owns a 35% equity interest in a third party, the Guarantor may guarantee up to 35% of such third party's debt;

(c)Liens  on  Shares  of Borrower.  With respect to the Guarantor, create, assume or permit  to exist, any mortgage, pledge, lien, charge, encumbrance or any security interest whatsoever upon the shares of the Borrower;

(d)Subordination   of   Inter-Company   Indebtedness.    Upon  the  occurrence  and  during   the continuance of an Event of Default, allow any payments to be made by any of the Security Parties on any inter-company Indebtedness until such time as the Facility is paid in full;

(e)Transaction  with  Affiliates.   Enter into any transaction with an Affiliate, other than on  an arm's length basis;

(f)Change of Flag, Class, Management or Ownership. Change the flag of the Vessel other than to an Approved Jurisdiction, its Classification Society other than to another member of the International Association of Classification Societies acceptable to each of the Lenders, the management of the Vessel other than to the Guarantor or a wholly-owned Subsidiary thereof (it being understood that the technical management of the Vessel may be subcontracted to Walled Shipmanagement Hong Kong);

(g)Chartering. Enter into any charter party agreement with respect to the Vessel, other than an Approved Charter, or permit the Vessel to be sub-chartered, in each case, without the prior consent of the Majority Lenders, which consent shall not be unreasonably withheld;

(h)Change in Business. Materially change the nature of its business or commence any business materially different from its current business;

(i)Sale of Assets. Other than as reasonably acceptable to the Majority Lenders, sell, or otherwise dispose of, the Vessel or any other asset (including by way of spin-off, installment sale or otherwise) which is substantial in relation to its assets taken  as a whole; provided, however, that the Borrower may sell the Vessel to a third party in an arm's length transaction provided that either (i) the Facility shall be repaid in full together with the Prepayment Premium, as applicable, and the costs and expenses provided for in Section 13.4 or (ii) the Borrower places the amount refe1red to in clause (i) above on charged deposits with the Facility Agent;

(j)Changes  in  Offices  or Names.   Change the location of its chief executive office, its  chief place of business or the office in which its records relating to the earnings or insurances of the  Vessel are kept or change its name unless the Lenders shall have received sixty (60) days prior written  notice of such change;

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(k)Consolidation  and Merger.  Consolidate with, or merge into, any corporation or other entity,· or  merge  any  corporation  or  other  entity  into  it;  provided,  however,  that  the  Guarantor  and/or  either Borrower may merge with any Subsidiary thereof or any other Person if (A) at the time of such transaction and after giving effect thereto, no Default or Event of Default shall have occurred or be continuing, (B) the surviving entity of such consolidation  or merger  shall be the Guarantor or the respective Borrower  and (C) after giving effect to the transaction,  the Guarantor's  Consolidated  Tangible Net  Worth  shall be greater or equal to its Consolidated Tangible Net Worth prior to the merger;

(1)Change Fiscal Year.  In the case of the Guarantor, change its fiscal year;

(m)Indebtedness. In the case of the Security Parties, incur any new Indebtedness (which, for the sake of clarity, shall exclude any Indebtedness pursuant to this Agreement) other than (i) Indebtedness incurred to finance the acquisition and/or construction of any vessels; (ii) Indebtedness incurred by the Guarantor to finance the acquisition of any shipping related asset, or any railroad or railcar repair yard asset ancillary to the Guarantor's existing railroad business; (iii) Indebtedness incurred by the Guarantor to finance the acquisition of the equity interests of any company owning shipping related assets whose primary business activity is shipping or any company owning railroad or railcar repair yard assets ancillary to the Guarantor's existing railroad business whose primary business activity is related to such assets; (iv) any Indebtedness incurred in connection with any refinancing of any Indebtedness permitted under this Section 9.2(m)(i) through (iii), provided, however, that in each exception listed in clauses (i) through (iii) above, the principal amount of such Indebtedness shall not exceed eighty percent (80%) of such acquisition and/or construction price; and (v) Indebtedness incurred by the Guarantor in connection with any guarantees permitted under Section 9.2(b) hereof;

(n)Limitations on Ability to Make Distributions. Create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to pay dividends or make any other distributions on its capital stock or limited liability company interests, as the case may be, to the Borrower or the Guarantor, except that the Borrower. may declare a dividend or make other distributions to the Guarantor if and so long as both immediately before and after payment of such dividend or distribution, no Default or Event of Default shall have occurred and be continuing and the Security Parties are in compliance with Sections 9.3, 9.4 and 10.3;

(o)No Money Laundering. Contravene any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (2005/60/EC) of the Council of the European Communities) and comparable United States Federal and state laws;

(p)Charter  Party  Agreements.   Amend  any  material prov1s10n  in the Initial Charter  Party Agreement or any Approved Charter, without the prior written consent of the Facility Agent; and

(q)Nuclear Waste, War Zone, Etc.

(i)Permit the Vessel to carry nuclear waste or material; or

(ii)in the event of hostilities in any part of the world (whether war is declared or not), cause or permit the Vessel to enter or trade to any zone which is declared a war zone by any government or by the Vessel's war risks insurers, unless the Borrower has (at its expense) effected the special, additional or modified insurance cover which the Security Trustee may reasonably require, prior to entering into such war zone;

9.3Financial Covenants. The Guarantor hereby covenants and undertakes with the Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any of the Security Documents, it will:

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(a)Maximum   Consolidated   Leverage   Ratio.     Maintain  a  Consolidated   Leverage  Ratio  not greater than 4.25:1.00, measured at the end of each fiscal quarter of the Guarantor based on the four most recent fiscal quarters for which financial information is available;

(b)Working Capital. Maintain on a consolidated basis a ratio of current  assets  to  current liabilities of not less than 1.00 to 1.00, measured at the end of each fiscal quarter of the Guarantor based on the four most recent fiscal quarters for which financial information is available;

(d)Minimum Liquidity. Maintain Liquidity of not less than $20 million at all times, measured as of the end of each fiscal quarter of the Guarantor;

(e)Minimum Consolidated Tangible Net Worth. Maintain a Consolidated Tangible Net Worth, as measured at the end of each fiscal quarter of the Guarantor, in an amount of not less than the sum of Two Hundred Twenty Eight Million Dollars ($299,786,000) plus fifty percent (50%) of all  Consolidated  Net Income of the Guarantor and its Subsidiaries earned after March 31, 2014 plus one hundred percent (100%) of the proceeds of all issuances of equity interests (common or preferred) of the Guarantor and its Subsidiaries (on a consolidated basis) received after March 31, 2014 (other than issuances in connection with the exercise by a present or former employee, officer or director under a stock incentive plan, stock option plan or other equity-based compensation plan or arrangement);

(f)Consolidated  EBITDA to Consolidated  Interest  Expense.  Maintain, on a consolidated basis, a ratio of Consolidated EBITDA to Consolidated Interest Expense of not less than 2.50 to 1.00, measured at the end of  each  fiscal quarter  of each fiscal year based  on the  four most  recent  fiscal  quarters  for which financial information is available;

(g)Minimum  Consolidated  Fixed  Charge  Coverage  Ratio.   Maintain  a Consolidated  Fixed Charge Coverage Ratio of at least (i) 1.20:1.00, beginning with the fiscal quarter ending September 30, 2014 through the fiscal quarter of the Guarantor ending June 30, 2015 and (ii) 1.25:1.00, thereafter,  measured at the end of each fiscal quarter of the Guarantor based on the four most recent fiscal quarters of the Guarantor for which financial information is available;

(h)In the event the Guarantor or any of its Subsidiaries shall  enter into, assume or otherwise become bound by or obligated under any agreement creating or evidencing Indebtedness, and any financial covenant included therein, in the sole judgment of the Facility Agent or the Majority Lenders, is more restrictive than the financial covenants set forth in this Section 9.3 at such time or is different  from the subject matter of such financial covenants (each such covenant,  a  "Specified  Covenant"), this  Agreement shall, without any further action on the part of the Facility Agent, the Lenders or the Creditors, be deemed to be amended automatically to include each such Specified Covenant.

9.4Asset Maintenance. If, at any time from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any other Transaction Documents, the Fair Market Value of the Vessel is less than the Required Percentage of the outstanding amount of the Facility, the Borrower shall, immediately following receipt by the Borrower  of written notice from the Facility Agent notifying the Borrower of such shortfall and specifying the amount thereof (which amount shall, in the absence of manifest error, be deemed to be conclusive and binding on the Borrower), either

(i) prepay such amount of the Facility (together with interest thereon and any other monies payable in respect of such prepayment pursuant to Section 5.4) as shall result in the Fair Market Value of the Vessel being not less than the Required Percentage of the outstanding amount of the Facility or (ii) place on charged deposits with the Facility Agent an amount in Dollars (together with interest thereon and any other monies payable in respect of such prepayment pursuant to Section 5.4) as shall result in the Fair Market Value of the Vessel together with the amount deposited being not less than the Required Percentage of the outstanding amount of the Facility.  The charged deposit shall be released to the Borrower when the Fair Market Value of the Vessel is not less than the Required Percentage of the outstanding amount of the Facility.

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10.ACCOUNTS.

10.1General. From the date hereof and so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any other Transaction Documents, each of the Borrower and the Guarantor, as the case may be, agrees to comply or cause compliance with the following provisions of this Section 10 except as the Facility Agent, with the consent of the Majority Lenders, may  approve from time to time in writing, such approval not to be unreasonably withheld.

10.2Payment of Earnings. The Borrower shall ensure that all Earnings of the Vessel are to be paid to the Earnings Account.

10.3Monthly Retentions. The Borrower shall ensure that (x) all Earnings of the Vessel paid into the Earnings Account on or prior to the 15°1  day of each calendar month shall be transferred to the Retention Account and (y) all or a portion of the Earnings of the Vessel paid into the Earnings Account on or after the 15111 day of each calendar month shall be transferred to the Retention Account, so that on the last day of each calendar month, an aggregate amount equal to one-third of the Debt Service payable on the next Payment Date is transferred to the Retention Account. The frequency and amount of such transfer(s) may be modified in the reasonable discretion of the Facility Agent if the payment intervals under the relevant Approved Charter changes.

10.4Debt Service Letter of Credit.

(a)The Borrower  shall cause to be issued by the Letter of Credit Bank an irrevocable, first demand letter of credit (the "Debt Service Letter of Credit") for the benefit of the Security Trustee and maintain such letter of credit so long as any principal, interest or other moneys are owing in respect of this Agreement, the Note or any other Transaction Documents.

(b)Such Debt Service Letter of Credit shall:

(i)have the face amount of $4,500,000 on the Closing Date to be adjusted at the determination of the Facility Agent, taking into consideration (x) the final employment rate agreed between the Borrower and the Initial Charterer for an international flagged vessel and

(y) whether or not interest under this Agreement is fixed (and if it is hedged, the achievable fixed rate) and to be reduced quarterly by an amount equal to $190,000, commencing on the first Payment Date after the final face amount is determined by the Facility Agent pursuant to this clause (i) until the face amount becomes $2,000,000;

(ii)contain an evergreen provision that automatically renews the expiry date; and

(iii)be on terms and conditions that are otherwise acceptable to the Facility Agent.

(c)The Borrower shall cause the Letter of Credit Bank to inform the Facility Agent at least 60 days prior to the stated expiry date whether or not the Debt Service Letter of Credit will be renewed.

(d)If (i) there occurs an Event of Default that is continuing or (ii) the Debt Service Letter of Credit is not renewed 60 days prior to the stated expiry date, the Security Trustee at its option may draw upon the Debt Service Letter of Credit and apply the proceeds  from  such  drawing  to  prepay  the Facility, and Section 5 shall apply in relation to any such prepayment.

10.5Shortfall  in  Earnings.    If the  aggregate  Earnings  received  in the  Earnings  Account  are insufficient in any month for the required amount to be transferred to the Retention Account under  Section 10.3, the Borrower shall immediately deposit an amount equal to such deficiency into the Retention Account.

10.6Transfers from Retention Account; Application of Retentions.

(a)The Borrower shall ensure that on each Payment Date, the amount  of  the  Debt Service payable on such Payment Date is transferred (and the Borrower hereby authorizes the Facility Agent to transfer such amount) from the Retention Account to the Facility Agent's account specified in Section 7.1.

(b)Upon the occurrence and during the continuation of an Event of Default, without prejudice to any other right the Security Trustee may have under the Transaction Documents, the Facility Agent may withdraw from the Earnings Accounts any Excess Cash Flow and, at the Facility Agent's option:

(i)transfer any portion of such Excess Cash Flow to the Retention Account; or

(ii)apply any portion  of such Excess  Cash Flow to prepayment  of the Facility  on the next Payment Date, and Section 5 shall apply in relation to any such prepayment.

(c)Any amount deposited in the Retention Account shall be retained  as security and no funds may be withdrawn by the Borrower from the Retention Account at any time, so long as any principal, interest or other moneys are owing in respect of this Agreement or the other Transaction Documents.

10.7Location of Accounts. Each of the Borrower and the Guarantor, as the case may be, shall promptly:

(a)comply with any requirement of the Facility Agent as to the location or re-location of the Earnings Account and the Retention Account (or either of them), and without limiting the foregoing, each of the Borrower and the Guarantor agrees to segregate the Earnings Account and the Retention Account (or any of them) from the banking platform on which their other accounts are located or designated; and

(b)execute any documents which the Facility Agent specifies to create or maintain in favor of the Security Trustee a security interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Account and the Retention Account.

10.8Debits for Expenses. The Facility Agent, upon providing the Borrower and the Guarantor with one (1) Banking Day's prior notice, shall be entitled (but not obliged) from time to time to debit the Earnings Account or the Retention Account in order to discharge any amount due and payable under Section

15.2 or 19.8 to a Creditor or payment  of which any Creditor has become entitled to demand under  Section 15.2 or  19.8.

10.9Borrower's Obligations Unaffected.  The provisions of this Section 10 do not affect:

(a)theliability of the Borrower to make payments of principal and interest on the due dates; or

(b)any other liability or obligation of the Borrower or any other Security Party under any Transaction Document

11.GUARANTEE

11.1The Guarantee. The Guarantor hereby irrevocably and unconditionally guarantees to each of the Creditors and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Facility made by the Lenders to the Borrower and evidenced by the Note and all other amounts from time to time owing to the Creditors by the Borrower under this Agreement, under the Note and under any of the Transaction Documents,   in  each  case  strictly  in  accordance  with  the  terms  thereof  (such  obligations  being  herein

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collectively called the "Guaranteed Obligations"). The Guarantor hereby further agrees that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor will promptly pay the same, without any demand or  notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

11.2Obligations Unconditional. The obligations of the Guarantor  under  Section  11.1  are absolute, unconditional and irrevocable, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower under this Agreement, the Note or any other agreement or instrument referenced to herein or therein, or any substitution, release or exchange of any other guarantee of, or security for, any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this  Section 11.2 that the obligations of the Guarantor hereunder shall be absolute, unconditional and irrevocable, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantor hereunder, which shall remain absolute, unconditional  and in-evocable as described above:

a.at any time or from time to time, without notice to the Guarantor, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

b.any of the acts mentioned in any of the provisions of this Agreement or the Note or any other agreement or instrument referred to herein or therein shall be done or omitted;

c.the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended  in  any respect, or any right under this Agreement or the Note or any other agreement or instrument referenced to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefore shall be released or exchanged, in whole or in part,  or otherwise dealt with; or

d.any lien or security interest granted to, or in favor of, the Security Trustee or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected.

The Guarantor hereby expressly waives diligence, presentment, demand of payment, protest  and all notices whatsoever, and any requirement that any  Agent or any Lender exhaust any right, power or  remedy  or proceed against the Borrower under this Agreement or the Note or  any  other  agreement  or  instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed  Obligations.

11.3Reinstatement. The obligations of the Guarantor under this Section 11 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the B01rower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any Proceedings and the Guarantor agrees that it will indemnify each Creditor on demand for all reasonable costs and expenses (including, without limitation, fees of counsel) incurred by such Creditor in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

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11.4Subrogation. The Guarantor hereby irrevocably waives, but only until all amounts payable hereunder by the Guarantor to the Creditors  (or any of them) have been paid  in full, any and all rights to which any of them may be entitled by operation of law or otherwise, upon making any payment hereunder to be subrogated to the rights of the payee against the Borrower with respect to such payment or to  be reimbursed, indemnified or exonerated by or to seek contribution from the Borrower in respect thereof.

11.5Remedies. The Guarantor agrees that, as between the Guarantor and the Lenders, the obligations of the Borrower under this Agreement and the Note may be declared to be forthwith due and payable as provided in Section 8 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 8) for purposes  of Section 11.1 notwithstanding  any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall fo1ihwith become due and payable by the Guarantor for purposes of Section 11.1.

11.6Joint,   Several  and   Solitary  Liability.   The Guarantor's  obligations  and liability under  this Agreement shall be on a "solitary" or "joint and several" basis along with Borrower to the same degree and extent as if the Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-maker of the Guaranteed Obligations. In the event that there is more than one Guarantor under this Agreement,  or in the event  that  there  are  other  guarantors,  endorsers  or  sureties  of  all  or  any  portion  of  the  Guaranteed Obligations,  the Guarantor's  obligations  and liability hereunder  shall further be on a "solitary" or "joint and several" basis along with such other guarantors, endorsers and/or sureties.

11.7Continuing Guarantee. The guarantee in this Section 11 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.

12.ASSIGNMENT

12.1Generally. This Agreement shall be binding upon, and inure to the benefit of, each of the Security Parties and each of the Creditors and their respective successors and assigns.

12.2Assignment by Security Parties.

(a)The Security Parties may not assign any of their respective rights or obligations hereunder without the written consent of the Lenders.

(b)Notwithstanding the foregoing clause (a), the Initial Borrower may assign its rights and obligations under the Transaction Documents to the Ultimate Borrower in connection with the Vessel Transfer; provided, (x) before and after giving effect to the Vessel Transfer, no Event of Default nor any event which with the giving of notice or lapse of time or both would constitute an Event of Default shall have occurred and be continuing; and (y) the following conditions precedent shall have been satisfied:

(i)Corporate Authority. The Facility Agent shall have received from the Ultimate Borrower the documents described in Section 4.l (a)  in  form  and  substance satisfactory to the Facility Agent and its legal advisers, or a certification that such documents have not changed since the Closing Date and remain in full force and effect;

(ii)Bill of Sale. The Initial Borrower and the Ultimate Borrower shall have duly executed and delivered a bill of sale relating to the transfer of the Vessel in form and substance acceptable to the Facility Agent;

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(iii)Omnibus  Assignment   and  Assumption   Agreement.    The Initial  B01Tower  and  the Ultimate Borrower shall have duly executed and delivered the Omnibus Assignment and Assumption Agreement to the Facility Agent;

(iv)Note.  The Ultimate Borrower  shall have duly executed and delivered the Note to the Facility Agent;

(v)Environmental Claims. The Lenders shall be satisfied that the Ultimate Borrower is not subject to any Environmental Claim which could reasonably be expected to have a Material Adverse Effect.

(vi)Legal Opinions. The Facility Agent, on behalf of the Agents and the Lenders, shall have received opinions addressed to the Facility Agent from (i) Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., special counsel to the Ultimate Borrower, (ii) the Ultimate Borrower's Marshall Islands counsel, and (iii) Seward & Kissel LLP, special counsel to the Agents and the Lenders, in each case in such form as the Facility Agent may require, as well as such other legal  opinions  as  the Lenders shall have required as to all or any matters under the laws of New York and the Republic of the Marshall Islands;

(vii)Officer's Certificate. The Facility Agent shall have received a certificate signed by the President or other duly authorized executive officer of the Ultimate Borrower certifying that under applicable law existing on the date hereof, the Ultimate Borrower shall not be compelled by law to withhold or deduct any Taxes from any amounts to become payable to the Facility Agent for the account of the Creditors hereunder;

(viii)Approved Charter. The Borrower shall have delivered to the Facility Agent copies, certified as true and complete by an  officer of the Borrower, of the relevant Approved Charter (or the appropriate notation agreement thereof from the Initial Borrower to the Ultimate Borrower);

(ix)Accounts. The Facility Agent shall have received evidence that (i) all amounts on deposit in the Earnings Account and the Retention Account that are established in the name of the Initial Borrower, shall have been transferred to the corresponding accounts established  in the name of the Ultimate Borrower and (ii) the Earnings Account and the Retention Account in the name of the Initial Borrower shall henceforth have been closed;

(x)UCC Filings. The Facility Agent shall have received evidence that Uniform Commercial Code Financing Statements have been filed in the District of Columbia and in such other jurisdictions as the Facility Agent may reasonably require;

(xi)Financial Statements. The Ultimate Borrower shall deliver to the Facility Agent the financial statements of the Ultimate Borrower satisfying the requirements set forth in Section 9. l (d)(i) and (ii) for the fiscal year ending December  31,  2013  and  such other fiscal periods as the Facility Agent may reasonably specify;

(xii)Licenses,   Consents   and   Approvals.     The  Facility  Agent  shall  have   received satisfactory evidence that all  necessary  licenses,  consents  and   approvals in connection with the transactions  contemplated by this Agreement,  the Note, the Security Documents and the Fee Letter have been obtained in respect of the Ultimate Borrower.

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(xiii)Know Your Customer Requirements. The Facility Agent shall have received, to the extent any update is required, documentation to its satisfaction in connection with its know your customer requirements.

(xiv)Loan Administration Form. The Facility Agent shall have received a duly executed Loan Administration  Form from the Ultimate Borrower.

(xv)Vessel Documents.   The Facility Agent shall have received  evidence satisfactory to it and its counsel that the Vessel is (or will be upon the consummation of the Vessel Transfer):

(1)in the sole and absolute ownership of the Ultimate Borrower and duly registered in such Ultimate Borrower's name in the Republic of the Marshall Islands, free of all liens and encumbrances of record other than the Mortgage;

(2)insured in accordance with the provisions of the Mortgage and  all requirements of the Mortgage in respect of such insurance have been fulfilled (including, but not limited to, letters of undertaking from the insurance brokers,  including  confirmation notices of assignment, notices of cancellation and loss payable clauses acceptable to the Lenders);

(3)classed in the highest classification and rating for vessels of the same age and type with its Classification Society without any outstanding recommendations; and

(4)operationally seaworthy and in every way fit for its intended service.

(xvi)Security Documents. The Ultimate Borrower shall have executed and delivered to the f:'acility Agent:

(1)the Earnings and Charterparties Assignment;

(2)the Insurances Assignment;

(3)the Account Pledges relating to the Earnings Account and the Retention Account;

(4)the Assignment Notice and the acknowledgement thereof in respect of (i) through (iii) above (including the executed and countersigned notice and acknowledgment of assignment of earnings and time charter and subordination agreement from the Initial Charterer);

(5)the MI Continuation Mortgage; and

(6)an irrevocable power of attorney granted by the Borrower to the Security Trustee which, upon the occurrence of an Event of Default, enables the Security Trustee to make all necessary decisions in relation to the Vessel and obliges the master of the Vessel to adhere to the Security Trustee's  instructions.

(xvii)Registration   of   the   MI   Continuation   M01tgage.     The  Facility  Agent  shall  have received satisfactory evidence that the MI  Continuation  Mortgage  has  been  duly registered under the laws of the Republic of Marshall Islands and constitutes a first priority mortgage lien under such jurisdiction.

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(xviii)Continuation of Security Interest. The Facility Agent and the Security Trustee shall have received reasonable evidence that the Security Trustee's security  interest granted pursuant to the Security Agreements on the Closing Date shall be continued after the Vessel Transfer.

(xix)Reaffirmation. The Guarantor shall have executed and  delivered  to  the  Facility Agent a reaffirmation agreement in form and  substance reasonably  satisfactory to the Facility Agent.

12.3Assignment by Lender.

(a)Each Lender shall be entitled to assign its rights and obligations under this Agreement or grant participation(s) in the Facility to any subsidiary, holding company or other affiliate or office of such Lender, to any subsidiary, office or other affiliate company, special purpose entity or funding vehicle of any thereof or, with the consent of the Borrower (such consent not to be unreasonably withheld or delayed and to be deemed granted within ten (10) Business Days from the day it has been sought unless it has been expressly refused within that period, provided, however, that such consent from the Borrower is not required if an Event of Default has occurred and is continuing) and with the consent of the Facility Agent, to any other bank or financial institution (in a minimum amount of not less than $1,000,000), and such Lender shall forthwith give notice of any such assignment or participation to the Borrower and pay the other Lender an assignment fee of $3,000 for each such assignment or participation; provided, however, that any such assignment must be made pursuant to an Assignment and Assumption Agreement. The B01Tower will take all reasonable actions requested by the Agents or any Lender to effect such assignment. In addition, any Lender may disclose to any prospective assignee any information about the Security Parties and the Transaction Documents as the Lender shall consider appropriate if the person to whom the information is given agrees in writing to keep such information confidential.

(b)The Facility Agent, acting for this purpose- as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders and principal amount of the Facility owing to each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Facility Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(c)Upon its receipt  of a duly completed Assignment  and Assumption Agreement executed by an assigning Lender and an assignee, the assignment fee referred to above  and  any written consent to such assignment required, the Facility Agent shall accept such Assignment and Assumption Agreement and record the information contained therein in the Register; provided, that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to this Agreement, the Facility Agent shall have no obligation to accept such Assignment and  Assumption Agreement and record the information therein in the Register unless and until such payment  shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(d)In addition, any Lender may at  any time, without the consent of, or notice to, the Borrower or any Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower's Affiliates) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Advance owing to it); provided, that (i) such Lender's obligations under this Agreement shall  remain  unchanged,  (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and

(iii) the Borrower, the Guarantor, the Facility Agent and the other Lenders shall continue to deal solely and

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directly with such Lender in connection with  such Lender's  rights  and  obligations  under  this  Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement  or instrument  may provide  that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that requires the consent of each Lender directly affected thereby pursuant to the terms of this Agreement and that directly affects such Participant.

13.ILLEGALITY,  INCREASED COST, NON-AVAILABILITY,  ETC.

13.1Illegality. In the event that by reason of any change in any applicable law, regulation or regulatory requirement or in the interpretation thereof, a Lender has a reasonable basis to conclude that it has become unlawful for any Lender to maintain or give effect to its obligations as contemplated by this Agreement, such Lender shall inform the Facility Agent and the Borrower to  that effect,  whereafter  the liability of such Lender to make its Commitment available shall forthwith cease and the Borrower shall be required  either to repay to such Lender that portion of the Facility advanced by such Lender immediately or, if such Lender so agrees, to repay such portion of the Facility to the Lender on the last day of the calendar month in accordance with and subject to the provisions of Section 13.4. In any such event, but without prejudice to the aforesaid obligations of the Borrower to repay such portion of the Facility, the Borrower and the relevant Lender shall negotiate in good faith with a view to agreeing on terms for making such portion of the Facility available from another jurisdiction or otherwise restructuring such portion of the Facility on a basis which is not unlawful.

13.2Increased Costs. If any change in applicable law, regulation or regulatory requirement, or in the interpretation or application thereof by any governmental or other authority, shall:

(i)subject any Lender to any Taxes with respect to its income from the Facility, or any part thereof, or

(ii)change the basis of taxation to any Lender of payments of principal or interest or any other payment due or to become due pursuant to this Agreement (other than a change in the basis effected by the jurisdiction of organization of such Lender, the jurisdiction of the principal place of business of such Lender, the United States of America, the State or City of New York or any governmental subdivision or other taxing authority having jurisdiction over such Lender (unless such jurisdiction is asserted by reason of the activities of any Security Party) or such other jurisdiction where the Facility may be payable), or

(iii)impose, modify or deem applicable any reserve requirements or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, a Lender, or

(iv)impose on any Lender any other condition affecting the Facility or any part thereof, and the result  of the foregoing is either to increase the cost to such Lender of making

available or maintaining  its Commitment  or any part thereof or to reduce the amount of any payment

received by such Lender, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender under or in connection with this Agreement:

(1)such  Lender  shall  notify  the  Facility  Agent  and  the  Borrower  of  the happening of such event, and

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(2)the Borrower agrees forthwith upon demand to pay to such Lender  such amount as such Lender certifies to be necessary to compensate such Lender for such additional cost or such reduction; provided, however, that the foregoing provisions shall not be applicable in the event that increased costs to the Lender result from the exercise by the Lender of its right to assign its rights or obligations under Section 12.3.

For the avoidance of doubt, this Section 13.2 shall apply to all requests, rules, guidelines or directives concerning liquidity and capital adequacy issued by  any United  States regulatory  authority  (i) under or in connection with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) in connection with the implementation of the recommendations of the Bank for International Settlements or the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority), regardless of the date adopted, issued, promulgated or implemented.

13.3Lender's  Certificate  Conclusive.   A certificate or determination  notice of the Facility  Agent or any Lender, as the case may be, as to any of the  matters referred  to  in this  Section 13 shall,  absent manifest error, be conclusive and binding on the Borrower.

13.4Compensation for Losses. Where any portion of the Facility is to be repaid by the Borrower pursuant to Section 5 or this Section 13, the Borrower agrees simultaneously with such repayment to pay to the relevant Lender all accrued interest to the date of actual payment on the amount repaid and all other sums then payable by the Borrower to the relevant Lender pursuant to this Agreement, together with such amounts as may be certified by the relevant Lender to be necessary to compensate such Lender for any actual loss, premium or penalties incurred or to be incurred thereby on account of funds borrowed to make, fund or maintain its Commitment or such portion thereof for the remainder (if  any) of the then current  calendar month, but otherwise without penalty or premium.

14.CURRENCY  INDEMNITY

14.1Currency Conversion. If for the purpose of obtaining or enforcing a judgment in any court in any country it becomes necessary to convert into any other currency (the "judgment currency") an amount due in Dollars under this Agreement or the other Transaction Documents then the conversion shall be made, in the discretion of the Facility Agent, at the rate of exchange prevailing either on the date of default or on the day before the day on which the judgment is given or the order for enforcement is made, as the case may be (the "conversion date"), provided that the Facility Agent shall not be entitled to recover under this Section any amount in the judgment currency which exceeds at the conversion date the amount in Dollars, as applicable, due under this Agreement, the Note and/or the other Transaction Documents.

14.2Change in Exchange Rate. If there is a change in the rate of exchange prevailing between the conversion date and the date of actual payment of the amount due, the Borrower shall pay such additional amounts (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the judgment currency when converted at the rate of exchange prevailing on  the  date  of  payment  will produce the amount then due under this Agreement, the Note and/or the other Transaction Documents  in Dollars; any excess over the amount due received or collected by the Lenders shall be remitted  to  the Borrower.

14.3Additional Debt Due. Any amount due from the Borrower under this Section 14 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement, the Note and/or any of the other Transaction Documents.

14.4Rate of Exchange. The term "rate of exchange" in this Section 14 means the rate at which the Facility Agent in accordance with its normal practices is able on the relevant date to purchase Dollars with the judgment currency and includes any premium and costs of exchange payable in connection with such purchase.

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15.FEES AND EXPENSES

15.1Fees. The Borrower shall pay all fees in the Fee Letter.

15.2Expenses. The Borrower agrees, whether or not the transactions hereby contemplated are consummated, on demand to pay, or reimburse the Agents for their payment of, the reasonable expenses of the Agents and (after the occurrence and during the continuance of an Event of Default) the Lenders incident to said transactions (and in connection with any supplements, amendments, waivers or consents relating thereto or incurred in connection with the enforcement or defense of any of the Agents' and the Lenders' rights or remedies with respect thereto or in the preservation of the Agents' and the Lenders' priorities under the documentation executed and delivered in connection therewith) including, without limitation, all reasonable costs and expenses of preparation, negotiation, execution and administration of this Agreement and the documents referred to herein, the reasonable fees and disbursements of the Agents' counsel in connection therewith, as well as the reasonable fees and expenses of any independent appraisers, surveyors, engineers and other consultants retained by the Agents in connection with this transaction, all costs and expenses, if any, in connection with the enforcement of this Agreement and the other Transaction Documents (and the security granted pursuant thereto) and stamp and other similar taxes, if any, incident to the execution and delivery of the documents (including, without limitation, the other Transaction Documents) herein contemplated and to hold the Agents and the Lenders free and harmless in connection with any liability arising from the nonpayment of any such stamp or other similar taxes. Such taxes and, if any, interest and penalties related thereto as may become payable after the date hereof shall be paid immediately by the Borrower to the Agents or the Lenders, as the case may be, when liability therefore is no longer contested by such party or parties or reimbursed immediately by the Borrower to such party or parties after payment thereof (if the Agents or the Lenders, at their sole discretion, chooses to make such payment).

16.APPLICABLE LAW, WRISDICTION AND WAIYER

16.1Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

16.2Jurisdiction. Each of the Security Parties hereby irrevocably submits to the jurisdiction of the courts of the State of New York and of the United States District Court for the Southern District of New York in any action or proceeding brought against it by  any of the Lenders or the Agents under this Agreement or under any document delivered hereunder and hereby irrevocably agrees that valid service of summons or other legal process on it may be effected by serving a copy of the summons and other legal process in any such action or proceeding on the Security Parties by mailing or delivering the same by hand to the Security Parties at the address indicated for notices in Section 18.1. The service, as herein provided, of such summons or other legal process in any such action or proceeding shall be deemed personal service and accepted by the Security Parties as such, and shall be legal and binding upon the Security Parties for all the purposes of any such action or proceeding. Final judgment (a certified or exemplified copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness of the Security Parties to the Lenders or the Agent) against the Security Parties in any such legal action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment. The Security Parties will advise the Facility Agent promptly of any change of address for the purpose of service of process. Notwithstanding anything herein to the contrary, the Lenders may bring any legal action or proceeding in any other appropriate jurisdiction.

16.3WAIVER   OF   IMMUNITY.     TO  THE  EXTENT  THAT  ANY  OF  THE   SECURITY PARTIES HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH   ATTACHMENT  PRIOR  TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION  OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO  ITSELF OR ITS PROPERTY, EACH OF THE SECURITY PARTIES HEREBY IRREVOCABLY   WAIVES SUCH IMMUNITY IN

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RESPECT  OF  ITS  OBLIGATIONS  UNDER  THIS  AGREEMENT  OR  ANY  OTHER  TRANSACTION DOCUMENT.

16.4WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG EACH OF THE SECURITY PARTIES AND EACH OF THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY  ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY  HERETO  ON  ANY  MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER TRANSACTION  DOCUMENTS.

17.THE AGENTS

17.1Appointment of Facility Agent. Each of the Lenders irrevocably appoints and authorizes the Facility Agent to take such action as facility agent on its behalf and to exercise such powers under this Agreement, the Note and the other Transaction Documents as are delegated to the Facility Agent by the terms hereof and thereof. Neither the Facility Agent nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted to be taken by it or them under this Agreement, the Note or the other Transaction Documents or in connection therewith, except for its or their own  gross negligence  or willful misconduct.

17.2Appointment of Security Trustee. Each of the Lenders irrevocably appoints, designates and authorizes the Security Trustee to act as security trustee on its behalf with regard to (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or pursuant to this Agreement or any of the other Transaction Documents (including, without limitation, the benefit of all covenants, undertakings,  representations, warranties and obligations given, made or undertaken to any Lender in the Agreement or the other Transaction Documents), (ii) all moneys, property and other assets paid or transferred to or vested in any Lender or .any agent thereof or received or recovered by any Lender or any agent thereof pursuant  to, or in connection with, this Agreement or the other Transaction Documents whether from any Security Party or any other person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Lender or any agent thereof in respect of the same (or any part thereof). The Security Trustee hereby accepts such appointment but shall have no obligations under this Agreement, under the Note or under any of the other Transaction Documents except those expressly set forth herein and therein. Neither the Security Trustee nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted to be taken by it or them under this Agreement, the Note or the other Transaction  Documents  or  m connection therewith, except for its or their own gross negligence or willful misconduct.

17.3Distribution of Payments. Whenever any payment is received by the Facility Agent or the Security Trustee from the Borrower or the Guarantor for the account of the Lenders, or any of them, whether of principal or interest on the Note, commissions, fees under Section 15 or otherwise, it will thereafter cause to be distributed on the day of receipt if received before 10:00 a.m. New York time, or on the day after receipt if received thereafter, like funds relating to such payment ratably to the Lenders according to their respective Commitments, in each case to be applied according to the terms of this Agreement. Unless the Facility Agent or the Security Trustee, as the case may be, shall have received  notice  from the Borrower prior to the date when any payment is due hereunder that the Borrower will not make any payment on such date, the Facility Agent or the Security Trustee may assume that the Borrower have made such payment to the Facility Agent or the Security Trustee, as the case may be, on the relevant date and the Facility Agent or the Security Trustee may, in reliance upon such assumption, make available to the Lenders on such date a corresponding amount relating to such payment ratably to the Lenders according to their respective Commitments. If and to the extent that the Borrower shall not have so made such payment available to the Facility Agent or the Security Trustee, as the case may be, the Lenders and the Borrower (but without duplication)  severally  agree to  repay  to  the Facility  Agent  or  the  Security  Trustee,  as the  case  may  be,

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17.4Holder  of  Interest  in Note.   The Agents  may treat  each Lender  as the holder  of all of  the interest of such Lender in the Note.

17.5No Duty to Examine, Etc. The Agents shall not be under a duty to examine or pass upon the validity, effectiveness or genuineness of any of this Agreement, the other Transaction Documents or any instrument, document or communication furnished pursuant to this Agreement or in com1ection therewith or in connection with any other Transaction Document, and the Agents shall be entitled to assume that the same are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be.

17.6Agents as Lenders. With respect to that portion of the Facility made available by it, each Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not an Agent, and the term "Lender" or "Lenders" shall include any Agent in its capacity as a Lender. Each Agent and its affiliates may accept deposits from, lend money to and generally engage in any kind of business with, the Borrower and the Guarantor as if it were not an Agent.

17.7Acts of the Agents.  Each Agent shall have duties and discretion, and shall act as follows:

(a)Obligations of the Agents. The obligations of each Agent under this Agreement, the Note and the other Transaction Documents are only those expressly set forth herein and therein;

(b)No Duty to Investigate. No Agent shall at any time, unless requested to do so by a Lender or Lenders, be under any duty to enquire whether an Event of Default,  or an event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, has occurred or to investigate the performance of this Agreement, the Note or any Security Document by any Security Party; and

(c)Discretion   of  the  Agents.    Each  Agent  shall be  entitled  to use  its  discretion  with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Agreement and the other Transaction Documents, unless the Facility Agent shall have been instructed by the Majority Lenders to exercise such rights or to take or refrain from taking such action; provided, however, that no Agent shall be required to take any action which exposes it to personal liability or which is contrary to this Agreement or applicable law;

(d)Instructions  of Ma jority  Lenders.  Each Agent shall in all cases be fully protected in acting  or refraining  from  acting under  this  Agreement  or under  any  other  Transaction  Document   in accordance with the instructions of the Majority Lenders, and any action taken or failure to act pursuant  to such instructions shall be binding on all of the Lenders.

17.8Certain Amendments. Neither this Agreement, the Note nor any of the Security Documents nor any terms hereof or thereof may be amended unless such amendment is approved by the Borrower and the Majority Lenders, provided that no such amendment shall, without the consent of each Lender affected thereby, (i) reduce the interest rate or extend the time of payment of scheduled principal payments or interest or fees on the Facility, or reduce the principal amount of the Facility or any fees hereunder, (ii) increase or decrease the Commitment of any Lender or subject any Lender to any additional obligation (it being understood that a waiver of any Event of Default or any mandatory repayment of the Facility shall not constitute a change in the terms of any Commitment  of any Lender), (iii) amend, modify or waive any provision of this Section 17.8, (iv) amend the definition of Majority Lenders or any other definition referred

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to in this Section 17.8, (v) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement, (vi) release any Security Party from any of its  obligations  under  any Security Document except as expressly provided herein or in such Security Document, or (vii) amend any provision relating to the maintenance of collateral under Section 9.4. All amendments  approved  by  the Majority Lenders under this Section 17.8 must be in writing and signed by the Borrower and each of the Lenders. In the event that any Lender is unable to or refuses to sign an amendment approved by the Majority Lenders hereunder, such Lender hereby appoints the Facility Agent as its Attorney-in-Fact  for the purposes of signing such amendment. No provision of this Section 17 or any other provisions relating to the Facility Agent may be modified without the consent of the Facility Agent.

17.9Assumption  regarding  Event of Default.   Except as otherwise provided  in Section 17.15, the Facility Agent and the Security Trustee shall be entitled to assume that no Event of Default, or event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, has occurred and is continuing, unless it has been notified by any Security Party of such fact, or has been notified by a Lender that such Lender considers that an Event of Default or such an event (specifying in detail the nature thereof) has occurred and is continuing.  In the event that either thereof shall have been notified by any Security Party or any Lender in the manner set forth in the preceding sentence of any Event of Default or of an event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, the Facility Agent shall notify the Lenders and shall take action and assert such rights under this Agreement, under the Note and under Security Documents as the Majority Lenders shall request in writing.

17.10Limitations  of  Liability.   No  Agent  or Lender  shall be under  any liability or responsibility whatsoever:

(1)to any Security Party or any other person or entity as a consequence of any failure or delay in performance by, or any breach by, any other Lenders or any other person of any of its or their obligations under this Agreement or under any Security Document;·

(2)to any Lender or Lenders as a consequence of any failure or delay in performance by, or any breach by, any Security Party of any of its respective obligations under this Agreement or under the other Transaction Documents; or

(3)to any Lender or Lenders for any statements, representations or warranties contained in this Agreement, in any Security Document or in any document or instrument delivered in connection with the transaction hereby contemplated; or for the validity, effectiveness, enforceability or sufficiency of this Agreement, any other Transaction Document or any document or instrument delivered in connection with the transactions hereby contemplated.

17.11Indemnification of the Facility Agent and  Security Trustee.  The Lenders agree to indemnify each Agent (to the extent not reimbursed by the Security Parties or any thereof), pro rata  according to the respective  amounts of their Commitments, from and against any and all liabilities,  obligations, losses, damages, penalties, actions, judgments,  suits, costs,  expenses  or disbursements  of  any kind or nature whatsoever (including legal fees and expenses incurred in investigating claims and  defending itself against such liabilities) which may be imposed on, incurred by or asserted against, such Agent in any way relating to or arising out of this Agreement or any other Transaction Document, any  action taken or omitted by such Agent thereunder or the preparation, administration, amendment or  enforcement of,  or waiver  of  any provision of, this Agreement or any other Transaction Document,  except that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages,  penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of either such Agent.

17.12Consultation with Counsel. Each of the Facility Agent and the Security Trustee may consult with legal counsel selected by such Agent and shall not be liable for any action taken, permitted or omitted by it in good faith in accordance with the advice or opinion of such counsel.

17.13Resignation. Any Agent may resign at any time by giving sixty (60) days' written notice thereof to the other Agents, the Lenders and the Borrower. Upon any such resignation, the Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Lenders and shall have accepted such appointment within sixty (60) days after the retiring Agent's giving notice of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a bank or trust company of recognized standing. The appointment of any successor Agent shall be subject to the prior written consent of the Borrower, such consent not to be unreasonably withheld. After any retiring Agent's resignation as Agent hereunder, the provisions of this Section 17 shall continue in effect for its benefit with respect to any actions taken or omitted by it while acting as an Agent.

17.14Representations of Lenders. Each Lender represents and warrants to each other Lender and the Agents that:

(1)in making its decision to enter into this Agreement and to make its Commitment available hereunder, it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Security Parties, that it has made · an independent credit judgment and that it has not relied upon any statement, representation  or warranty by any other Lender or any Agent; and

(2)so long as any portion of its Commitment remains outstanding, it will continue to make its own independent evaluation of the financial condition and affairs of the Security Parties.

17.15Notification of Event of Default. The Facility Agent hereby undertakes  to promptly  notify the Lenders, and the Lenders hereby promptly undertake to notify the Facility Agent and the other Lenders, of the existence of any Event of Default which shall have occurred and be continuing of which such party has actual knowledge.

17.16Reversal of Redistribution. Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Security Documents, or otherwise), which is applicable to the payment  of the principal of, or interest on, the Facility, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such obligation then owed and due to such Lender bears to the total of such obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the  other Lenders an interest in the obligations of the respective Security Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

17.17Parallel Debt.

(a)The Borrower hereby irrevocably and unconditionally  undertakes,  as  far  as necessary in advance, to pay to the Security Trustee, as creditor in its own right and not as representative of any of the other Creditor, an amount equal to the aggregate of all its Principal Obligations to all the Creditor Parties from time to time due in accordance with the terms and conditions of such Principal  Obligations (such payment undertaking

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and the obligations and liabilities which are the result  thereof,  its  "Parallel Debt").  Each of the parties hereto hereby acknowledges that (i) the Parallel Debt of the Borrower constitutes unde1takings, obligations and liabilities of the Borrower to the Security Trustee which are separate and independent from, and without prejudice to, the Principal Obligations which the Borrower has to any other Creditor and (ii) that the Parallel Debt represents the Security Trustee's own claim to receive payment of such Parallel Debt by the Borrower, provided that the total amount which may become due under the Parallel Debt of the Borrower under this Section 17.17 shall never exceed the total amount which may become due under all the Principal Obligations of the Borrower to all the Creditor Parties.

(i)The total amount due by the Borrower as the Parallel Debt under Section 17.17(a) shall be decreased to the extent that the Borrower shall have paid any amounts to the Creditor Parties or any of them to reduce the Borrower's outstanding Principal Obligations or any Creditor otherwise receive any amount of such Principal Obligations (other than by virtue of Section l 7.17(b)(ii)); and

(ii)To the extent that the Borrower shall have paid any amounts to the Security Trustee under the Parallel Debt or the Security Trustee shall have otherwise received monies in payment of such Parallel Debt, the total amount due under the Principal Obligations shall be decreased by the same amount.

(b)In the event the Security Trustee should resign, the Security Trustee shall assign the Parallel Debt owed to it to its successor security trustee together with all of its other rights and obligations under this Section 17.17 and shall take all such further actions as the Facility Agent in its sole discretion may deem necessary or desirable in order to assign and transfer to the successor security trustee the Parallel Debt and the other rights and obligations under this Section 17.17.

18.NOTICES  AND DEMANDS

18.1Notices. All notices, requests, demands and other communications to any party hereunder, shall be in writing (including prepaid overnight courier, facsimile transmission, electronic transmission or similar writing) and  shall be given to the Borrower or the Guarantor at the address, facsimile number or email address set forth below and to the Lenders and the Agents at their address, facsimile number or email address set forth in Schedule I or at such other address, facsimile number or email address as such party may hereafter specify for the purpose by notice to each other party hereto. Each such notice, request or other communication shall be effective (i) if given by facsimile, on the date of dispatch thereof (provided further that if the date of dispatch is not a Banking Day in the locality of the party to whom such notice or demand is sent, it shall be deemed to have been received on the next following Banking Day in such locality), (ii) if by email or other electronic communication, upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgment) or (iii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in this Section or when delivery at such address is refused.

If to the Borrower or the Guarantor: 11 North Water Street, Suite 18290

Mobile, Alabama 36602

Facsimile No.:   (251) 243-9121 Attention:  Chief Financial Officer

With a copy to

One Whitehall Street New York, NY 10004

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Facsimile No.: (212) 514-5692 Attention: Mr. Niels M. Johnsen

If to the Facility Agent or the Security Trustee: DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom Attention:   Peter Attridge

Department: Transaction  and Loan Services Email:  tls.london@dvbbank.com

Fax: +44 207 256 4352

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA Facsimile: + 212 858 2664 Attention:   Christoph Clauss

Email:  christoph.clauss@dvbbank.com

19.MISCELLANEOUS

19.1Right of Set-off.  Upon the occurrence and during the continuance of any Event of Default, each Agent and each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply  any and all deposits (general or special, time or demand, provisional or final) at any time held (including, but not limited to, the Earnings Accounts) and other indebtedness at any time owing by the Facility Agent, such Lender or such Affiliate to or for the credit or the account of the Borrower or any other Security Party against any and all of the Obligations of the Borrower or other Security Party now or hereafter existing under the Transaction Documents, irrespective of whether the Facility Agent or such Lender  shall have made any demand under this Agreement and although such Obligations may  be unmatured.  The Facility Agent  and  each Lender agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give  such notice shall not affect the validity of such set-off and application. The rights of the Facility Agent and each Lender and their respective Affiliates under this Section 19.1 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Facility Agent, such Lender and their respective Affiliates may have. Notwithstanding anything to the contrary  set  forth  in Section 17 or elsewhere herein, the Facility Agent may not discriminate against the Lenders  generally  in favor of its own interests when exercising setoff rights against amounts received from any Security Party hereunder, including any amount in any Earnings Account or Retention Account.

19.2Time of Essence. Time is of the essence of this Agreement but no failure or delay on the part of any Creditor to exercise any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by any Creditor of any power or right hereunder preclude any other or further exercise thereof or the exercise of any other power or right. The remedies provided herein are cumulative and are not exclusive of any remedies provided by law.

19.3Unenforceable, etc., Provisions - Effect. In case any one or more of the provisions contained in this Agreement or in the other Transaction Documents would, if given effect, be invalid, illegal or unenforceable in any respect under any law applicable in any relevant jurisdiction,  said provision shall not be

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enforceable against the relevant Security Party, but the validity, legality and enforceability of the remaining provisions herein or therein contained shall not in any way be affected or impaired thereby.

19.4References. References herein to Articles, Sections, Exhibits and Schedules are to be construed as references to articles, sections of, exhibits to, and schedules to, this Agreement or the other Transaction Documents as applicable, unless the context otherwise requires.

19.5Further Assurances. Each of the Security Parties hereby agrees that if this Agreement or any of the other Transaction Documents shall, in the reasonable opinion of the Lenders, at any time be deemed by the Lenders for any reason insufficient in whole or in part to carry out the true intent and spirit hereof or thereof, it will execute or cause to be executed such other and further assurances and documents as in the opinion of the Lenders may be required in order to more effectively accomplish the purposes of  this Agreement  and/or the other Transaction Documents.

19.6Prior Agreements, Merger. Any and all prior understandings and agreements  heretofore entered into between the Security Parties on the one part, and the Creditors, on the other part, relating to the transactions contemplated hereby, whether written or oral, are superseded by and merged  into  this Agreement and the other agreements (the forms of which are exhibited hereto) to be executed and delivered in connection herewith to which the Security Parties, the Agent, the Security Trustee and/or the Lenders are parties, which alone fully and completely express the agreements between the Security Parties, the Agents, and the Lenders.

19.7Entire  Agreement;   Amendments.    This  Agreement  constitutes  the  entire  agreement  of  the parties  hereto  including  all patties  added  hereto  pursuant  to  an Assignment  and Assumption  Agreement. Subject  to  Section  17.8,  any  provision  of  this  Agreement  or  any  other  Transaction  Document  may  be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower, the Agents, and the Majority Lenders. This Agreement may be executed in any number of counterparts, each of which  shall be  deemed  an  original,  but  all  such  counterparts  together  shall  constitute  one  and  the  same instrument.

19.8Indemnification. Neither any Creditor nor any of its directors, officers, agents or employees shall be liable to any of the Security Parties for any action taken or not taken thereby in connection herewith in the absence of its own gross negligence or willful misconduct. Each of the Borrower and the Guarantor hereby jointly and severally  agree to indemnify the Creditors, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities (including without limitation all such liabilities arising out of(x) Environmental Claims, (y) business conducted by any of the Security Parties in a Sanctioned Country or with a Blocked Person in violation of Sanctions, at all times subject to applicable  law  and the  Security Parties' continued cooperation with OFAC or any other governmental entity, to the extent necessary and (z) any electronic communication purporting to have originated from any of the Security Parties to any Lender without proper authorization), losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement, any actual or proposed use of proceeds  of the Facility hereunder, or any related transaction or claim; provided  that (i) no Indemnitee shall have the right to be indemnified  hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by final judgment by a court of competent jurisdiction and (ii) to the extent permitted by law, the Indemnitee shall provide the Security Parties with prompt notice of any such investigative, administrative or judicial proceeding after the Indemnitee becomes aware of such proceeding; provided, however, that the Indemnitee's failure to provide such notice in a timely manner shall not relieve the Security Parties of their obligations hereunder. Each of the Borrower and the Guarantor agrees to, and shall, indemnify and hold each of the Creditors harmless against any loss, as well as against any reasonable costs  or  expenses  (including  reasonable  legal  fees  and  expenses),  which  any of the  Creditors  sustains  or

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incurs as a consequence of any default in payment of the principal amount of the Facility, interest accrued thereon or any other amount payable hereunder, under the Note or under the other Transaction Documents including, but not limited to, all actual losses incurred in liquidating or re-employing fixed deposits made by third parties or funds acquired to effect or maintain the Facility or any portion thereof. Any Creditor's certification of such costs and expenses  shall, absent any manifest error, be conclusive  and binding on the Borrower.

19.9USA PATRIOT  Act  Notice;  OFAC  and  Bank  Secrecy  Act.  The Facility Agent  hereby notifies each of the Security Parties that pursuant to the requirements of the USA PATRIOT Act  (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the "PATRIOT Act"), and the policies and practices of the Facility Agent, each of the Creditors is required to obtain, verify and record certain  information and documentation that identifies each of the Security Parties, which information includes the name and address of each of the Security Parties and such other information that will allow the Creditors to identify each of the Security Parties in accordance with the Patriot Act. In addition, each of the Security Parties shall: (a) ensure that no Person who owns a controlling interest in or otherwise controls any of the  Security Parties or any subsidiary of any thereof is or shall be listed on the Specially Designated Nationals  and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control  ("OFAC"), the Department of the Treasury or included in any Executive Orders; (b) not use or permit the use of the proceeds of the Facility to violate any of the foreign asset control regulations of OFAC or any  enabling statute or Executive Order relating thereto;  and (c) comply, and cause any of its subsidiaries  to comply, with all applicable Bank Secrecy Act laws and regulations, as amended.

19.10Remedies Cumulative and Not Exclusive; No Waiver. Each and every right, power and remedy herein given to the Facility Agent shall be cumulative and shall be in addition to every other right, power and remedy of the Facility Agent now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Facility Agent, a11d the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No failure, delay or omission by the Facility Agent or any of the Creditors in the exercise of any right or power or in the pursuance of any remedy accruing upon any breach or default by the Borrower or any Security Party shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Facility Agent or any of the Creditors of any security or of any payment of or on account of any of the amounts due from the Borrower or any Security Party to the Facility Agent and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right with respect to any future breach or default or of any past breach or default not completely cured thereby. In addition to the rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any of the Security Parties' obligations, the Facility Agent shall have rights and remedies of a secured party under the Uniform Commercial Code.

19.11Counterparts;  Electronic  Delivery.   This Agreement  may be executed  in any number  of counterparts, each of which shall be deemed an original, but all such counterparts together shall  constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by  facsimile or electronic transmission shall be deemed as effective as delivery of an originally executed counterpart. In the event that any of the Security Parties deliver an executed counterpart of this  Agreement by facsimile or electronic transmission, such Security Parties shall also deliver an originally executed counterpart as soon as practicable, but the failure of such Security Parties to deliver an  originally executed counterpart of this Agreement shall not affect the validity or effectiveness of this Agreement.

19.12Headings. In this Agreement, Section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation of this Agreement.

19.13Disclosure. Each of the Security Parties irrevocably  authorizes  the  Creditors  to  give, divulge and reveal from time to time information and details relating to  its  Accounts,  any Vessel,  the Facility, this Agreement, the Note, the Security Documents,  the Commitments, any agreement  entered into by any of the

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Security Parties in connection with this Agreement, the Note or the Security Documents and any other information provided by any of the Security Parties to any of the Creditors in connection with this Agreement, the Note or the  Security Documents (unless such information and details have been expressly communicated to the Creditors to be material non-public information (except in the case where such disclosure is compelled by applicable law)) to (i) any regulatory or self-regulatory authorities (including any stock exchanges) or public or internationally recognized authorities, (ii) the head offices, branches, affiliates and professional advisers of any of the Creditors, (iii) any other parties to this Agreement, the Note or the Security Documents and any parties to any agreement entered into by any of the Security Parties  in connection therewith, (iv) any rating agencies and their professional advisers, (v) any Person with whom any of the Security Parties propose to enter (or contemplate entering) into contractual relations in relation to the Facility or the Commitments; and (vi) any other Person (including any transferee or potential transferee of the Facility) in connection with the funding, refinancing, transfer, assignment, sale, sub-participation or operational arrangement or other transaction in relation thereto, including, but not limited to,  any enforcement, preservation, assignment, transfer, sale or sub-participation of any of the rights and/or obligations of any of the Creditors.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS whereof the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the day and year first above written.

WATERMAN  STEAMSHIP  CORPORATION,

as

By:/s/ M. Estrada

Name: M. Estrada

          Title:CFO

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By:   /s/ M. Estrada

        Name: M. Estrada

Title: CFO

DVB BANK SE

as Mandated Lead Arranger, Facility Agent, Security Trustee and Lender

By:_ Name:

Title:

By:_ Name:

Title:

[Signature Page -Credit Agreement]

IN WITNESS whereof the parties hereto have caused this Agreement to be duly executed by

their duly authorized representatives as of the day and year first above written.

WATERMAN STEAMSHIP CORPORATION,

as Borrower

By:_  

Name:

Title:

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By: Name:

Title:

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DVB BANK SE

as Mandated Lead Arranger, Facility Agent, Security Trustee and Lender

By:/s/ Kartal Cona

Name: Kartal Cona

Title: Vice President

By:/s/ Elk Schuppan

Name: Elk Schuppan

Title: Senior Vice President

[Signature Page to Credit Agreement]

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SCHEDULE I

LENDERSCOMMITMENT

DVB Bank SE Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom Attention: Peter Attridge

Department: Transaction and Loan Services Email:  tls.london@dvbbank.com

Fax: +44 207 256 4352

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$38,500,000

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA Facsimile: + 212 858 2664 Attention: Christoph Clauss

Email:  christoph.clauss@dvbbank.com

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SCHEDULE II

APPROVED SHIP BROKERS

R.S. Platou Shipbrokers a.s. Haakon VII's gate 10

Oslo, Norway

Telephone No.: +47 23 11 20 00

Facsimile No.: +47 23 11 23 11

Fearnleys A/S

Grev Wedels plass 9 Oslo, Norway

Telephone No.: +47 22 93 60 00

Facsimile No.: +47 22 93 61 50

H. Clarkson & Company 12 Camomile Street London EC3A 7BP England

Telephone No.: +44 207 334 0000

Facsimile No.: +44 207 283 5260

Braemar Shipbrokers Ltd. 35 Cosway Street

London NWl 5BT England

Telephone No.: +44 207 535 2600

Facsimile No.: +44 207 535 2601

Jacq. Pierot Jr. & Sons, Inc. (USA) 29 Broadway

New York, NY 10006 Telephone No.: (212) 344 3840

Facsimile No.: (212) 943 6598

Barry Rogliano Salles (BRS) 11, boulevard Jean Mermoz 92200  Neuilly-sur-Seine France

Telephone No. : +33 (0)1 41 92 12 34

Hesnes Shipping AS PO Box 104 Borgheim 3163 Notteroy

Norway

SCHEDULE III

Security Party Liens as of the Closing Date

International   Shipholding Corporation

Assignment in favor of JPMorgan Chase Bank of a Deposit Account holding $6,000,000 to secure the TECO Letter of Credit  required under the contract between U.S. United Ocean Services, LLC and TECO.

Multiple Indebtedness Mortgage, Assignment of Leases and Rents and Security Agreement in favor of Regions Bank on real estate located at 864-70 South Peters Street, New Orleans, LA.

International  Shipholding Corporation and Waterman  Steamship Corporation

Security Agreement covering various collateral in favor of Regions Bank in connection with the Credit Agreement providing revolving and term loan facilities up to a maximum amount of

$145,000,000

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SCHEDULE IV

Security Party Indebtedness as of the Closing Date

International Shipholding Corporation

Guarantee of indebtedness of East Gulf Shipholding, Inc. in the amount of Japanese Yen 3,140,556,031.00 to DNB Bank ASA, which indebtedness has a maturity date of September 15, 2020.

Guarantee of indebtedness of East Gulf Shipholding, Inc. in the amount of $42,319,999.86 to ING Bank N.V., which indebtedness has a maturity date of January 24, 2018.

Guarantee of indebtedness of Dry Bulk Australia Ltd. and Dry Bulk Americas Ltd. in the amount of $28,194,523.78 to ING Bank N.V., which indebtedness has a maturity date of June 20, 2018.

Guarantee of indebtedness of LCI Shipholdings, Inc. in the amount of $23,040,000.00 to RBS Asset Finance, Inc, which indebtedness has a maturity date of August 29, 2021.

Guarantee of indebtedness of LCI Shipholdings, Inc. in the amount of $10,076,785.80 to Capital One N.A. which indebtedness has a maturity date of January 1, 2017.

Guarantee of indebtedness of Oslo Bulk 6 Pte Ltd in the amount of $1,000,000.00 to Pareto Bank ASA which has a maturity date of January 2023 dependent upon vessel delivery date.

Indebtedness to Regions Bank of up to $10,000,000 secured by real estate located at 864-70 South Peters Street, New Orleans, LA.

International Shipholding Corporation and Waterman Steamship Corporation

Secured Indebtedness of up to $145,000,000 under a Credit Agreement dated September 23, 2013, between International Shipholding Corporation, Enterprise Ship Company, Inc, Sulphur Carriers, Inc, CG Railway, Inc, Central Gulf Lines, Inc, Coastal Carriers, Inc, Waterman Steamship Corporation, Inc, N.W. Johnsen & Co., Inc, LMS Shipmanagement, Inc, U.S. united Ocean Services, LLC, Mary Ann Hudson, LLC, Sheila McDevitt, LLC, Tower, LLC, and Frascati Shops, Inc, as borrowers, and Regions Bank, among others, as Administrative Agent and Collateral Agent.

SCHEDULE V

Initial Charter Party Agreement

Vessel	Charterer	Start Date	End Date	Charter Rate (US Flag)	Charter Rate (International Flag)
GREEN BAY	Nippon Yusen Kaisha	June 24, 2010	July 9, 2016	$19, 250 per day	$17,500 per day

EXHIBIT A

PROMISSORY  NOTE

New York, New York$38,500,000

2014

________________________

FOR VALUE  RECEIVED,  the undersigned,  WATERMAN  STEAMSHIP  CORPORATION,  a

corporation incorporated and existing under the laws of the State of New York, as borrower (the "Borrower"), hereby promises to pay to the order of DVB BANK SE, a banking corporation organized under the laws of Germany ("DVB"), as facility agent (the "Facility Agent") for the Lenders (as defined herein) with offices at Platz der Republik 6, D-60325 Frankfmi am Main, Germany, or as it may otherwise direct, the principal sum of Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) or such lesser amount as may be owing under the Credit Agreement (as defined below). The Borrower, shall repay the indebtedness represented by this Promissory Note (this "Note") as provided in Section 5 of that certain credit agreement dated as of August _, 2014, (the "Credit Agreement") made by and among (i) the Borrower, (ii) International Shipholding Corporation, as guarantor, (iii) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Credit Agreement (the "Lenders")), (iv) DVB, as facility agent for the Lenders, and security trustee for the Lenders and

(v) DVB, as mandated lead an-anger. This Promissory Note (this "Note") may be prepaid on such terms as provided in the Credit  Agreement. Interest shall be paid on the indebtedness represented by this Note at the rate (the "Applicable Rate") determined from time to time in accordance with Section 6 of the Credit Agreement and at the times provided in Section 6 of the Credit Agreement, which provisions are incorporated herein with full force and effect as if they were more fully set forth herein at length.

Any principal payment not paid when due, whether on the maturity date thereof or by acceleration, shall bear interest thereafter at a rate per annum equal to the Default  Rate  (as defined in the Credit Agreement). All interest shall accrue  and  be  calculated  on  the  actual number of days elapsed and on the basis of a 360 day year.

Words and expressions used herein and defined in the Credit Agreement shall have the same meaning herein as therein defined.

Both principal and interest are payable in Dollars to the Facility Agent, for the account of the Lenders, as the Facility Agent may direct, in immediately available same day funds.

The Facility Agent may endorse the amount and the date of the making of an Advance and any prepayment or payment of principal hereunder on the grid annexed hereto and made a part hereof, which endorsement shall constitute prima facie evidence of the accuracy of the information so endorsed; provided, however, that any  failure  to  endorse  such information  on such grid shall not in any manner affect the obligation of the Borrower, to make payment of principal and interest in accordance with the terms of the Credit Agreement and this Note.

If this Note or any payment required hereunder becomes due and payable on a day which is not a Banking Day the due date thereof shall be extended until the next following Banking Day (in which event, interest shall be payable during such extension at the rate applicable immediately prior thereto), unless such next following Banking Day falls in the following month, in which case such payment shall be payable immediately preceding the Banking Day.

This Note is the Note referenced to in, and is entitled to the security and benefits of, the Credit Agreement and the Security Documents. Upon the occurrence of any Event of Default under the Credit Agreement, the principal hereof and accrued interest hereon may be declared to be, and shall thereupon become, forthwith, due and payable.

Presentment, demand, protest and notice of dishonor of this Note or any other notice of any kind are hereby expressly waived.

THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE FACILITY AGENT HEREBY \VAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER \VHATSOEVER ARISING OUT OF OR IN ANY \VAY CONNECTED \VITH THIS NOTE.

This Note shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to principles of conflicts of law.

IN WITNESS WHEREOF, the Borrower has executed and delivered this Note  on the date and year first above written.

[Signature page follows ]

WATERMAN STEAMSHIP  CORPORATION,

as borrower

By:________________________________

Name:

Title:

PAYMENTS  OF PRINCIPAL

DateAmount of Advance

Amount of Principal Paid or Prepaid

Unpaid Principal Balance

Notation Made

By

EXHIBIT B

Drawdown Notice

DVB BANK SE

Park House

16-18 Finsbury Circus

London EC2M 7EB

E-mail:  tls.london@dvbbank.com

Fax: +44 207 256 4352

Attention: Peter Attridge

Department: Transaction and Loan Services

-- 2014

Ladies and Gentlemen:

Please be advised that, in accordance with Section 3 of the credit agreement among (1) yourselves, as mandated  lead arranger, facility agent, and security trustee, (2) Waterman Steamship Corporation, as borrower (the "Borrower"), (3) the banks  and financial institutions listed on Schedule I of the Credit Agreement (as hereinafter defined), as lenders, and (4) International Shipholding Corporation, as guarantor, dated as of_, 2014 (the "Credit Agreement"), the undersigned hereby request that   the   Advance   (as   defined   in   the   Credit   Agreement)   in   the   aggregate   principal   amount   of _____________Dollars ($______________be advanced to the Borrower as follows: Drawdown Date:

Amount to be drawn down:

Disbursement  Instructions:

The undersigned hereby represents and warrants that (a) the representations and warranties stated in Section 2 of the Credit Agreement (updated mutatis mutandis) are true and correct on the date hereof and will be true and correct on the Drawdown Date specified above as if made on such date, (b) no Event of Default has occurred and is continuing or will have occurred and be continuing on the Drawdown Date, and no event has occurred or is continuing which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, and (c) no Default or Event of Default will result from the making of the Advance (as defined in the Credit Agreement).

The undersigned hereby covenants and undertakes that, in the event that on the date specified for making available the Advance as stated above, the Lenders (as defined in the Credit Agreement) shall not be obliged under the Credit Agreement to make such Advance available, the undersigned shall indemnify and hold the Lenders fully harmless against any losses which the Lenders may sustain as a result of borrowing or agreeing to borrow funds to meet the drawdown requirements as stated above, and the certificate of the relevant Lender or Lenders shall (save and except for manifest error) be conclusive and binding on the undersigned as to the extent of any such loss.

This Drawdown Notice is effective upon receipt by you and shall be irrevocable.

Very truly yours,

WATERMAN STEAMSHIP CORPORATION,

as borrower

By:

Name:

Title:

FORM OF COMPLIANCE  CERTIFICATE

CERTIFICATE OF THE CHIEF FINANCIAL OFFICER OF

INTERNATIONAL  SHIPHOLDING  CORPORATION FOR THE PERIOD ENDED _________________

EXHIBIT C

The undersigned, being the chief financial officer of INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("ISH"), hereby certifies, on behalf of ISH and the Borrower (as defined below), to DVB BANK SE ("DVB"), as facility agent for the Lenders, in connection with that certain credit agreement, dated as of July _, 2014 (the "Credit Agreement"),  by and among,

(1)Waterman Steamship Corporation, as b01Tower (together with any successor thereto, the "Borrower"), (2) ISH, as guarantor, (3) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any bank or financial institution  which becomes a Lender pursuant to Section 12 of the Credit Agreement (the "Lenders")), (4) DVB, as facility agent for the Lenders, and security trustee for the Lenders and (5) DVB, as mandated lead arranger, that:

(i)I  have  reviewed  (i)  the  consolidated  financial  statements  of  ISH  and  its Subsidiaries  dated  as  ofand  for  theperiod then ended and (ii) the separate financial report of the Borrower dated as of and  for  theperiod  then  ended,  and  suchstatements and  repo1is fairly present the financial condition of ISH and its Subsidiaries and the Borrower, as the case may be, as of the dates indicated and the results of their operations and cash flows for the periods indicated; and

(ii)I have reviewed the terms of the Credit Agreement, the Note  and the other Transaction Documents and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and  the condition of ISH during the accounting period covered by the financial statements referred to in clause (i) above; and

(iii)such review has not disclosed the existence during or at the end of such accounting period of any condition or event that constitutes an Event  of Default nor any event which with the giving of notice or lapse of time or both would constitute an Event of Default, nor do I have knowledge of the existence of any such condition or event as at the date of this Certificate [EXCEPT, [IF SUCH CONDITION OR EVENT EXISTED OR EXISTS, DESCRIBE THE NATURE AND PERIOD OF EXISTENCE THEREOF AND WHAT ACTION ISH, THE BORROWER OR ANY OTHER ISH

ENTITY, AS THE CASE MAY BE, HAS TAKEN, IS TAKING AND PROPOSES TO TAKE WITH RESPECT THERETO]];

(iv)ISH and the Borrower are in compliance with all of the covenants contained in the Credit Agreement and in each other Transaction Document to which each is a party. The financial covenant analyses and calculations for the periods identified therein of the financial covenants set fo1ih in Section 9.3 of the Credit Agreement are set forth on Annex A attached hereto. In the event of any conflict between the formulas used for such analyses and calculations provided in the attached Annex A and the formulas provided in the Credit Agreement, the Credit Agreement shall govern;

(v)set forth on Annex B is a summary of all changes in GAAP and in the consistent application thereof, unless such change  and  the  effects  thereof have been described in a previous Compliance Certificate, the effect on the financial covenants resulting therefrom, and a reconciliation between calculation of the financial covenants before and after giving effect to such changes; and

(vi)set forth on Annex  C is an accounting of all of the contingent liabilities of each Security Party as required by Section 9.1(e) of the Credit Agreement.

Capitalized  terms  used  herein  without   definition  have  the  meaning  ascribed thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of this

________day of,  201_.

INTERNATIONAL  SHIPHOLDING  CORPORATION

By:_______________________

Name:

Title:

ANNEX A

Financial  Covenant Analyses

ANNEX B

GAAP Changes

ANNEX C

Contingent Liabilities

EXHIBIT D

ASSIGNMENT AND ASSUMPTION  AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of, 201_ among [NAME OF ASSIGNOR], a [bank]/[corporation] organized under the laws of [JURISDICTION OF ASSIGNOR] (the "Assignor"), as assignor, and [NAME OF ASSIGNEE], a [bank]/[corporation] organized under the laws of [JURISDICTION OF ASSIGNEE] (the "Assignee"), as assignee, supplemental to:

(i)that  certain  credit  agreement,  dated  as  of_____________, 2014 (the "Credit Agreement"), made among (1) Waterman Steamship Corporation, as borrower (the "Borrower"), (2) International Shipholding Corporation, as guarantor, (3) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Credit Agreement, the "Lenders"), (4) DVB BANK SE ("DVB"), as facility agent for the Lenders (in such capacity, the "Facility Agent") and security trustee for the Lenders and (5) DVB, as mandated lead arranger, pursuant to which the Lenders have agreed to provide to the Borrower, a secured term loan in the amount of up to Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) (the "Loan");

(ii)the promissory  note from the Borrower  in favor of the Facility Agent dated

_______, 2014 (the "Note") evidencing the Loan;

(iii)the Security Documents (as such term is defined in the Credit Agreement).

Except as otherwise defined herein, terms defined in the Credit Agreement shall have the same meaning when used herein.

In consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby  agree  as follows:

1.The Assignor hereby sells,  transfers  and  assigns  •%  of its  right,  title  and interest in, to and under the Credit Agreement, under the Note (including, without limitation, its interest in the indebtedness evidenced by the Note) and under the Security Documents to the Assignee. Simultaneously herewith, the Assignee shall pay to the Assignor an amount equal to the product derived  by multiplying (a) $•, being the sum of the present outstanding principal balance of the Loan, by (b) the Assignor's percentage of interest in the Loan transferred pursuant hereto.

2.The Assignee hereby assumes •% of the obligations of the Assignor under the Credit Agreement (including, but not limited to, the obligation to advance its respective percentage of the Loan as and when required) and shall hereinafter be deemed a "Lender" for all purposes of the Credit Agreement, the Note, the Security Documents and any other Assignment

2

and Assumption  Agreement(s),  the Assignee's  Commitment  thereunder  being  $• in respect  of the Loan.

3.The Assignee shall pay an administrative fee of US$3,000 to the  Facility Agent to reimburse the Facility Agent for its cost in processing the assignment and assumption herein contained.

4.All references in the Note and in each of the other Security Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as assigned and assumed pursuant to the terms hereof.

5.The Assignee irrevocably designates and appoints the Facility Agent as its agent and irrevocably authorizes the Facility Agent to take such action on its behalf and to exercise such powers on its behalf under the Credit Agreement, under the Note and under the other Security Documents, each as supplemented hereby, as are delegated to the Facility Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto all as provided in Section 17 of the Credit Agreement.

6.Every notice or demand under this Agreement shall be in writing and may be given by facsimile and shall be sent as follows:

If to the Assignor:

[NAME OF ASSIGNOR]

[ADDRESS]

Facsimile No.:

Attention:

If to the Assignee

[NAME OF ASSIGNEE]

[ADDRESS]

Facsimile No.:

Attention:

Every notice or demand hereunder shall be deemed to have been received at the time of receipt thereof.

EACH OF THE ASSIGNOR, AND BY ITS ACCEPTANCE HEREOF, THE ASSIGNEE, HEREBY \VAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY :MATTER \VHATSOEVER ARISING OUT OF OR IN ANY \VAY CONNECTED \VITH THIS AGREE:MENT.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

This Agreement may be executed  in several counterparts with the same effect as if the parties executing such counterparts shall have all executed one agreement as of the date hereof,

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each of which counterparties when executed and delivered shall be deemed to be an original and all of such counterparts together shall constitute this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the day and year first above written.

[NAME OF ASSIGNOR]

Name:

Title:

[NAME OF ASSIGNEE]

Name:

Title:

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EXHIBIT E

ASSIGNMENT OF EARNINGS, CHARTERPARTIES  AND REQUISITION COMPENSATION

in respect of

GREEN BAY

by

WATERMAN  STEAMSHIP CORPORATION,

as Owner

in favor of

DVB BANK SE,

as Security Trustee

July _, 2014

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ASSIGNMENT  OF EARNINGS,  CHARTERPARTIES  AND REQUISITION COMPENSATION

GREEN BAY

THIS ASSIGNMENT OF EARNINGS, CHARTERPARTIES AND REQUISITIONCOMPENSATION   (this   "Assignment")   is   made   as   of   theday of July, 2014 by WATERMAN STEAMSHIP CORPORATION,  a corporation  incorporated  and  existing under the laws of the State of New York (the "Assignor"), as assignor, in favor of DVB BANK SE, a banking corporation organized under the laws of the Federal Republic of Germany ("DVB") (together with its successors and permitted assigns, in such capacity, the "Assignee"), as Security Trustee (as such term is hereinafter defined).

W I T N E S S E T H  T H A T :

WHEREAS:

(A)The Assignor is the sole owner of the whole of the pure car truck carrier GREEN BAY, built in 2007 and registered under the laws of the United States of America with Official No. 9339818 (the "Vessel");

(B)By a credit agreement dated as of July _, 2014 (the "Credit Agreement"), made by and among (1) the Assignor, as borrower, (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB, as facility agent for the Lenders and security trustee for the Lenders (in such capacity, the "Security Trustee"), and (5) DVB, as mandated lead arranger, the Lenders have agreed to make available to the Assignor, a secured term loan in the amount of up to Thi1iy Eight Million Five Hundred Thousand Dollars ($38,500,000) (the "Loan"); and

(C)It is a condition precedent to the availability of the Advances under the Credit Agreement that the Assignor execute and deliver to the Assignee, as security for the obligations of the Assignor to the Creditors under or in connection with the Credit Agreement an assignment of all of the Assignor's right, title and interest in and to the earnings of, requisition compensation of, and charters covering, the Vessel.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Assignor:

1.Defined Terms. Unless otherwise defined herein, terms  defined  in  the Credit Agreement shall have the same meanings when used herein.

2.Grant   of   Security.    The  Assignor,  as  legal  and  beneficial  owner,  does hereby  assign,  transfer  and set over unto the Assignee,  for the benefit  of the Assignee  and its

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successors  and  assigns,  and  does  hereby  grant  the  Assignee  a security  interest  in  all  of the Assignor's right, title and interest in and to:

A.any charter or other contract to which it is a party now or hereafter entered into by the Assignor in respect of the Vessel;

B.all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Assignor or the Security Trustee (net of charter commissions payable in respect of the Vessel) and which arise out of the use or operation of the Vessel, including (but  not limited to): (a) except to the extent that they fall within paragraph (b), (1) all freight, hire and passage moneys, (2) compensation payable in event of requisition of the Vessel for hire, (3)remuneration for salvage and towage services, (4) demurrage and detention moneys, (5) damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of the Vessel, (6) all moneys which are at any time payable under Insurances in respect of loss of hire and, (b) if and whenever, with the consent of the Assignee, the Vessel is employed on terms whereby any moneys falling within (1) to (6) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing  arrangement which is attributable to the Vessel; and

C.all proceeds of all of the foregoing.

3.Notice   of  Assignment.    The  Assignor  will  (a) give  notice,  in  the  form annexed hereto as Exhibit  1 of this Assignment to any charterer or contractee of the Vessel and cause such charterer or contractee of the Vessel to execute and deliver to the Assignee  a Consent and Agreement in the form annexed as Exhibit 2 to this Assignment and (b) give notice, in the form annexed hereto as Exhibit 1 of this Assignment to any subcharterer or subcontractee of the Vessel for a period in excess of twelve months and use its best efforts to cause such subcharterer or subcontractee of the Vessel to execute and deliver to the Assignee a Consent and Agreement substantially in the form annexed as Exhibit 2 to this Assignment.

4.Payment. Upon the occurrence of an Event of Default, the Assignor shall cause all sums payable to the Assignor and assigned hereby, whether as charter hire, freight, indemnities or otherwise, to be paid directly to an account designated by the Assignee.

5.Performance under Charters; No Duty of Inquiry. The Assignor hereby undertakes that, notwithstanding the assignment herein contained, it shall punctually perform all its obligations under all charters and contracts pertaining to the Vessel to which it is a party. It is hereby expressly agreed that, anything contained herein to the contrary notwithstanding, the Assignor shall remain liable under all charters and contracts pertaining to the Vessel to which it is a party to perform the obligations assumed by it thereunder, and the Assignee shall have no obligation or liability under any such charter or contract by reason of or arising out of the assignment contained herein, nor shall the Assignee be required to assume or be obligated in any manner to perform or fulfill any obligation of the Assignor under or pursuant to any such charter or contract or to make any payment or make any inquiry as to the nature or sufficiency of any payment received by the Assignee, or, unless and until indemnified to its satisfaction, to present or file any claim or to take any other action to collect or enforce the payment of any amounts

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which may have been assigned to it or to which it may be entitled hereunder or pursuant hereto at any time or times.

6.Requisition. The Assignor  shall promptly notify the Assignee in writing of the commencement and termination of any period during which the Vessel may be requisitioned.

7.Employment of Vessel. The Assignor hereby further covenants and undertakes promptly to furnish the Assignee with all such information as it may from time to time require regarding the employment, position and engagements of the Vessel.

8.Negative Pledge. The Assignor does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the moneys and claims hereby assigned to anyone other than the Assignee, and it will not take or omit to take any action, the taking or omission of which might result in an alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment; and the Assignor does hereby irrevocably appoint and constitute the Assignee as the Assignor's true and lawful attorney-in-fact with full power (in the name of the Assignor or otherwise) should an Event of Default have occurred  and be continuing to ask, require, demand, receive, compound and give acquaintance for any and all moneys and claims for moneys assigned hereby, to endorse any checks or other instruments or orders in connection therewith, to file any claims or take any action or institute any proceedings which the Assignee may deem to be necessary or advisable in the premises and to file any and all Uniform Commercial Code financing statements or renewals thereof in connection with this Assignment without the signature of the Assignor which the Assignee may deem to be necessary or  advisable in order to perfect or maintain the security interest granted hereby.

9.Application  of  Proceeds.   All moneys  collected  or received  from time  to time by the Assignee pursuant to this Assignment  shall be dealt with as provided  in the  Credit Agreement.

10.Further Assurances.  The Assignor agrees that at any time and from time to time, upon the written request of the Assignee, the Assignor will promptly and duly execute and deliver any and all such further instruments (including an executed, undated notice of assignment to the relevant charterer, which, upon the occurrence and during the continuation of an Event of Default, enables the Security Trustee to redirect the payment of any Earnings under the relevant Approved Charter (other than the Initial Charter Party Agreement)  to the Retention Account) and documents as the Assignee may deem desirable in obtaining the full benefits of this Assignment and of the rights and powers herein granted.

11.Remedies Cumulative and Not Exclusive; No Waiver. Each  and  every right, power and remedy herein given to the Assignee shall be cumulative  and  shall  be  in addition to every other right, power and remedy of the Assignee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Assignee, and the exercise or the beginning of the

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exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power' or remedy. No delay or omission by the Assignee or any of the Lenders in the exercise of any right or power or in the pursuance of any remedy accruing upon any breach or default by  any Person shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Assignee or any of the Lenders of any security or of any payment of or on account of any of the amounts due from any Person under or in connection with the Credit Agreement or any document delivered in connection therewith and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach or default not completely cured thereby.

12.Invalidity. If any provision of this Assignment shall at any time for any reason be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions  of this Assignment, or the validity of this Assignment as a whole. In the event that it  should transpire that by reason of any law or regulation, or by reason of a ruling of any court, or by any other reason whatsoever, the assignment herein contained is either wholly or partly defective, the Assignor hereby undertakes to furnish the Assignee with an alternative assignment or alternative security and/or to do all such other acts as, in the sole opinion of the Assignee, shall be required in order to ensure and give effect to the full intent of this Assignment.

13.Continuing Security. It is declared and agreed that the security created by this Assignment shall be held by the Assignee as a continuing security for the payment of all moneys which may at any time and from time to time be or become payable by the Assignor under the Credit Agreement and that the security so created shall not be satisfied by an intermediate payment or satisfaction of any part of the amount hereby secured and that  the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Assignee for all or any part of the moneys hereby secured.

14.Waiver; Amendment. None of the terms and  conditions  of  this Assignment may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Assignee and the Assignor.

15.Termination. If the Assignor shall pay and discharge all of its obligations under or in connection with the Credit Agreement or is released therefrom in accordance with the terms thereof, all of the right, title and interest herein assigned shall revert to the Assignor and this Assignment shall terminate.

16.\ VAIVER OF JURY TRIAL. EACH OF THE ASSIGNOR, AND, BY ITS ACCEPTANCE HEREOF, THE ASSIGNEE,  HEREBY \VAIVES  TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY .MATTER \VHATSOEVER ARISING  OUT  OF  OR  IN  ANY  \VAY  CONNECTED  \VITH  THIS  ASSIGNMENT.

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17.Notices.  Notices and other communications hereunder shall be in writing and may be sent by facsimile as follows:

If to the Assignor:

WATERMAN  STEAMSHIP CORPORATION

11 N01ih Water Street

Suite 18290

Mobile, Alabama 36602

Attention:  Chief Financial Officer

Facsimile: (251) 243 9121

with a copy to:

International  Shipholding Corporation

One Whitehall Street

New York, New York 10004 Attention:

Niels M. Johnsen

Facsimile:  (212) 514-5692/(212)  809-9036

Telephone: (212) 943-4141

If to the Assignee:

DVB BANK SE

Park House

16-18 Finsbury Cir

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cus London EC2M 7EB

Attention:  Peter Attridge

Department: Transaction and Loan Services Email:

tls.london@dvbbank.com

Fax:  +44 207 256 4352

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017

Facsimile: + 1 212 858 2664

Attention:  Christoph Clauss

Email: christoph.clauss@dvbbank.com

or to such other address as either party shall from time to time specify in writing to the other. Any notice sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter.

Every notice or other communication shall, except so far as otherwise expressly provided by this Assignment, be deemed to have been received (provided that it is received prior to 10 a.m. New York time; otherwise it shall be deemed to have been received on the next

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following Banking Day) in the case of a facsimile on the date of dispatch thereof (provided further that if the date of dispatch is not a Banking Day in the locality of the party to whom such notice or demand is sent, it shall be deemed to have been received on the next following Banking Day in such locality), and in the case of a letter, at the time of receipt thereof.

18.Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflicts principles.

19.Headings.In this Assignment,Section headingsare inserted for convenience of reference only and shall be ignored in the interpretation hereof.

[Signature page  to follow}

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IN WITNESS WHEREOF, the Assignor has caused this Assignment to be executed as of the day and year first above written.

WATERMAN  STEAMSHIP CORPORATION

By:   _____________________________________________

Name:

Title:

EXHIBIT 1

NOTICE AND ACKNOWLEDGMENT  OF

ASSIGNMENT OF EARNINGS AND TIME CHARTER AND

SUBORDINATION  AGREEMENT

TO: NIPPON YUSEN KAISHA

PLEASE BE ADVISED that certain Lenders have agreed to provide a term loan in the amount of up to Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) (the "Loan") and other financial accommodations in favor of Waterman Steamship Corporation ("Waterman"), pursuant  to and in connection  with  a credit  agreement  dated  as of July    , 2014, (the "Credit Agreement"), made by and among (1) Waterman, as borrower, (2) International Shipholding Corporation, as guarantor (in such capacity and together  with Waterman, the "Security Parties"), (3) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any  bank or financial institution which becomes a Lender pursuant to Section 12 of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB BANK SE , a banking corporation organized under the laws of Germany ("DVB"), as facility agent for the Lenders (in such capacity, the "Facility Agent") and security trustee for the Lenders (in such capacity, the "Security Trustee"), and (5) DVB, as mandated lead arranger (together with the Security Trustee, the Facility Agent,  the  Lenders,  the "Creditors"). As security for the obligations of the Security Parties arising under or in connection with the Credit Agreement, Waterman, as owner and mortgagor, has granted a first preferred mortgage lien and security interest in the United States flag vessel GREEN BAY, Official Number 9339818 (the "Vessel"), pursuant to a First Preferred Mortgage, dated as of July, 2014 (the "Mortgage"), executed by Waterman in favor of the Security Trustee (together with its successors and assigns, the "Mortgagee"). As further security for the obligations of the Security Parties arising under the Credit Agreement and the other Transaction Documents (as defined in the Credit Agreement) and pursuant to that certain Assignment of Earnings, Charterparties and Requisition Compensation, dated as of July , 2014 (the "Assignment"), Waterman has assigned and granted a security interest in all of its right, title and interest in and to the earnings of, requisition compensation of and charters covering the  Vessel,  including, without limitation, that certain Time Charter of the Vessel, dated June 24, 2014 (the "Time Charter"), between Waterman and Nippon Yusen Kaisha (hereinafter "you" or  "NYK"). Copies of the Mortgage (without Exhibits) and the Assignment are attached hereto for your files.

The assignment of the Time Charter is only for the purposes of security, and Waterman will continue to perform all of its obligations under the Time Charter. Until such time, if any, that you receive written notice from the Mortgagee of a default by the Security Parties under the Credit Agreement or related Transaction Documents (as defined in the Credit Agreement), and a demand by the Mortgagee for the payment of charter hire and other sums due from NYK to Waterman under the Time Charter directly to the Mortgagee, you may continue to  tender all performance due under the Time Charter to Waterman. Upon receipt of written notice from the Mortgagee of a default by the Security Parties under the Credit Agreement or related Transaction Documents (as defined in the Credit Agreement),  and a written demand from the Mortgagee to

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tender all further payments of charter hire and other sums payable  under  the  Time  Charter directly to the M01igagee, you are hereby authorized and directed immediately, without further consent or authorization from Waterman, to tender all further payments and performance under the Time Charter to the M01igagee, in accordance with and subject to the terms and conditions of the Time Charter. Any tender of performance to the Mortgagee pursuant  to  this  authorization shall be deemed to satisfy any and all of the obligations of NYK to Waterman under the Time Charter, to the extent of such performance, as fully as if such performance had been tendered directly to Waterman.

Itis a condition to the extension of credit to Waterman under the Credit Agreement and related Transaction Documents (as defined in the Credit Agreement) that NYK agree to subordinate all of its right, title and interest in and to the Vessel under the Time Charter to the interests of the Mortgagee under the Mortgage. By signing below, NYK agrees that, under the terms of this subordination, notwithstanding the effective date of the Time Charter  and  the delivery of the Vessel thereunder, all right, title and interest of the Mortgagee in and to the Vessel, and all right, title, interest, liens and security interests of the Mortgagee arising under the Mortgage, shall, for all times and for all purposes, be superior in rank, preference and priority to any right, interest, claim, lien or security interest in or against the Vessel, whether now existing or hereafter arising, in favor of NYK, whether arising under the Time Charter or  otherwise. Without limiting the foregoing, NYK  agrees that at no time and under no circumstance shall it seek to challenge, invalidate or assert priority over any right, title or interest of the Mo1igagee in and to the Vessel, or any right, title, interest, liens and security interests of the Mortgagee under the Mortgage or the Assignment. NYK further agrees that, so long as the Mortgage remains in effect, it will forbear from exercising any lien rights against the Vessel arising under the Time Charter or under applicable law and that it will not foreclose on any claim, lien and/or security interest created in its favor under the Time Charter or otherwise without the prior written consent of the Mortgagee first being obtained. In the event of  foreclosure by NYK,  NYK  shall  not accept any proceeds from any foreclosure (or sale) of the Vessel unless and until the indebtedness and other obligations of the Security Parties (including interest, fees and expenses (including fees and expenses related to the repossession of the Vessel)) to the Creditors under the Credit Agreement and related Transaction Documents (as defined in the Credit Agreement) have been fully paid.

Finally, in addition to the right of the Mortgagee under the Assignment to collect charter hire payable by NYK under the terms of the Time Charter following the occurrence and during the continuance of a default by Waterman or any other Security Party under the Credit Agreement, the Mortgage or other Transaction Document (as defined in the Credit Agreement), the Mortgagee, pursuant to section 7(B) of the Mortgage, is authorized, in its discretion, among other remedies, to repossess the Vessel and following repossession to sell the Vessel under terms acceptable to the Mortgagee. In consideration of the agreement of NYK  to  subordinate  and forbear from the enforcement of any lien rights in its favor against the Vessel, the Mo1igagee agrees that, should the Mortgagee elect to repossess and sell the Vessel following a default under the Credit Agreement, the Mortgage or other Transaction Document (as defined in the Credit Agreement), prior to any such repossession and sale, the Mortgagee will forward written notice of the default and its intention to repossess  and sell the Vessel (a "Notice  of  Intent") to NYK,

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and grant to NYK the option to purchase the Vessel which shall be exercisable by NYK only so long as the Time Charter remains in force in accordance with its terms.

In the event that the Mortgagee has  elected to sell the Vessel (either at a non-judicial public auction or by private sale) following repossession, the Notice of Intent shall disclose that intention, and prior to any such sale, NYK or its nominee shall have the option to purchase the Vessel following the completion of repossession of the Vessel and its acquisition by Mortgagee for a cash purchase price equal to (A) the fair market value of the Vessel as determined by the arithmetic average of valuations of the Vessel obtained from two approved ship brokers listed on Schedule I hereto, one such approved ship broker to be appointed by the Mortgagee and the second approved ship broker to by chosen by NYK and appointed by the Mortgagee (however, if the two appraisals differ by more than 15% then the Mortgagee shall appoint a third  approved ship broker and the arithmetic average of all three approved ship brokers shall be the fair market value of the Vessel), plus (B) any taxes, duties, fees, assessments or charges of  any nature imposed by any  governmental authority relating to the sale, registration, use, delivery  of the Vessel (the "Purchase Price"). Each of the Mortgagee and NYK shall be entitled to receive copies of all appraisal obtained in connection herewith. Any sale of the Vessel to NYK pursuant to the foregoing option shall be on an "AS IS, WHERE IS" basis without any warranties whatsoever (other than a warranty that the Mortgagee will transfer such title to the Vessel as was conveyed to the Mortgagee in connection with the repossession free and clear of any liens or other encumbrances imposed by the Mortgagee).   If NYK elects to purchase the Vessel pursuant to the foregoing option, NYK shall provide written notice  to  the  Mortgagee  of that  election within ten (10) business days following receipt by NYK of the Notice of Intent issued by the Mortgagee. After the timely delivery of such notice to purchase to the Mo1igagee from NYK and subject to the acquisition of title to the Vessel by the Mortgagee in connection with the repossession, NYK shall consummate the purchase of the Vessel by tender of the Purchase Price to the Mortgagee, in U.S. Dollars, and in good and indefeasible funds, within ten (10) days following the receipt by NYK of written notice from the Mortgagee of the acquisition of title to the Vessel by Mortgagee in connection with the repossession (the "Closing Date").

If NYK fails to provide timely notice of its election to purchase the Vessel pursuant to the foregoing purchase option and consummate the purchase of the Vessel by the Closing Date, the Mortgagee may proceed to sell or charter the Vessel to any person free of any liens or other interest arising in favor of NYK under the Time Charter. Any right, interest, claim, lien or security interest in or against the Vessel in favor of NYK arising under the terms of the Time Charter shall remain subject and subordinate to the rights of the Mortgagee as provided above and shall be deemed to attach, if at all, only to any proceeds of the sale of the Vessel remaining after the satisfaction of all indebtedness and other obligations of the Security Parties (including interest, fees and expenses (including fees and expenses related to the repossession  of  the Vessel)) to the Creditors under and in connection with the Credit Agreement and the related Transaction Documents (as defined in the Credit Agreement).

Please acknowledge your receipt of this notice, your agreement to comply with the instructions set forth above, your agreement to  subordinate your interests in the Vessel arising pursuant to the Time Charter and applicable law to the interests of the Mortgagee in the Vessel arising pursuant  to the Mortgage  under  the terms  set forth above and your  agreement  to  and

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understanding of the terms of the purchase option granted above by signing in the  signature block below. By signing below, you acknowledge that the Mortgagee and the other, Creditors are relying on this Notice and Acknowledgment, and your agreement to subordinate your rights with respect to the Vessel under the Time Charter as provided herein, as an inducement to provide and continue to provide financing to Waterman under  the Credit Agreement. Except as expressly provided above, your signature below is without prejudice to any rights which NYK may have under the Time Charter including but not limited to the right to make deductions  from  the payment of charter hire to the extent of claims which NYK may have against Waterman or the Vessel to the extent permitted pursuant to the terms of the Time Charter.

Any written notices which are to be exchanged in writing (which shall include prepaid overnight courier, facsimile transmission, electronic transmission or similar writing) hereunder shall be given at the address, facsimile number or email address for the addressee set forth in Schedule II or at such other address, facsimile number or email address as  such party may hereafter specify for the purpose by notice to each other party hereto.

[ Signature Page Follows]

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--

Dated:_, 2014

WATERMAN STEAMSHIP CORPORATION

By:__________________

Name:

Tit

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le:

DVB BANK SE,

as Facility Agent and Security Trustee

By:_________________________________________

Name:

Title:

By:__________________________

Name:

Title:

ACKNOWLEDGED,  ACCEPTED  AND AGREED THISDAY OF

--------' 2014

NIPPON YUSEN KAISHA

By:______________________

Name:

Title:

APPROVED  SHIP BROKERS

Braemar Shipbrokers Ltd.

35 Cosway Street

London NWl  5BT

England

Telephone No.: +44 297 535 2600

Facsimile No.: +44 207 535 2601

Jacq. Pierot Jr. &  Sons, Inc. (USA)

29 Broadway

New York, NY 10006

Telephone No.: + 1 212 344 3840

Facsimile No.: + 1 212 943 6598

R.S. Platou Shipbrokers a.s.

Haakon VII's gate 10

Oslo, Norway

Telephone No.: +47 23 11 20 00

Facsimile No.: +47 23 11 23 11

Feamleys A/S

Grev Wedels plass 9

Oslo, Norway

Telephone No.: +47 22 93 60 00

Facsimile No.: +47 22 93 61 50

H. Clarkson &  Company

12 Camomile Street

London EC3A 7BP

England

Telephone No.: +44 207 334 0000

Facsimile No.: +44 207 283 5260

Hesnes Shipping AS

P.O Box, 104, Borgheim

3163 Notteroy

Norway

Telephone No.: +47 33 30 44 44

Facsimile No.: +47 33 32 30 30

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SCHEDULE I

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EXHIBIT 2

SCHEDULE II

NOTICES

If to Waterman Steamship Corporation

11 North Water Street, Suite 18290

Mobile, Alabama 36602, USA

Facsimile No.:   (251)-243-9121

Attention: Chief Financial Officer

with a copy to:

One Whitehall  Street

New York, NY  10004

Facsimile No.:   (212) 514-5692

Attention:  Mr. Niels M. Johnsen

If to DVB Bank SE, as Facility Agent and Security Trustee

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom

Attention:  Peter Attridge

Department: Transaction and Loan Services

Email:  tls.london@dvbbank.com

Fax: +44 207 256 4352

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA

Facsimile: + 1 212 858 2664

Attention:   Christoph Clauss

Email:  christoph.clauss@dvbbank.com

If to NIPPON YUSEN KAISHA

NIPPON YUSEN KAISHA

2-3-2, Marunouchi,  Chiyoda-Ku

Tokyo  100-0011, Japan

Telephone No: +81 3 3284 5670

Facsimile No.: +81 3 3284 6360

Attention:  CARFLEET

EXHIBIT F

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ASSIGNMENT OF INSURANCES

in respect of GREEN BAY

by

WATERMAN STEAMSHIP CORPORATION,  as Owner

in favor of

DVB BANK SE,

as Security Trustee

July _, 2014

ASSIGNMENT  OF INSURANCES GREEN BAY

THIS ASSIGNMENT  OF INSURANCES  (this "Assignment") is made as of the_ day of July, 2014 by WATERMAN STEAMSHIP CORPORATION, a corporation incorporated and existing under the laws of the State of New York (the "Assignor"), as assignor, in favor of DVB BANK SE, a banking corporation organized under the laws of the Federal Republic of Germany ("DVB") (together with its successors and permitted assigns, in such capacity, the "Assignee"), as Security Trustee (as such term is hereinafter defined).

W I T N E S S E T H T H A T:

WHEREAS:

(A)The Assignor is the sole owner of the whole of the [insert appropriate number]-vehicle capacity pure car truck carrier GREEN BAY, built in 2007 and registered under the laws of the United States of America with Official No. 9339818 (the "Vessel");

(B)By a credit agreement dated as of July _, 2014 (the "Credit Agreement"), made by and among (1) the Assignor, as borrower, (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) the banks and financial institutions listed on Schedule I of the Credit Agreement, as lenders (together with any bank or financial institution which becomes a

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Lender pursuant to Section 12 of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB, as facility agent for the Lenders and security trustee for the Lenders (in such capacity, the "Security Trustee") and (5) DVB, as mandated lead arranger, the Lenders have agreed to make available to the Assignor, a secured term loan in the amount of up to Thirty Eight Million Five Hundred Thousand Dollars($38,500,000)  (the "Loan"); and

(C)It is a condition precedent to the availability of the Advance under the Credit Agreement that the Assignor execute and deliver to the Assignee, as security for the obligations of the Assignor to the Creditors under or in connection with the Credit Agreement an assignment of any and all insurances taken out in respect of the Vessel and its earnings.

NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Assignor:

1.Defined Terms. Unless otherwise defined herein, terms defined  in the Credit Agreement shall have the same meanings when used herein.

2.Grant   of   Security.    The  Assignor,  as  legal  and  beneficial  owner,  does hereby  assign, transfer  and set over unto the Assignee,  for the benefit  of the Assignee  and its successors and  assigns,  and  does hereby  grant  the Assignee  a security  interest  in,  all  of the Assignor's right, title and interest in, to and  under  all  policies  and  contracts  of  insurance, including the Assignor's rights under all entries in any Protection and Indemnity or  War Risks

Association or Club, which are from time to time taken out by or for the Assignor in respect of the Vessel, her hull, machinery, freights, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever  nature, as well as return premiums (all of which are herein collectively called the "Insurances"), and in and to all moneys and claims for moneys in connection therewith and all proceeds of all of the foregoing.

3.Notices;   Loss   Payable   Clauses.   

(A)  All  Insurances,  except  entries  in Protection  and Indemnity Associations  or Clubs or insurances  effected in lieu of such  entries, relating to the Vessel shall contain a loss payable and notice of cancellation clause in the form of Exhibit 1 hereto or in such other form as the Assignee may agree.

(B) All entries  in Protection and Indemnity Associations or Clubs or insurances effected in lieu of such entries relating to the Vessel shall contain a loss payable and notice of cancellation clause in the form of Exhibit 2 hereto or in such other form as the Assignee may agree.

Assignee that:

4.Covenants   and  Undertakings.The Assignor  hereby  covenants  with  the

(A)It will do or permit to be done each and every act or thing which the Assignee may from time to time reasonably require to be done for the purpose of enforcing the

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Assignee's rights under this Assignment and will allow its name to be used as and when required by the Assignee for that purpose; and

(B)It will forthwith give notice in the form set out in Exhibit 3 hereto, or cause its insurance brokers to give notice, of this Assignment to all insurers, underwriters, clubs and associations providing insurance in connection with the Vessel and her earnings and procure that such notice is endorsed on all the policies and entries of insurances in respect of the Vessel and her earnings.

5.No   Duty   of   Inquiry.    The  Assignee  shall  not  be  obliged  to  make  any inquiry as to the nature or sufficiency of any payment received by it hereunder  or to make  any claim or take any other action to collect any moneys or to enforce any rights and benefits hereby assigned to the Assignee or to which the Assignee may at any time be entitled hereunder  except such reasonable action as may be  requested  by  any  underwriter,  association  or  club.    The Assignor shall remain liable  to  perform  all  the  obligations  assumed  by  it  in  relation  to  the property hereby assigned and the Assignee shall be under no obligation of any kind whatsoever in respect thereof or be under any  liability  whatsoever   (including,  without   limitation,  any obligation or liability with respect to the payment  of premiums,  calls,  assessments or any other sums at any time due and owing in respect of the Insurances) in the event of any failure by the Assignor to perform such obligations.

6.Negative Pledge. The Assignor does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the moneys and claims hereby assigned, to anyone other than the Assignee, and it will not take or omit to take any action, the taking or omission of which might result in an alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment;  and the

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Assignor hereby irrevocably appoints and constitutes the Assignee as the Assignor's true  and lawful attorney-in-fact with full power (in the name of the Assignor or otherwise) should an Event of Default have occurred and be continuing to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys assigned hereby, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Assignee may deem to be necessary  or advisable and otherwise to do any and all things which the Assignor itself could do in relation to the property hereby assigned, including, but not limited to, filing any and all Uniform Commercial Code financing statements or renewals thereof in connection with this Assignment, without the signature of the Assignor, which the Assignee may deem to be necessary  or advisable in order to perfect or maintain the security interest granted hereby.

7.Further Assurances. The Assignor agrees that any time and from time to time upon the written request of the Assignee it will promptly and duly execute and deliver to the Assignee any and all such further instruments and documents as the Assignee may reasonably deem advisable in obtaining the full benefits of this Assignment and of the rights and powers herein granted.

8.Remedies Cumulative and Not Exclusive; No Waiver. Each  and  every right, power and remedy herein given to the Assignee shall be cumulative  and  shall  be  in addition to every other right, power and remedy of the Assignee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Assignee, and the exercise or the beginning of the exercise of any right,  power or remedy shall not be  construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No delay or omission by the Assignee in the exercise of any right or power in the pursuance of any remedy accruing upon any breach or default by any Person shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Assignee of any security or of any payment of or on account of any of the amounts due from any Person under or in connection with the Credit Agreement or any document delivered in connection therewith and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach  or default not completely cured thereby.

9.Invalidity. If any provision of this Assignment shall at any time for any reason be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Assignment, or the validity of this Assignment as a whole. In the event that it  should transpire that by reason of any law or regulation, or by reason of a ruling of any court, or by any other reason whatsoever, the assignment herein contained is either wholly or partly defective, the Assignor hereby undertakes to furnish the Assignee with an alternative assignment or alternative security and/or to do all such other acts as, in the sole opinion of the Assignee, shall be required in order to ensure and give effect to the full intent of this Assignment.

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10.Continuing Security. It is declared and agreed that the security created by this Assignment shall be held by the Assignee as a continuing security for the payment of all moneys which may at any time and from time to time be or become payable by the Assignor under the Credit Agreement and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby secured and that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any other collateral or security now or hereafter held by the Assignee for all or any part of the moneys hereby secured.

11.Waiver; Amendment. None of the terms and  conditions  of  this Assignment may be changed, waived, modified or varied in any manner whatsoever unless  in writing duly signed by the Assignee and the Assignor.

12.Termination.  If the Assignor shall pay and discharge all of its obligations under or in connection with the Credit Agreement or is released therefrom in accordance with the terms thereof, all the right, title and interest herein assigned shall revert to the Assignor, and this Assignment shall terminate.

13.WAIVER OF JURY TRIAL. EACH OF THE ASSIGNOR, AND, BY ITS ACCEPTANCE HEREOF, THE ASSIGNEE, HEREBY \VAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER \VHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED \VITH THIS ASSIGNMENT.

14.Notices. Notices and other communications hereunder shall be in writing and may be given or made by facsimile as follows:

If to the Assignor:
	WATERMAN STEAMSHIP CORPORATION
	11 North Water Street
	Suite 18290
	Mobile, Alabama 36602
	Attention:  Chief Financial Officer
	Facsimile: (251) 243 9121
	with a copy to:
	International  Shipholding Corporation
	One Whitehall Street
	New York, New York 10004
	Attention: Niels M. Johnsen
	Facsimile:  (212) 514-5692/(212)  809-9036
	Telephone: (212) 943-4141

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If to the Assignee:
	DVB BANK SE
	Park House
	6-18 Finsbury Circus
	London EC2M 7EB
	Attention:  Peter Attridge
	Department: Transaction and Loan Services
	Email: tls.london@dvbbank.com
	Fax:  +44 207 256 4352
	with a copy to:
	DVB TRANSPORT (US) LLC
	609 Fifth Avenue, 5th Floor
	New York, New York 10017
	Facsimile: + 1 212 858 2664
	Attention:   Christoph Clauss
	Email: christoph. clauss@dvb bank. com

or to such other address as either party shall from time to time specify in writing to the other. Any notice or communication sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter.

Every notice or other communication shall, except so far as otherwise expressly provided by this Assignment, be deemed to have been received (provided that it is received prior to 10 a.m. New York time; otherwise it shall be deemed to have been received on the next following Business Day) in the case of a facsimile at the time  of dispatch thereof (provided further that if the date of dispatch is not a Business Day in the locality of any party to whom such notice or communication is sent it shall be deemed to have been received on the next following Business Day in such locality), and in the case of a letter, at the time of receipt thereof.

15.Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflicts principles.

16.Headings. In this Assignment, Section headings are inserted for convenience of reference only and shall be ignored in the interpretation hereof.

[Signature page  to follow}

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IN  WITNESS  WHEREOF,   the  Assignor  has  caused  this  Assignment  to  be executed and delivered as of the day and year first above written.

WATERMAN  STEAMSHIP CORPORATION

By:

Name:

Title:

SK010290083 6034321v7

EXHIBIT 1

LOSS PAYABLE  CLAUSE

Hull and Machinery

Loss, if any, payable to DVB Bank SE, as mortgagee (the "M01igagee"), for distribution by it to itself and to WATERMAN STEAMSHIP CORPORATION, as owner (the "Owner"), as their respective interests may appear, or order, except that, unless underwriters have been otherwise instructed by notice in writing from the Mortgagee, in the case of any loss involving any damage to the Vessel, the underwriters may pay directly for the repair, salvage, and  other  charges involved or, if the Owner shall have first fully repaired the damage or paid all of the salvage and other charges, then the underwriters may pay the Owner as reimbursement therefore; provided, however, that if such damage involves a loss of U.S.$[500,000] or more or its equivalent, the underwriters shall not make such payment without first obtaining the written consent thereto of the Mortgagee.

In the event of the actual total loss or agreed, compromised or constructive total loss of the Vessel, payment shall be made to the Mortgagee for distribution by it to itself and to the Owner as their respective interests appear.

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EXHIBIT 2

LOSS PAYABLE  CLAUSE

Protection  and Indemnity

Payment of any recovery that the Member is entitled to make out of the funds of the Club in respect of any liability, costs or expenses incurred by him shall be made to the Member into that certain account (Account No.  [   ]; Ref: [   ]) unless and until the Club receives notice from DVB Bank SE ("DVB"), in which event all recoveries shall thereafter be paid to DVB, or their order; provided always that no liability whatsoever shall attach to the Club, its Managers or their Agents for failure to comply with the latter obligation until after the expiry of two business days from the receipt of such notice.

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EXHIBIT 3

NOTICE  OF ASSIGNMENT  OF INSURANCES

TO:

TAKE NOTICE:

(a)that by an Assignment  of Insurances dated as of the _ of, 2014 made by us to DVB Bank SE (the "Assignee"), a copy of which is attached hereto, we have assigned to the Assignee as from the date hereof, inter alia, all our right, title and interest in, to and under all policies  and contracts of insurance, including our rights under all entries in any Protection and Indemnity or War Risk Association or Club, which are from time to time taken out by us in respect of the [insert appropriate number]-vehicle capacity pure car truck carrier GREEN BAY, built in 2007 and registered under the laws of the United States of America with Official No. 933981 8 (the "Vessel"), and its earnings and all the benefits thereof including all claims of whatsoever nature (all of which together are hereinafter called the "Insurances").

(b)that you are hereby irrevocably authorized and instructed to make all payments under

(i)all Insurances, except entries in Protection and Indemnity Associations or Clubs or insurances effected in lieu of such entries, relating to the Vessel in accordance with the loss payable clause in Exhibit 1 of the Assignment of Insurances; and

(ii)all entries in Protection and Indemnity Associations  or Clubs or insurances affected in lieu of such entries relating to the Vessel in accordance with the loss payable clause in Exhibit 2 of the Assignment of Insurances.

(c)that you are hereby instructed to endorse the assignment, notice  of which is given to you herein, on all policies or entries relating to the Vessel.

DATED AS OF THE _ day of, 2014.

WATERMAN  STEAMSHIP CORPORATION

By:

Name:

Title:

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We hereby acknowledge receipt of the foregoing Notice of Assignment and agree

to act in accordance with the terms thereof:

By:

Name:

Title:

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EXHIBIT G-1

FIRST PREFERRED MORTGAGE

on the

United States Flag Vessel GREEN BAY

WATERMAN STEAMSHIP CORPORATION,

as Owner

TO

DVB BANK SE,

as Mortgagee

Dated as of' 2014

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SYNOPSIS OF  MORTGAGE

Name and Official	GREEN BAY, Official Number 9339818
Number of Vessel:
Type of Instrument:	First Preferred Mortgage
Date of Instrument:	2014
Name of Owner (Percentage of Vessel owned):	Waterman  Steamship Corporation (100%)
Address of Owner:	11 North Water Street
	Suite  18290
	Mobile, Alabama 36602
Name of Mortgagee:	DVB Bank SE
Address of Mortgagee:	Platz der Republik 6, D-60325 Frankfurt am
	Main, Germany
Total amount of Mortgage:	Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) (exclusive of interest, expenses and fees) and interest and performance of mortgage covenants

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THIS FIRST PREFERRED MORTGAGE (this "Mortgage") is made and given as of the_ day of, 2014 by WATERMAN STEAMSHIP CORPORATION, a corporation incorporated under the laws of the State of New York, with offices at 11 North Water  Street, Suite 18290, Mobile, Alabama 36602 (the "Owner") in favor of DVB BANK SE, a banking corporation organized under the laws of the Federal Republic of Germany ("DVB") with offices at Platz der Republik 6, D-60325 Frankfurt am Main, Germany, as security trustee (hereinafter, in such capacity, called the "Mortgagee") for the Lenders (as such term is defined in the Credit Agreement (as hereinafter defined)), pursuant to the terms of the Credit Agreement.

WHEREAS:

A.The Owner is the sole owner of the whole of the vessel GREEN BAY Official No. 9339818, of 59217 gross tons, 17775 net tons, built in 2007 (the "Vessel"); and registered and documented in the name of the Owner under the laws and flag of the United States of America at the National Vessel Documentation Center.

B.Pursuant  to  a credit  agreement  dated as of, 2014 (the "Credit Agreement", a copy of the forn1 of the Credit Agreement, without schedules or exhibits other than Schedule I is annexed hereto as Exhibit A), made by and among (1) the Owner, as borrower,

(2)INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3)  the banks  and financial institutions listed on Schedule I thereto, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12  of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB, as facility agent for the Lenders, (in such capacity, the "Facility Agent") and as security trustee for the Lenders (in  such capacity, the "Security Trustee") and (5) DVB, as mandated lead arranger, the Security Trustee has agreed to serve in such capacity under the Credit Agreement and the Lenders have agreed to provide to the Owner a secured term loan in the amount of up to Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) (the "Loan"). The obligation of the  Owner to repay the Loan under the Credit Agreement  is evidenced  by a promissory note dated, 2014, from the Owner, to the order of the Facility Agent (the "Note"), a copy of the form of the Note being attached hereto as Exhibit B. The Loan, and interest, fees and commissions thereon are to be repaid or paid, as the case may be, as provided in the Credit Agreement. Unless otherwise defined  herein,  terms defined in the Credit Agreement shall have the same meaning when used herein.

C.Pursuant to Section 17 of the Credit Agreement, the Lenders have appointed the Mortgagee as facility agent and security trustee on their behalf with regard to, inter alia, the security conferred on such Lenders pursuant to the terms of the Credit Agreement,  the Note and the Transaction Documents.

D.The Owner, in order to secure the payment of the Obligations, as that term is defined in subsection l (A)(iv) hereof, and to secure the performance and observance of and compliance with all the covenants, terms and conditions in the Credit Agreement and in this Mortgage contained, expressed or implied, to be performed, observed and complied with by and on the part of the Owner, has duly authorized the execution and delivery of this First Preferred Mortgage under  and pursuant to the United States Ship Mortgage Act, 1920, as amended, inter alia, by Public Law 100-710 (46 USC Section 30101 et seq.) (the "Ship Mortgage Act").

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N O W,  T H E R E F O R E,  T H I S  M O R T G A G E W I T N E S S E T H:

1.Definitions:   In this Mortgage, unless the context otherwise requires:

(A)     (i)"Classification Society" when used herein shall have the same meaning as in the Credit Agreement;

(ii)"Earnings" includes all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner or the Security Trustee (net of charter commissions payable in respect of the Vessel) and which arise out of the use or operation of the Vessel, including (but not limited to): (a) except to the extent that they fall within paragraph (b) (1) all freight, hire and passage moneys, (2) compensation payable in event of requisition of the Vessel for hire, (3) remuneration for salvage and towage services, (4) demurrage and detention moneys, (5) damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of the Vessel, (6) all moneys which are at any time payable under Insurances in respect of loss of hire and, (b) if and whenever, with the consent of the Mortgagee, the Vessel is employed on terms whereby any moneys falling within (1) to (6) above are pooled or shared with any other Person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel;

(iii)"Insurances" includes all policies and contracts of insurance and all entries of the Vessel in a protection and indemnity or war risks association or club which are from time to time taken out or entered into pursuant to this Mortgage in respect of the Vessel and its Earnings or otherwise howsoever in connection with the Vessel;

(iv)"Obligations" means the obligations of the Owner or the Guarantor under or in connection with the Credit Agreement, the Note, this Mortgage, any other Security Document and any Transaction Document, including but not limited to the obligations to repay the Loan when due;

(v)"Person" when used herein shall have the same meaning as in the Credit Agreement;

(vi)"Requisition Compensation" means all moneys or other compensation payable and belonging to the Owner during the Security Period by reason

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of requisition  for title or other  compulsory  acquisition  of the Vessel  or otherwise than by requisition for hire;

(vii)"Security Documents" when used herein shall have the same meaning as in the Credit Agreement;

(viii)"Security Period" means  the period commencing on the date hereof and terminating upon discharge of the security created by this Mortgage by indefeasible payment in full of all of the Obligations;

(ix)"Total Loss" means:

(a)actual, constructive or compromised or arranged total loss of the Vessel;

(b)requisition for title or other compulsory acquisition of the Vessel (otherwise than by requisition for hire) which shall  continue for fourteen (14)  days; or

(c)capture, seizure, arrest, detention or confiscation of the Vessel by any government or by Persons acting or purporting to act on behalf of any government unless the Vessel be released and restored  to the Owner from such capture, seizure, arrest, detention or confiscation within fourteen (14) days after the occurrence thereof; and

(x)"Vessel" means the whole of the vessel described in Recital A hereof and includes its engines, machinery, boats, boilers, masts, rigging, anchors, chains, cables, apparel, tackle, outfit, spare gear, fuel, consumable or other stores, freights, belongings and appurtenances, whether on  board  or ashore, whether now owned or hereafter acquired, and all additions, improvements and replacements hereafter made in or to said vessel, or any part thereof, or in or to the stores, belongings and appurtenances aforesaid except such equipment or stores which, when placed aboard said vessel, do not become the property of the Owner.

(B)In Section 5(B) hereof:

(i)"excess risks" means the prop01iion of claims for general average and salvage charges and under the ordinary running-down clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value;

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(ii)"protection and indemnity risks" means the usual risks covered by  a United States or an English or another protection  and  indemnity association or club acceptable to the M01igagee including the proportion not recoverable in case of collision under the ordinary running-down clause; and

(iii)"war risks" means the risk of mines and all risks excluded from the standard form of  United States marine policy by the War, Strikes and Related Exclusion Clause.

(C)This Mortgage shall be read together with the Credit Agreement but in case of any conflict between the two, the provisions of the Credit Agreement shall prevail.

2.Grant of Mortgage; Representations  and Warranties.

2.1In consideration of the premises and of other good and valuable consideration, the receipt and adequacy whereof are hereby acknowledged, and in order to secure the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in the Credit Agreement, the Note, this Mortgage, the other Security Documents and the other Transaction Documents contained, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage to and in favor of the Mortgagee, its successors and assigns, the whole of the Vessel TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns, forever, upon the terms set forth in this Mortgage for the enforcement of the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in this Mortgage, the Credit Agreement, the Note, the other Security Documents and the other Transaction Documents  contained;

PROVIDED, ONLY, and the conditions of these presents are such that, if the Owner and/or its successors or assigns shall pay or cause to be paid to the  Lenders,  their respective successors  and assigns, the Obligations as and when the same shall become due and payable in accordance with the terms of this Mortgage, the Credit Agreement, the Note and the other Transaction Documents and shall perform, observe and comply with all and singular of the covenants, terms and conditions in this Mortgage, the Credit Agreement, the Note and the other Transaction Documents contained, expressed or implied, to be performed, observed or complied with by and on the part of the Owner or its successors or assigns, all without delay or fraud and according to the true intent and meaning hereof and thereof, then, these presents and the rights of the Mortgagee under this Mortgage shall cease and determine and, in such event, the Mortgagee agrees by accepting this Mortgage, at the expense of the Owner, to execute all such documents as the Owner may reasonably require to discharge this  Mortgage  under  the laws  of the United States of America; otherwise to be and remain in full force and effect.

2.2The Owner hereby represents and warrants to the Mortgagee that:

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(A)the Owner is a corporation duly organized, validly existing and in good standing under the laws of the State of New York qualified to own and register the Vessel under the United States flag and to operate the Vessel in the foreign commerce of the United States of America;

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(B)the Owner lawfully owns the whole of the Vessel free from any security interest, debt, lien, mortgage, charge, encumbrance or other adverse interest, other than the encumbrance of this Mortgage and except as permitted by Section 5(N) hereof; and

(C)the Vessel is tight, staunch and strong and well and sufficiently tackled, appareled, furnished and equipped and in all respects seaworthy.

3.Payment  of  Obligations.   The Owner hereby  further  covenants  and agrees  to pay the Obligations when due to the Mortgagee or its successors or assigns.

That:

4.Covenants Regarding  Security Granted Hereunder.  It is declared and agreed

(A)The security created by this Mortgage shall be held by the Mortgagee as a continuing security for the payment of the Obligations and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of  the  amount  hereby secured.

(B)Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee or the Lenders, related to or which reduces the obligations secured hereby, by the Owner or any other Person being avoided or set-aside or ordered to be refunded or reduced  by virtue of any provision or enactment relating to bankruptcy, insolvency or liquidation for the time being in force, and if such condition is not satisfied, the Mortgagee shall be entitled to recover from the Owner on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred.

(C)The rights of the Mortgagee under this Mortgage and the security hereby constituted shall not be affected by any act, omission, matter or thing which, but for  this provision, might operate to impair, affect or discharge such rights and security, including without limitation, and whether or not known to or discoverable by the Owner, the Mortgagee or any other Person:

(i)any time or waiver granted to, or composition with, the Owner or any other Person; or

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(ii)the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Owner or any other Person; or

(iii)any legal limitation, disability, dissolution, incapacity or other circumstances relating to the Owner or any other Person; or

(iv)any amendment or supplement to the Credit Agreement, the Note, any of the Security Documents or the other Transaction Documents; or

(v)the unenforceability, invalidity or frustration of any obligations of the Owner or any other Person under the Credit Agreement, the Note, any of the Security Documents or the other Transaction Documents.

(D)The Owner acknowledges and  agrees that it has not received any security from any Person for the granting of this Mortgage and it will not take any such security without the prior written consent of the Mortgagee, and the Owner will hold any security taken in breach of this provision in trust for the Mortgagee.

(E)Until the Obligations have been unconditionally and irrevocably paid and discharged in full to the satisfaction of the Mortgagee, the Owner shall not by virtue of any payment made under the Credit Agreement, the Note or this Mortgage  on  account  of  such moneys and liabilities or by virtue of any enforcement by the Mortgagee of its right under or the security constituted by this Mortgage:

(i)be entitled to exercise any right of contribution from any co-surety liable in respect of such moneys and liabilities under any other guarantee, security or agreement; or

(ii)exercise any right of set-off or counterclaim against any such co­ surety; or

(iii)receive, claim or have the benefit of any payment, distribution, security or indemnity from any such co-surety; or

(iv)unless so directed by the Mortgagee (which the Owner shall prove in accordance with such directions), claim as a creditor of any such co-surety in competition with the Mortgagee.

The Owner shall hold in trust for the Mortgagee and forthwith pay or transfer (as appropriate) to the Mortgagee any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.

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(F)The Owner hereby irrevocably subordinates all of its rights of subrogation (whether contractual, statutory, under common law or otherwise) to the claims of the Mortgagee against any Person and all contractual, statutory or common law rights of contribution, reimbursement indemnification and similar rights and claims against any Person which arise in connection with, or as a result of, the Credit Agreement or this Mortgage until full and final payment of all of the Obligations.

5.Affirmative  Covenants  and Insurances.   The Owner further covenants with the Mortgagee and undertakes at all times throughout the Security Period:

(A)To comply with and satisfy all the requisites  and formalities established by the laws of the State of New York in respect of its legal existence and good standing and to maintain its status as a citizen of the United States, within the meaning of Section 2 of the United States Shipping Act, 1916, and to give evidence in respect of the foregoing to the Mortgagee;

(B)(i) To insure and keep the Vessel insured or cause or procure the Vessel to be insured and to be kept insured at no expense to the Mortgagee (or to reimburse the Mortgagee therefore (including with regard to the insurance cover described in (f) below), using brokers, insurance companies, underwriters and/or War Risk/P&I Associations and on such terms as the Mortgagee shall from time to time approve in writing, in regard to:

(a)hull and machinery plus freight  interest and hull interest and any other usual marine risks (such as excess risks);

(b)war risks (including war protection and indemnity liability with a separate limit not less than hull value and including the London blocking and trapping addendum or similar arrangement) covering, inter alia, the perils of confiscation, terrorism, expropriation, nationalization, seizure and blocking;

(c)protection and indemnity risks (including pollution risks and including protection and indemnity war risks in excess of the amount for war risks (hull) to the highest amount available in the market for the full value and tonnage of the Vessel, as approved in writing by the Mortgagee, and, in case of oil pollution liability risks, at the highest level of cover from time to time available under basic protection and indemnity clubs entry, currently One Billion United States Dollars ($1,000,000,000) covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Associations (and to strictly comply with all rules of such association as they are in effect);

(d)freight, demurrage and defense risks;

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(e)loss of hire in respect of any charter party agreement, with the minimum obtaining waiting period and a minimum cover of 90 days with an insured daily amount equal to at least (i) the daily rate under such charter party agreement or (ii) the daily running costs plus the daily debt service amount under the Credit Agreement;

(f)Mortgagee's interest  insurance  in  an  amount  not  less  than  one hundred twenty percent (120%) of the Facility and mortgagee's additional perils (pollution) insurance against the possible consequences of pollution involving the Vessel including, without limitation, expropriation or sequestration of the Vessel or the imposition of a Lien or encumbrances of any kind having priority to the security interest granted to the Mortgagee or claims against the Lenders to be subscribed by the Mortgagee and, on demand, reimburse  the Mortgagee for all premiums, costs and expenses paid or incurred by the Mortgagee from time to time;

(g)such other insurances as the Mortgagee may reasonably require (including without limitation political risks or mortgage rights insurance in the event that the Vessel is registered (or operated via a charter agreement fully and exclusively) in a jurisdiction  that is not an Approved Jurisdiction);

(ii)with respect to the Vessel, to effect the Insurances  aforesaid  or to cause or procure the same to be effected:

(a)in the cases of the Insurances referred to in sub-sections (i) (a) and (b) above, (x) in such amounts as shall be at least equivalent to the higher of

(I)the Fair Market Value (as such term is defined in the Credit Agreement) of the Vessel at the most recent date at which  such  Fair Market Value shall have been determined pursuant to the terms of the Credit Agreement and (II)  One Hundred Twenty percent (120%) of the total amount outstanding under the Facility (as such term is defined in the Credit Agreement), and all such insurance shall be payable in  lawful money of the United States of America, and (y) upon  such  terms (including provisions as to named insureds and loss payees  and  prior notice of cancellation) and with such deductibles as  shall  from  time to time be approved by the Mortgagee;

(b)in the case of the protection and indemnity Insurances referred to in sub­ section (i)(c) above payable in lawful money of the United States of America, to the full extent commercially available  and  to  include provisions as to loss payees and prior notice of cancellation in form and substance satisfactory to the Mortgagee; and

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(c)with first class insurance companies, underwriters and protection and indemnity associations or clubs with a rating from Standard & Poor's of at least BBB as shall from time to time be approved by the Mortgagee (hereinafter called the "Insurers");

(iii)(a) to renew all such Insurances or cause or procure the same to be renewed before the relevant policies or contracts expire and (b) to procure that the Insurers or the firm of insurance brokers referenced to herein below shall promptly confirm in writing to the Mortgagee at least fomieen (14) days prior to all insurance renewals;

(iv)to procure concun-ently with the execution hereof and thereafter  at intervals of not more than twelve (12) calendar months, a detailed report from  a firm  of independent marine insurance brokers, appointed by the Owner and acceptable to the Mortgagee, with respect to the Insurances together with their opinion to the Mortgagee that the Insurances comply with the provisions of this Section 5(B), such report and opinion to be addressed and  delivered promptly to the Mortgagee and the costs of such report and opinion to be for the account of the Owner;

(v)to cause the said independent marine insurance brokers or the Insurers to agree to use reasonable efforts to advise the Mortgagee promptly of any failure to renew any of the Insurances and of any default in payment of any premium and of any other act or omission on the part of the Owner of which they have knowledge and which might, in their opinion, invalidate or render unenforceable, or cause the lapse of or prevent the renewal or extension of, in whole or in part, any Insurances on the Vessel;

(vi)to cause the said independent marine insurance brokers to agree to mark their records and to use their best efforts to promptly advise the Mortgagee that such Insurances have been renewed or replaced with new insurance which complies with the provisions of this Section 5(B);

(vii)duly and punctually to pay or to cause duly and punctually to be paid all premiums, calls, contributions or other sums payable in respect of all such Insurances, to produce or to cause to be produced all relevant receipts when so required by the Mortgagee and duly and punctually to perform and observe or to cause duly and punctually to be performed and observed any other obligations and conditions under all such Insurances;

(viii)to execute or use reasonable efforts to cause to be executed such guarantees as may from time to time be required by any relevant protection and indemnity association or club;

(ix)to procure  that all policies, binders, cover notes or other instruments of the Insurances referenced to in subsections (i)(a) and (b) above shall be taken out in the name of the Owner, with the Mortgagee as an additional assured, the Owner to ensure that the Mortgagee is

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not liable for any premiums thereby, as its or their respective interests may appear, and shall incorporate a loss payable clause naming the Mortgagee as loss payee and first priority mo1igagee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and substance acceptable to the Mortgagee and all policies, binders, cover notes or other instruments referred to in subsection (i) shall provide (a) for prompt notice to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums as to the Mortgagee; provided, however, that unless otherwise required by the Mortgagee by notice to the underwriters, although all losses under such Insurances are payable to the Mortgagee, in case of any such losses involving any damage to the Vessel the underwriters may pay direct for the repair, salvage and other charges involved or, if the Owner shall have first fully repaired the damage or paid all of the salvage and other charges, may pay the Owner as reimbursement therefore,  provided, further, however, that if such damage involves a loss in excess of US$500,000,  or its equivalent, the underwriters shall not make such payment without first obtaining the written consent thereto of the Mortgagee and

(b) in the event that the Vessel shall be insured under any form of fleet cover, written unde1iakings that the brokers, underwriters, association or club (as the case may be) will not set off claims relating to the Vessel against premiums, calls or contributions in respect of any other vessel or other insurance and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance; the brokers shall also undertake in writing to issue a separate policy in respect of either or both Vessels if requested to do so by the Mortgagee;

(x)to procure that all entries, policies, binders, cover notes or other instruments of the Insurances referred to in sub-section (i)(c) above incorporate a loss payable clause naming the Mortgagee as loss payee and first priority mortgagee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and  substance acceptable to the Mortgagee and shall provide for prompt notice to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums, backcalls and assessments as to the Mortgagee, it being agreed that although such insurance is payable to the Mortgagee so long as no Event of Default has occurred and is continuing under this Mortgage, any loss payments under  any  such insurance  on  the Vessel may be paid directly to the Owner to reimburse it for any loss, damage or expenses incurred by it and covered by such insurance or to the Person to whom any liability covered by such insurance has been incurred;

(xi)to procure that originals or photocopies of all such instruments of Insurances as are referred to in sub-sections (ix) and (x) above shall be from time to time deposited with the Mortgagee after receipt by the Owner thereof and that the Insurers shall, if so requested by the M01igagee, furnish the Mortgagee with a letter or letters of undertaking in such form as may be reasonably required by the Mortgagee in respect of such Insurances;

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(xii)not to change any terms of any Insurances or suffer them to be changed, or change underwriters of any Insurances or suffer them to be changed, without the Mortgagee's prior written approval;

(xiii)not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of all policies, binders, cover notes or other instruments of the Insurances (including any  warranties express or implied therein) without first obtaining  the written consent of the Insurers to such employment (if required by such Insurers) and complying with such requirements as to extra premiums or otherwise as the Mortgagee and/or the Insurers may prescribe;

(xiv)to do all things necessary and proper, and execute and deliver all documents and instruments to enable the Mortgagee to collect or recover any moneys to become due the Mortgagee in respect of the Insurances; and

(xv)to obtain an assignment from any Person other than the Owner who is named as an assured or co-assured in any insurance policy covering a Vessel, such assignment to be made to the Mortgagee upon such terms and conditions as the Mortgagee may require.

(C)To keep and to cause the Vessel to be kept in a good and efficient state of repair so as to enable her to maintain her present class with its Classification Society and so as to enable her to qualify to navigate the routes presently permitted under, and subject to the existing conditions as are set forth in the current United States Coast Guard Certificates of Inspection covering the Vessel and so as to comply with the provisions of such Certification of Inspection, as well as all laws, regulations and other requirements (statutory or otherwise) from time to time applicable to a similar vessel of her age, type and trade registered under the flag of the United States of America, to procure that the Vessel's Classification Society make available to the Mortgagee, upon its request, such information and documents in respect of the Vessel as are maintained in the records of such Classification Society and to procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel;

(D)To submit or to cause the Vessel to be submitted on a timely basis to such periodic or other surveys as may be required for classification purposes and, if requested by the Mortgagee, to supply or to cause to be supplied to the Mortgagee copies of all survey  and inspection reports and confirmations of class issued in respect thereof;

(E)To permit the Mortgagee, by surveyors or other Persons appointed by it in its behalf, to board the Vessel at all reasonable times for the purpose of inspecting her condition or for the purpose of satisfying themselves in regard to proposed or executed  repairs  and compliance by the Owner with relevant covenants in the Transaction Documents and to afford or to cause to be afforded all proper facilities for such inspections, provided that such inspections will cause no undue delay to the Vessel;

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(F)(i) To pay  and discharge  or to cause to be paid and discharged all debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against the Vessel except to the extent permitted by Section 5(N) hereof and (ii) in event of arrest of the Vessel pursuant to legal process or in event  of her detention in exercise or purpo1ied exercise of any such lien as aforesaid to procure the release of the Vessel from such arrest or detention within fourteen (14) days of receiving notice thereof by providing bail or otherwise as the circumstances may require;

(G)Not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the laws of the United States of America or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation in a Prize Comi or to destruction, seizure or confiscation and in event of hostilities in any part of the world (whether war be declared or not), not to employ the Vessel or suffer her employment in carrying any contraband goods or to enter or trade to any zone which is declared a war zone by any government or by the Vessel's War Risks Insurers unless the required extra war risk insurance cover has been obtained for the Vessel;

(H)Promptly to furnish or to use its best efforts to cause promptly to be furnished to the Mortgagee all such information as the Mortgagee may  from  time  to  time  reasonably request regarding the Vessel, her employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever pertaining to the Vessel;

(I)Promptly after learning of the same to notify or cause to be notified the Mortgagee forthwith in writing of:

(i)any accident to the Vessel involving repairs the cost whereof will or is likely to exceed US$500,000 (or the equivalent in any other currency);

(ii)any occurrence in consequence whereof the Vessel has become or is likely to become a Total Loss;

(iii)any material requirement or recommendation made by any Insurer or Classification Society or by any competent authority which is not complied with in accordance with reasonable commercial practices;

(iv)any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel or her Earnings; and

(v)any occurrence of circumstances  forming the basis of an Environmental Claim.

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(J)To keep or to cause to be kept proper books of account of the Owner in respect of the Vessel and her Earnings and, if requested by the Mortgagee, to make or to cause to be made such books available for inspection on behalf of the Mortgagee and furnish or cause to be furnished satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crew's wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress;

(K)To   assign  and  provide   that   Requisition   Compensation   is  applied   111accordance with Section 8 hereof as if received in respect of the sale of  the Vessel;

(L)Not, without the previous consent in writing of the Mortgagee, to put  the Vessel or suffer her to be put into the possession of any Person for the purpose of work being done upon her other than routine drydockings and ordinary maintenance in an amount exceeding or likely to exceed US$500,000 (or the equivalent in any other currency) unless such work is fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or unless such Person shall first have given to the Mortgagee and on terms and conditions satisfactory to it a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of such work or otherwise;

(M)To keep the Vessel registered under the flag of the United States of America qualified to operate in the foreign trade of the United States of America and to do or suffer to be done nothing whereby such registration may be forfeited or imperiled;

(N)To keep and to cause the Vessel to be kept free and clear of all liens, charges, mortgages and encumbrances except in favor of the Mortgagee, and except for crew's wages remaining unpaid in accordance with reasonable commercial practices or for collision or salvage, liens in favor of suppliers of necessaries or other similar liens arising in the ordinary course of its business, accrued for not more than thirty (30) days or, if requested by the Mortgagee by written notice to the Owner to discharge such lien, not more than twenty one (21) days from the date of such written notice (unless any such lien is being contested in good faith  and by  appropriate proceedings or other acts and the Owner shall have set aside on its books adequate reserves with respect to such lien and so long as such deferment in payment shall not subject the Vessel to forfeiture or loss) or liens of loss, damage or expense  which are fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or in respect of which a bond or other security has been posted by or on behalf of the Owner with the appropriate court or other tribunal to prevent the anest or secure the release of the Vessel from arrest, and not, except in favor of the Mortgagee, to pledge, charge, assign or othe1wise encumber (in favor of any Person other than the Mortgagee) her Insurances, Earnings or Requisition Compensation or to suffer the creation of any such pledge, charge, assignment or encumbrance as aforesaid to or in favor of any Person other than the Mortgagee;

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(0) Not, without the previous consent in writing of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose), to sell (otherwise than on an arm's length basis provided that the proceeds of such sale are distributed in accordance with Section 5.3 of the Credit Agreement), abandon or otherwise dispose of the Vessel or any interest therein;

(P)To pay promptly to the Mortgagee all moneys  (including reasonable fees of counsel) whatsoever which the Mortgagee shall or may expend, be put to or become liable for, in or about the protection, maintenance or enforcement of the security created by this Mortgage or in or about the exercise by the Mortgagee of any of the powers vested in it hereunder and to pay interest thereon at the Default Rate from the date whereon such expense or liability was incurred by the Mortgagee;

(Q)To comply with all declaration and reporting requirements imposed by the protection and indemnity club or insurers including, without limitation, the quarterly declarations required by the U.S. Oil Pollution Section 2012191 , and to pay all premiums required to maintain in force the necessary U.S. Oil Pollution Cover;

(R)To comply with and satisfy all the requisites and formalities established by the laws of the United States of America to perfect this Mortgage as a legal, valid and enforceable first and preferred lien upon the Vessel and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the compliance by the Owner with the provisions of this Section 5(R);

(S)Not without the previous consent of the Mortgagee in writing, which consent shall not be unreasonably withheld, to enter into any charter party agreement with respect to the Vessel, other than an Approved Charter;

(T)To place or to cause to be placed and at all times and places to retain or to cause to be retained a properly certified copy of this Mortgage on board the Vessel with her papers and cause this Mortgage to be exhibited to any and all Persons having business with the Vessel which might give rise to any lien thereon other than liens for crew's wages and salvage, and to any representative of the Mortgagee on demand; and to place and keep or to cause to be placed and kept prominently displayed in the chart room and in the Master's cabin of the Vessel a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than six inches wide by nine inches high, reading as follows:

"NOTICE OF MORTGAGE

This Vessel  is owned by WATERMAN  STEAMSHIP  CORPORATION,  and is subject  to  a  first  preferred  mo1tgage  (the  "First  Mortgage")  in  favor  of  DVB BANK  SE,  as  security  trustee,  under  the  authority  of  the  United  States  Ship Mortgage  Act,  1920, as  amended  inter  alia,  by  Public  Law  100-710  (46  USC

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Section 30101 et seq.). Under the terms of the said First Mo1igage, neither the Owner nor any charterer nor the Master of this Vessel nor any other Person has any power, right or authority whatever to create, incur or permit to be imposed upon this Vessel any lien or encumbrance except as permitted thereunder."

6.Mortgagee's   Right   to  Cure.Without  prejudice  to  any  other  rights  of the Mortgagee hereunder:

(i)in the event that the provisions of Section 5(B) hereof or any of them shall not be complied with, the Mortgagee shall be at libe1iy, but not obligated, to effect and thereafter to replace, maintain and renew all such Insurances upon the Vessel as it in its sole discretion may deem advisable;

(ii)in the event that the provisions of Section 5(C) and/or 5(D) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to attune for the carrying out of such repairs and/or surveys  as  it deems expedient or necessary; and

(iii)in the event that the provisions of Section 5(F) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to pay and discharge all such debts, damages and liabilities as are therein  mentioned and/or to take any such measures as it deems expedient or necessary  for  the purpose of securing the release of the Vessel;

Any and all expenses incurred by the Mortgagee (including fees of counsel) in respect of its performances under the foregoing subsections  (i), (ii) and (iii) shall be paid by the Owner on demand, with interest thereon at the rate provided for in Section 5(P) hereof from the date when such expenses  were incurred by the Mortgagee.

7.Events of Default and Remedies.

(A)In case any one or more of the following events herein termed an "Event of Default" shall occur and shall not have been received:

(i)a default in the payment when due of all or any part of the Obligations;

(ii)an Event of Default stipulated in Section 8.1 of the Credit Agreement shall occur and be continuing;

(iii)a default by the Owner occurs in the due and punctual observance of any of the covenants contained in Section 5 of this Mortgage (other than those listed in clause (iv) below); or

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(iv)a default by the Owner occurs in the due and punctual observance of any of the covenants contained in subsections (A), (D), (E), (H), (J), or (P) of Section 5 of this Mortgage and such default continues unremedied for a period of ten (10) days; or

(v)it becomes impossible or unlawful for the Owner to fulfill any of the covenants and obligations contained in this Mortgage  and  the  Mortgagee considers that such impossibility or illegality will have a material adverse effect on its rights under this Mortgage or the enforcement thereof.

(B)If any Event of Default shall occur, the Mortgagee shall be entitled:

(i)to demand payment by written notice of the Obligations, whereupon such payment shall be immediately due and payable, anything contained in the Credit Agreement, the Note, this Mortgage, or any of the other Transaction Documents to the contrary notwithstanding and without prejudice to any other rights and remedies of the Mortgagee under the Credit Agreement, the Note, this Mortgage, or any of the other Transaction Documents, provided, however, that if, before any sale of the Vessel, all defaults shall have been remedied in a manner satisfactory to the Mortgagee, the Mortgagee may waive such defaults by written notice to the Owner; but no such waiver shall extend to or affect any  subsequent  or  other default or impair any rights and remedies consequent thereon;

(ii)at any time and as often as may be necessary to take any such action as the M01igagee may in its discretion deem advisable for the purpose of protecting the security created by this Mortgage and each and every expense or liability (including reasonable fees of counsel) so incurred by the Mortgagee in or about the protection of such security shall be repayable to it by the Owner promptly after demand, together with interest thereon at the Default Rate  from  the  date when such expense or liability was incurred by the Mortgagee. The Owner shall promptly execute and deliver to the Mortgagee such documents or cause promptly to be executed and delivered to the Mortgagee such documents, if any, and shall promptly do and perform such acts, if any, as in the opinion of the Mortgagee or its counsel may be necessary or advisable to facilitate or expedite the protection, maintenance and enforcement of the security created by this Mortgage;

(iii)to exercise all the rights and remedies in foreclosure and otherwise given to the Mortgagee by any applicable law, including those under the provisions of the Ship Mortgage Act;

(iv)to take possession of the Vessel, wherever the same may be, without prior demand  and without  legal process  (when permissible under  applicable law) and

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cause the Owner or other Person in possession thereof forthwith upon demand of the Mortgagee to surrender to the Mortgagee possession thereof as demanded by the Mortgagee;

(v)to require that all policies, contracts and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to such adjusters, brokers or other insurers as the Mortgagee may nominate;

(vi)to collect, recover, compromise and give  a good  discharge  for all claims then outstanding or thereafter arising under the Insurances or any of them and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion deems advisable and to permit the brokers through whom collection or recovery is effected to charge the usual brokerage therefore;

(vii)to discharge, compound, release or compromise claims against the Owner in respect of the Vessel which have given or may give rise to any charge or lien thereon or which are or may be enforceable by proceedings there against;

(viii)to take appropriate judicial proceedings for the foreclosure  of  this Mortgage and/or for the enforcement of the Mortgagee's rights hereunder or otherwise; recover judgment for any amount due in respect of the Credit Agreement, the Note, this Mortgage or any of the other Transaction Documents and collect the same out of any property of the Owner;

(ix)to sell the Vessel by private contract at any time, free from any claim of or by the Owner of any nature whatsoever;

(x)to sell the Vessel at public auction (with power for the Security Trustee to purchase the Vessel at any such public auction and to set off the purchase price against all or any part of the Obligations), free from any claim of or by the Owner of any nature whatsoever by first giving notice of the time and place of sale with a general description of the property in the following manner:

(a)by publishing such notice for ten (10) consecutive days m a  daily newspaper of general circulation published in New York City;

(b)if the place of sale should not be New York City, then also by publication of a similar notice in a daily newspaper, if any, published at the place of sale; and

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(c)by sending a similar notice by telecopy confirmed by registered mail to the Owner at its address hereinafter set forth at least fourteen (14) days prior to the date of sale.

Such sale of the Vessel may be held at such place as the Mortgagee in such notices may have specified, or such sale may be adjourned by  the Mortgagee from time to time by announcement at the time and place appointed for such sale or for such adjourned sale and without further notice or publication the Mortgagee may make such sale at the time and place to which the same shall  be so  adjourned; and such sale may  be conducted without bringing the Vessel to the place designated for such sale and in such manner as the Mortgagee  may deem to be for its best advantage, and the Mortgagee may become the purchaser at such sale.

(xi)pending sale of the Vessel (either directly or indirectly) to manage, charter, lease, insure, maintain and repair the Vessel and to employ or lay up the Vessel upon such terms, in such manner and for such period as the Mortgagee in its absolute discretion deems expedient and for the purpose aforesaid the Mortgagee shall be entitled to do all acts and things incidental or conducive thereto and in particular to enter into such arrangements respecting the Vessel, her insurance, management, maintenance,  repair,  classification  and employment  in all respects as if the Mortgagee were the owner of the Vessel and without being responsible for any loss thereby incurred;

(xii)to recover from the Owner on demand any such losses as may be incurred by the Mortgagee in or about the exercise of the powers vested in the Mortgagee under Section 7(B)(xi) above with interest thereon at the Default Rate from the date when such losses were incurred by the Mortgagee; and

(xiii)to recover from the Owner on demand all expenses, payments and disbursements (including fees and expenses of counsel) incurred  by  the Mortgagee in or about or incidental to the exercise by it of any of the powers vested in it hereunder together with interest thereon at the Default Rate from the date when such expenses, payments or disbursements were incurred by it;

PROVIDED, ALWAYS, that any sale of the Vessel or any interest therein by the Mortgagee pursuant to Section 7(B)(x) above shall operate to divest all right, title and interest of the Owner, its successors and assigns, in or to the Vessel so sold and upon such sale the purchaser shall not be bound to see or inquire whether the Mortgagee's power of sale has arisen in the manner herein provided and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefore.

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In case the Mortgagee shall have proceeded to enforce any right, power or remedy under this Mortgage by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Mortgagee, then and in every such case the Owner and the Mortgagee shall be restored to their former positions and rights hereunder with respect to the property, subject or intended to be subject to this Mo1igage, and all rights, remedies and powers of the Mortgagee shall continue as if no such proceedings had been taken.

(C)Notwithstanding the foregoing, it is understood that, other than Clause (c) of the definition of Total Loss, a Total Loss of the Vessel which is covered by the insurance maintained by the Owner pursuant to Section 5(B) hereof shall not be deemed to be a default under this Mortgage, the Credit Agreement, the Note, the other Security Documents, or any of them.

8.Application   of  Proceeds.    The  proceeds  of  any  sale made  either  under  the power of sale hereby granted to the Mortgagee or under  a judgment  or decree in any judicial proceedings for the foreclosure of this Mortgage or for the enforcement of any remedy granted to the Mortgagee hereunder, any net earnings arising from the management, charter or other use of the Vessel by the Mortgagee under any of the powers herein contained or by law provided and the proceeds of any and all Insurances and any claims for damages on account of the Vessel or the  Owner  of  any nature  whatsoever  and  any Requisition  Compensation,  shall  be  applied  as follows:

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First:	To the payment of all costs  and expenses (together with interest thereon as hereinbefore provided) incurred by the Mortgagee, the Agents and/or the Lenders, including the compensation of their respective agents and attorneys, by reason of any sale, retaking, management or operation of the Vessel and all other sums payable to the Mortgagee, the Agents and/or the Lenders hereunder by reason of any expenses or liabilities incurred or advances made by it for the protection, maintenance and enforcement of the security or of any of its rights hereunder or in the pursuit of any remedy hereby conferred; and at the option of the Mortgagee to the payment of all taxes, assessments or liens  claiming priority  over the lien of this Mortgage;
Second:	To the payment of the Obligations in the manner provided in the Credit Agreement; and
Third:	Any surplus thereafter remaining, to the Owner or to the Owner's successors in interest or assigns, or to whomsoever may be lawfully entitled to receive the same.

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In the event that the proceeds are insufficient to pay the amounts specified in paragraphs "First" and "Second" above, the Mortgagee shall be entitled to collect the balance from the Owner or any other Person liable therefore.

9.No Waiver. No delay or omission of the Mortgagee to exercise any right or power vested in it under the Credit Agreement, the Note, this Mortgage, the other Transaction Documents or any of them shall impair such right or power or be construed as a waiver thereof or as acquiescence in any  default by the Owner hereunder, nor shall the acceptance by the Mortgagee of any payments in connection with this M01igage from any source be deemed a waiver hereunder.  However, if at any time after an Event of Default and prior to the actual sale of the Vessel by the Mortgagee or prior to any foreclosure proceedings the Owner cures all Events of Default and pays all expenses, advances and damages to the Mortgagee consequent on such Events of Default, with interest at the Default Rate from the date when such expenses, advances and damages were incurred, then the Mortgagee may accept such cure and payment and restore the Owner to its  former position, but such action shall not affect any subsequent Event of Default or impair any rights consequent thereon.

10.Delegation   of  Power.   The M01igagee  shall be  entitled  at  any time and  as often as may be expedient to delegate all or any of the powers and discretions vested in it by this Mortgage (including the power vested in it by virtue of Section 12 hereof) in such manner  and upon such terms and  to  such Persons  as the  M01igagee  in its  absolute  discretion may  deem advisable.

11.Indemnity. Without prejudice to any other rights and remedies of the Mortgagee under the Credit Agreement, the Note, this Mortgage or any of the other Transaction Documents, the Owner hereby agrees and undertakes to indemnify the Mortgagee against all obligations and liabilities whatsoever and whensoever arising which the Mortgagee may incur in good faith in respect of, in relation to or in connection with the Vessel or otherwise howsoever in relation to or in connection with the enforcement of the Mortgagee's rights hereunder or under any of the other Transaction Documents to which the Owner is a party.

12.Power of Attorney.

(A)The Owner hereby irrevocably appoints the Mortgagee as its attorney-in-fact for the duration of the Security Period to do in its name or in the name of the Owner all acts which the Owner, or its successors or assigns, could do in relation to  the Vessel,  including without limitation,  to demand, collect, receive, compromise, settle and sue for (insofar as the Mortgagee lawfully may) all freights, hire, earnings, issues, revenues, income and profits of the Vessel, and all amounts due from underwriters under the Insurances as payment of losses or as

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return premiums or otherwise, salvage awards and recoveries, recoveries in general average or otherwise, and all other sums due or to become due to the Owner or in respect of the Vessel, and to make, give and execute in the name of the Owner, acquaintance, receipts, releases or other discharges for the same, whether under seal or otherwise, to take possession of, sell or otherwise dispose of or manage or employ, the Vessel, to execute and deliver charters and a bill of sale with respect to the Vessel, and to endorse and accept in the name of the Owner all checks, notes, drafts, warrants, agreements and all other instruments in writing with respect to the foregoing; PROVIDED, HOWEVER, that, unless the context otherwise permits under this Mortgage, such power shall not be exercisable by or on behalf of the Mortgagee unless and until any Event of Default shall occur and shall not be exercisable after all defaults have been cured.

(B)The exercise of the power granted in this Section 12 by or on behalf of the Mortgagee shall not require any Person dealing with the Mortgagee to conduct any inquiry as to whether any such Event of Default has occurred and is continuing, nor shall such Person be in any way affected by notice that any such Event of Default has not occurred nor is continuing, and the exercise by the Mortgagee of such power shall be conclusive evidence of its right to exercise the same.

13.Appointment of Receiver. If any legal proceedings shall be taken to enforce any right under this Mortgage, the M01igagee shall be entitled as a matter of right to the appointment of a receiver of the Vessel and of the freights, hire, earnings, issues,  revenues, income and profits due or to become due and arising from the operation thereof.

14.Commencement   of   Proceedings.    The  Mortgagee  shall  have  the  right  to commence  proceedings   in  the  courts  of  any  country  having  competent  jurisdiction   and  in particular  the Mortgagee  shall  have  the right  to  arrest  and  take  action  against  the Vessel  at whatever  place  the Vessel  shall  be  found  lying  and  for the purpose  of  any action  which  the Mortgagee may bring before the local court for the jurisdiction of such court or other judicial authority and the Owner agrees that for the purpose of proceedings  against the Vessel  any writ, notice, judgment  or  other  legal process  or  documents  may be  served upon  the  Master  of the Vessel (or upon anyone acting as the Master) and that such service shall be deemed good service on the Owner for all purposes.

15.Partial  Invalidity. In the event that any provision or provisions of this Mortgage shall be declared invalid, void or otherwise inoperative by any present or future court of competent jurisdiction in any country, the Owner will, without prejudice to any other right and remedy of the Mortgagee under the Credit Agreement, the Note, this Mortgage, the other Transaction Documents or any of them, execute and deliver such other and further instruments and do such things as in the opinion of the Mortgagee or its counsel will  be  necessary  or advisable to carry out the true intent and spirit of this Mortgage. In any event,  any  such declaration of partial invalidity shall not affect the validity of any other provision or provisions of this Mortgage, or the validity of this Mortgage as a whole.

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16.Cumulative Remedies. Each and every power and remedy in this Mortgage specifically given to the Mortgagee shall be in addition to every other power and remedy herein or in the Credit Agreement, the Note or the other Transaction Documents specifically given or now or hereafter existing at law, in equity, admiralty, or by statute, and each and every power and remedy whether specifically in this Mortgage or in the Credit Agreement, the Note or the other Transaction Documents given or otherwise existing may be exercised  from time to time and as often and in such order as may be deemed expedient by the Mortgagee, and the exercise or the beginning of the exercise of any such power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other power or remedy under the Credit Agreement, the Note, this Mortgage or any other Transaction Documents.

17.Recordation   of  Mortgage.  For  the purpose  of recording  this  First  Preferred Mortgage the total amount is Thirty Eight Million Five Hundred Thousand   ($38,500,000) Dollars (exclusive of  interest,  expenses  and  fees)  and  interest  and  performance  of mortgage covenants. The discharge  amount  is  the  same  as  the  total  amount  and  there  is  no  separate discharge  amount  for the Vessel.  It is not intended that this Mortgage  shall  include property other than the Vessel, and it shall not include property other than the Vessel as the term "vessel" is used in  Subsection  (c)(2)  of  Section  31322  of  Title  46  United  States  Code, as  amended. Notwithstanding the foregoing, for property other than the Vessel, if any should be determined to be covered by this Mortgage, the discharge amount is zero point zero one percent (0.01%) of the total amount.

18.No    Waiver    of    Preferred    Status.      Anything   herein   to   the   contrary notwithstanding, it ·is  intended  that  nothing  herein  shall  waive  the  preferred  status  of  this Mortgage  under  the  Ship  Mortgage  Act  or  under  the  corresponding  provisions  of  any other jurisdiction  in which  it is sought to be enforced  and that, if any provision  or  portion  thereof herein shall be construed to waive the preferred  status of this Mortgage, then  such provision to such extent shall be void and of no effect.

19.Counterparts. This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute but one and the same instrument.

20.Notices. Notices and other communications under this Mortgage shall be in writing and may be given by facsimile as follows:

If to the Owner:
	Waterman  Steamship Corporation
	11 North Water Street
	Suite 18290
	Mobile, Alabama 36602 Attention:
	Chief Financial Officer

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Facsimile No.:  (251) 243 9121

With a copy to:

International  Shipholding Corporation

One Whitehall  Street

New York, New York 10004

Attention: Niels M. Johnsen

Facsimile No.: (212) 514-5692

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If to the Mortgagee:
	DVB Bank SE Park House
	16-18 Finsbury Circus
	London EC2M 7EB, United Kingdom
	Attention:  Peter Attridge
	Department: Transaction and Loan Services
	Email: tls.london@dvbbank.com
	Fax:  +44 207 256 4352
	with a copy to:
	DVB TRANSPORT (US) LLC
	609 Fifth Avenue, 5th Floor
	New York, New York 10017, USA
	Facsimile: + 1 212 858 2664
	Attention:  Christoph Clauss
	Email:  christoph.clauss@dvbbank.com

or to such other address as either party shall from time to time specify in writing to the other. Any notice sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter.

Every notice or other communication shall, except so far as otherwise expressly provided by this Mortgage, be deemed to have been received (provided that it is received prior to 10 a.m. New York time; otherwise it shall be deemed to have been received on  the  next following Banking Day), in the case of a facsimile at the time of dispatch thereof (provided further that if the date of dispatch is not a Banking Day in the locality of the party to whom such notice or demand is sent it shall be deemed to have been received on the next following Banking Day in such locality), and in the case of a letter, at the time of receipt thereof.

21.Rights of Owner. Unless one or more Events of Default shall have occurred and be continuing, the Owner (a) shall be suffered and permitted to retain actual possession and

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use of the Vessel and  (b) shall have the right, from time to time in its discretion, and without application to the Mortgagee, and without obtaining a release thereof by the  Mortgagee,  to dispose of, free from the lien hereof, any boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any other appurtenances of the Vessel that are no longer useful, necessary, profitable or advantageous in the operation of the Vessel, first or simultaneously replacing the same by new boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any other appurtenances of substantially equal value to the Owner, which shall forthwith become subject to the lien of this Mortgage.

22.Waiver; Amendment. None of the tern1s and conditions of this  Mortgage may be changed, waived, modified or varied in any manner whatsoever unless in writing  duly signed by the Owner and the Mortgagee.

23.Successors   and   Assigns.     All  the  covenants,  promises,   stipulations   and agreements of the Owner and all the rights and remedies  of the Mortgagee  contained  in  this Mortgage shall bind the Owner, its successors and assigns, and shall inure to the benefit of the Mortgagee, its successors and assigns, whether so expressed or not.

24.Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the United  States of America.

25.Headings. In this Mortgage, section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage.

[Signature Page to Follow]

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IN WITNESS WHEREOF, the Owner has executed this M01igage by its duly authorized representative as of the day and year first above written.

WATERMAN  STEAMSHIP CORPORATION

By:

Name:

Title:

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ACKNOWLEDGMENT   OF MORTGAGE

STATE OF ALBAMA)
	: ss:
COUNTY OF MOBILE)

On  this  _ day  of, 2014, before me personally appeared

, to me known, who, being by me duly sworn, did depose and say that he  resides   at;  that  he  is  theof Waterman Steamship Corporation; and that he signed his name thereto pursuant to authority granted to him by the Board of Directors of Waterman Steamship Corporation.

Notary Public

Exhibit A

Credit Agreement

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Exhibit B

Note

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EXHIBIT G-2

FIRST PREFERRED  MORTGAGE

GRANTED IN CONTINUATION OF A PRIOR RECORDED MORTGAGE

on the

Marshall Islands Flag Vessel GREEN BAY

LCI SHIPHOLDINGS,  INC.,

as Owner TO

DVB BANK SE,

as Mortgagee

Dated as of, 2014

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THIS  FIRST  PREFERRED  MORTGAGE   GRANTED  IN  CONTINUATION   OF  APRIOR RECORDED MORTGAGE (this "M01igage") is made and given as of the             day of, 2014 by LCI SHIPHOLDINGS, INC., a corporation existing under the laws of the Republic of the Marshall Islands, with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the "Owner") in favor of DVB BANK SE, a banking corporation organized under the laws of the Federal Republic of Germany ("DVB")' with offices at Platz der Republik 6, D-60325 Frankfurt am Main, Germany, as security trustee (hereinafter, in such capacity, called  the "Mortgagee")  for the  Lenders  (as such term is defined in the Credit Agreement (as hereinafter defined)), pursuant to the terms of the Credit Agreement.

WHEREAS:

A.The Owner is the sole owner  of the whole of the vessel GREEN  BAY Official No. 9339818, of 59,217 gross tons, 17775 net tons, built in 2007 (the "Vessel"); and registered and documented in the name of the Owner under the laws and flag of the Republic of the Marshall Islands.

B.Pursuant to  a credit agreement dated as of July , 2014 (the "Credit Agreement'', a copy of the form of the Credit Agreement, without schedules or exhibits other than Schedule I is annexed hereto as Exhibit A), made by and among (1) WATERMAN STEAMSHIP CORPORATION ("Waterman"), as b01Tower, (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) the banks and financial institutions listed on Schedule I thereto, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section  12 of the Credit Agreement,  the "Lenders" and each a "Lender"),

(4) DVB, as facility agent for the Lenders, (in such capacity, the  "Facility  Agent")  and  as security trustee for the Lenders (in such capacity, the "Security Trustee") and (5) DVB, as mandated lead manager, the Security Trustee has agreed to  serve  in  such  capacity  under  the Credit Agreement and the Lenders have provided to Waterman a secured  term  loan  in  the amount of up to Thirty Eight Million Five Hundred Thousand Dollars ($38,500,000) (the "Loan"). The obligation of Waterman to repay the Loan under the Credit ,Agreement is evidenced by a promissory  note  dated  July  , 2014,  from  Waterman,  to  the order  of the Facility Agent (the "Note"), a copy of the form of the Note being attached hereto as Exhibit B. The Loan, and interest, fees and commissions thereon are to be repaid or paid, as the case may be, as provided in the Credit Agreement. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meaning when used herein.

C.Pursuant to Section 17 of the Credit Agreement, the Lenders have appointed the Mortgagee as facility agent and security trustee on their behalf with regard to, inter alia, the security convened on such Lenders pursuant to the terms of the Credit Agreement, the Note and the Transaction Documents.

D.The Vessel was previously registered and documented in the name of Waterman under the laws and flag of the United States of America with  Official  Number 9339818 and was subject to a First Preferred United States Mortgage dated July , 2014 and recorded on July  , 2014  at the National  Vessel  Documentation  Center  (the "NVDC") in Falling Waters,  West Virginia,  at  [............] [A][P].M. E.D.S.T.  (the "Prior Mortgage",  a copy

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of which is attached hereto as Exhibit C). The principal amount of the obligations secured by the Prior Mortgage was Thirty Eight Million Five Hundred Thousand Dollars (exclusive of interest, expenses and fees) and interest and performance of mortgage covenants.

E.Pursuant to the Prior Mortgage, the priority of the lien of the Prior Mortgage, being July        , 2014, at [.......] [A][P).M., E.D.S.T., was continued.

F.Pursuant to te1ms of the Credit Agreement, the Mortgagee consented  to the deletion of the Vessel from the NVDC, the sale of the Vessel by Waterman, as seller, to the Owner, as purchaser, pursuant to that certain bill of sale dated [], the replacement of the Owner as substitute borrower under the Credit Agreement, and to the registration of the Vessel under the laws and the flag of the Republic of the Marshall Islands. The Owner executes and records this Mortgage over the Vessel for the purpose of securing the Obligations of the Owner as borrower under the Credit Agreement in continuation of the Prior Mortgage, and with a preferred status as of July , 2014, as provided under Section 303(2) of Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands.

G.The Owner, in order to secure the payment of the Obligations, as that term is defined in subsection 1(A)(iv) hereof, and to secure the performance and observance of and compliance with all the covenants,  terms and conditions in the Credit Agreement and  in this Mortgage contained, expressed or implied, to be performed, observed and complied with by and on the part of the Owner, has duly authorized the execution and delivery of this First Perfected Mortgage under and pursuant to the Maritime Law.

N O W,  T H E R E F O R E,  T H I S  M O R T G A G E W I T N E S S E T H

1.Definitions:   In this Mortgage, unless the context otherwise requires:

(A)(i)"Classification Society" when used herein shall have the same meaning as in the Credit Agreement;

(ii)"Earnings"  includes  all  moneys  whatsoever  which  are  now,  or  later become, payable (actually or contingently) to the Owner or the Security Trustee (net of charter commissions payable in respect of the Vessel) and which arise out of the use or operation of the Vessel, including (but not limited to): (a) except to the extent that they fall within paragraph (b) (1) of requisition  of the Vessel  for hire,  (3) remuneration  for salvage  and towage services, (4) demurrage and detention moneys,  (5) damages for breach  (or payments  for variation or termination)  of any charter party or other contract for the employment of the Vessel, (6) all moneys which are at any time payable under Insurances in respect of loss of hire and, (b) if and whenever, with the consent of the Mortgagee, the Vessel is employed

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on terms whereby any moneys falling within (1) to (6) above are pooled or shared with any other Person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel;

(iii)"Insurances" includes all policies and contracts of insurance and all entries of the Vessel in a protection and indemnity or war risks association or club which are from time to time taken out or entered into pursuant to this Mortgage in respect of the Vessel and its Earnings or otherwise howsoever in connection with the Vessel;

(iv)"Maritime Law" means Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands;

(v)"Obligations" means the obligations of the Owner or the Guarantor under or in connection with the Credit Agreement, the Note, this Mortgage, any other Security Document and any Transaction Documents, including but not limited to the obligations to repay the Loan when due;

(vi)"Person" when used herein shall have the same meaning as in the Credit Agreement;

(vii)"Requisition Compensation" means all moneys or other compensation payable and belonging to the Owner during the Security Period by reason of requisition for title or other compulsory acquisition of the Vessel or otherwise than by requisition for hire;

(viii)"Security Documents" when used herein shall have the same meaning as in the Credit Agreement;

(ix)"Security Period" means the period commencing on the date hereof and terminating upon discharge of the security created by this Mortgage by indefeasible payment in full of all of the Obligations;

(ix)"Total Loss" means:

(a)actual, constructive or compromised or arranged total loss of the Vessel;

(b)requisition for title or other compulsory acquisition of the Vessel (otherwise than by requisition for hire) which shall continue for fourteen (14) days; or

(c)capture, seizure, arrest, detention or confiscation of the Vessel by any government or by Persons acting or purporting to act on behalf of any government unless the Vessel be released and restored to the   Owner   from   such   capture,   seizure,   arrest,   detention   or

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confiscation within fourteen (14) days after the occurrence thereof; and

(x)"Vessel" means the whole of the vessel described in Recital A hereof and includes its engines, machinery, boats, boilers, masts, rigging, anchors, chains, cables, apparel, tackle, outfit, spare gear, fuel, consumable or other stores, freights, belongings and appurtenances, whether  on  board  or ashore, whether now owned or hereafter acquired, and all additions, improvements and replacements hereafter made in or to said vessel, or any part thereof, or in or to the stores, belongings and appurtenances aforesaid except such equipment or stores which, when placed aboard said vessel, do not become the property of the Owner.

(B)In Section 5(B) hereof:

(i)"excess risks" means the proportion of claims for general average and salvage charges and under the ordinary running-down clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value;

(ii)"protection and indemnity risks" means the usual risks covered by  a United States or an English or another protection  and  indemnity association or club acceptable to the Mortgagee including the proportion not recoverable in case of collision under the ordinary running-down clause; and

(iii)"war risks" means the risk of mines and all risks excluded from the standard form of United States marine policy by the War, Strikes and Related Exclusion Clause.

(C)This Mortgage shall be read together with the Credit Agreement but in case of any conflict between the two, the provisions of the Credit Agreement shall prevail.

2.Grant of Mortgage; Representations  and Warranties.

2.1In consideration of the premises and of other good and valuable consideration, the receipt and adequacy whereof are hereby acknowledged, and in order to secure the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in the Credit Agreement, the Note, this Mortgage, the other Security Documents and the other Transaction Documents contained, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage to and in favor of the Mortgagee, its successors and assigns, the whole of the Vessel TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns, forever, upon the terms set forth in this Mortgage for the enforcement of the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in this

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Mortgage,  the  Credit  Agreement,  the  Note,  the  other  Security  Documents   and  the  other Transaction Documents contained;

PROVIDED, ONLY, and the conditions of these presents are such that, if the Owner and/or its successors or assigns shall pay or cause to be paid to the Lenders,  their respective successors and assigns, the Obligations as and when the same shall become due and payable in accordance with the terms of this Mo1igage, the Credit Agreement, the Note and the other Transaction Documents and shall perform, observe and comply with all and singular of the covenants, terms and conditions in this Mortgage, the Credit Agreement, the Note and the other Transaction Documents contained, expressed or implied, to be performed, observed or complied with by and on the part of the Owner or its successors or assigns, all without delay or fraud and according to the true intent and meaning hereof and thereof, then, these presents and the rights of the Mortgagee under this Mortgage shall cease and determine and, in such event, the Mortgagee agrees by accepting this Mortgage, at the expense of the Owner, to execute all such documents as the Owner may reasonably require to discharge this Mortgage under  the laws  of the United States of America; otherwise to be and remain in full force and effect.

2.2The Owner hereby represents and warrants to the Mortgagee that:

(A)the Owner is a corporation duly domesticated, validly existing and in good standing under the laws of the Republic of the Marshall Islands qualified to own and register the Vessel under the Marshall Islands flag;

(B)the Owner lawfully owns the whole of the Vessel free from any security interest, debt, lien, mortgage, charge, encumbrance or other adverse interest, other than the encumbrance of this Mortgage and except as permitted by Section 5(N) hereof; and

(C)the Vessel is tight, staunch and strong and well and sufficiently tackled, appareled, furnished and equipped and in all respects seaworthy.

2.3This Mortgage is granted in continuation of the Prior Mortgage within the meaning of Section 303(2) of Chapter 3 of the Maritime Act 1990 of the Republic  of  the Marshall Islands and upon recordation this Mortgage in accordance with the  provisions  of Section 303(2) of Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands shall have preferred  status as of July       , 2014.   Notwithstanding  anything to the contrary in this Mortgage, it is not intended that any provision of this Mortgage shall waive the preferred status of this Mortgage and that if any provision or part thereof in this Mortgage shall  be construed as waiving the preferred status of this Mortgage, then such provisions shall to such extent be void and of no effect.

3.Payment of Obligations. The Owner hereby further covenants and agrees to pay the Obligations when due to the Mortgagee or its successors or assigns.

that:

4.Covenants Regarding Security Granted Hereunder.  It is declared and agreed

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(A)The security created by this Mortgage  shall be held by the Mortgagee as a continuing security for the payment of the Obligations and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of  the  amount  hereby secured.

(B)Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee or the Lenders, related to or which reduces the obligations secured hereby, by the Owner or any other Person being avoided or set-aside or ordered  to be refunded or reduced by vi1iue of any provision or enactment relating to bankruptcy, insolvency or liquidation for the time being in force, and if such condition is not satisfied, the M01igagee shall be entitled to recover from the Owner on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred.

(C)The rights of the M01igagee under this Mortgage and the security hereby constituted shall not be affected by any act, omission, matter or thing which, but for  this provision, might operate to impair, affect or discharge such rights and security, including without limitation, and whether or not known to or discoverable by the Owner, the Mortgagee or any other Person:

(i)any time or waiver granted to, or composition with, the Owner or any other Person; or

(ii)the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies  or securities against the Owner or any other Person; or

(iii)any legal limitation, disability, dissolution, incapacity or other circumstances relating to the Owner or any other Person; or

(iv)any amendment or supplement to the Credit Agreement, the Note, any of the Security Documents or the other Transaction Documents; or

(v)the unenforceability, invalidity or frustration of any obligations of the Owner or any other Person under the Credit Agreement, the Note, any of the Security Documents or the other Transaction Documents.

(D)The Owner acknowledges and agrees that it has not received any security from any Person for the granting of this Mortgage and it will not take any such security without the prior written consent of the Mortgagee, and the Owner will hold any security taken in breach of this provision in trust for the Mortgagee.

(E)Until the Obligations have been unconditionally and irrevocably paid and discharged in full to the satisfaction of the Mortgagee, the Owner shall not by virtue of any payment  made  under  the  Credit  Agreement,  the  Note  or  this  Mortgage  on  account  of  such

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moneys and liabilities or by virtue of any enforcement by the Mortgagee of its right under or the security constituted by this Mortgage:

(i)be entitled to exercise any right of contribution from any co-surety liable in respect of such moneys and liabilities under any other guarantee, security or agreement; or

(ii)exercise any right of set-off or counterclaim against any such co­ surety; or

(iii)receive, claim or have the benefit of any payment, distribution, security or indemnity from any such co-surety; or

(iv)unless so directed by the Mortgagee (which the Owner shall prove in accordance with such directions), claim as a creditor of any such co-surety in competition with the Mortgagee.

The Owner shall hold in trust for the Mortgagee and forthwith pay or transfer (as appropriate) to the Mortgagee any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.

(F)The Owner hereby irrevocably subordinates all of its rights of subrogation (whether contractual, statutory, under common law or otherwise) to the claims of the Mortgagee against any Person and all contractual, statutory or common law rights of contribution, reimbursement indemnification and similar rights and claims against any Person which arise in connection with, or as a result of, the Credit Agreement or this Mortgage until full and final payment of all of the Obligations.

5.Affirmative Covenants and Insurances. The Owner further covenants with the Mortgagee and undertakes at all times throughout the Security Period:

(A)to maintain its existence as a corporation under the laws of the Republic of the Marshall Islands;

(B)(i) To insure and keep the Vessel insured or cause or procure the Vessel to be insured and to be kept insured at no expense to the Mortgagee (or to reimburse the Mortgagee therefore (including  with regard to the insurance cover described in (f) below), using brokers, insurance companies, underwriters and/or War Risk/P&I Associations and on such terms as the Mortgagee shall from time to time approve in writing, in regard to:

(a)hull and machinery plus freight interest and hull interest and  any other usual marine risks (such as excess risks);

(b)war risks (including war protection and indemnity liability with a separate limit not less than hull value and including the London blocking and trapping addendum or similar arrangement)  covering, inter alia, the perils

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of confiscation, terrorism, expropriation, nationalization, seizure and blocking;

(c)protection and indemnity risks (including pollution risks and including protection and indemnity war risks in excess of the amount for war risks (hull) to the highest amount available in the market for the full value and tonnage of the Vessel, as approved in writing by the Mortgagee, and, in case of oil pollution liability risks, at the highest level of cover from time to time available under basic protection and indemnity clubs entry, currently One Billion United States Dollars ($1,000,000,000) covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Associations (and to strictly comply with all rules of such association as they are in effect);

(d)freight, demurrage and defense risks;

(e)loss of hire in respect of any charter party agreement, with the minimum obtaining waiting period and a minimum cover of 90 days with an insured daily amount equal to at least (i) the daily rate under such charter party agreement or (ii) the daily running costs plus the daily debt service amount under the Credit Agreement;

(f)Mortgagee's interest insurance in an amount not less than one hundred twenty percent (120%) of the Facility and mortgagee's additional perils (pollution) insurance against the possible consequences of pollution involving the Vessel including, without limitation, expropriation or sequestration of the Vessel or the imposition of a Lien or encumbrances of any kind having priority to the security interest granted to the Mortgagee or claims against the Lenders to be subscribed by the Mortgagee and, on demand, reimburse the Mortgagee for all premiums, costs and  expenses paid or incurred by the Mortgagee from time to time;

(g)such other insurances as the Mortgagee may reasonably require (including without limitation political risks or mortgage rights insurance in the event that the Vessel is registered (or operated via a charter agreement fully and exclusively) in a jurisdiction  that is not an Approved Jurisdiction);

(ii)with respect to the Vessel, to effect the Insurances  aforesaid  or to  cause or procure the same to be effected:

(a)in the cases of the Insurances referred to in sub-sections (i) (a) and (b) above, (x) in such amounts as shall be at least equivalent to the higher of

(I)the Fair Market Value (as such term is defined in the  Credit Agreement) of the Vessel at the most recent date at which  such  Fair Market Value shall have been determined pursuant to the  terms  of  the Credit Agreement  and 

(II)  One Hundred  Twenty percent  (120%)  of the

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total amount outstanding under the Facility (as such term is defined in the Credit Agreement), and all such insurance shall be payable in  lawful money of the United States of America, and (y) upon such terms (including provisions as to named insureds and loss payees  and  prior notice of cancellation) and with such deductibles as shall  from time to time be approved by the Mortgagee;

(b)in the case of the protection and indemnity Insurances referred to in sub­ section (i)(c) above payable in lawful money of the United States of America, to the full extent commercially available  and  to  include provisions as to loss payees  and prior notice of cancellation in form and substance satisfactory to the Mortgagee; and

(c)with first class insurance companies, underwriters and protection and indemnity associations or clubs with a rating from Standard &  Poor's of at least BBB as shall from time to time be approved by the Mortgagee (hereinafter called the "Insurers");

(iii)(a) to renew all such Insurances or cause or procure the same to be renewed before the relevant policies or contracts expire and (b) to procure that the Insurers or the firm of insurance brokers referred to herein below shall promptly confirm in writing to the Mortgagee at least fourteen (14) days prior to all insurance renewals;

(iv)to procure concurrently with the execution hereof and thereafter at intervals of not more than twelve (12) calendar months, a detailed report from a firm of independent marine insurance brokers, appointed by the Owner and acceptable to the Mortgagee, with respect to the Insurances together with their opinion to the Mortgagee that the Insurances comply with the provisions of this Section 5(B), such report and opinion to be addressed and delivered promptly to the Mortgagee and the costs of such repo1i and opinion to be for the account of the Owner;

(v)to cause the said independent marine insurance brokers or the Insurers to agree to use reasonable efforts to advise the Mortgagee promptly of any failure to renew  any of the Insurances and of any default in payment of any premium and of any other act or omission on the part of the Owner of which they have knowledge and which might, in their opinion, invalidate or render unenforceable, or cause the lapse of or prevent the renewal or extension of, in whole or in part, any Insurances on the Vessel;

(vi)to cause the said independent marine insurance brokers to agree to mark their records and to use their best efforts to promptly advise the Mortgagee that such Insurances have been renewed or replaced with new insurance which complies with the provisions of this Section 5(B);

(vii)duly and punctually to pay or to cause duly and punctually to be paid all premiums, calls, contributions or other sums payable in respect of all such Insurances, to produce or to cause to be produced all relevant receipts when so required by the Mortgagee and duly and

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punctually to perfom1and observe or to cause duly and punctually to be performed and observed any other obligations and conditions under all such Insurances;

(viii)to execute or use reasonable efforts to cause to be executed such guarantees as may from time to time be required by any relevant protection and indemnity association or club;

(ix)to procure that all policies,  binders, cover notes or other instruments of the Insurances referred to in subsections (i)(a) and (b) above shall be taken out in the name of the Owner, with the Mortgagee as an additional assured, the Owner to ensure that the Mortgagee is not liable for any premiums thereby, as its or their respective interests  may appear, and shall incorporate a loss payable clause naming the Mortgagee as loss payee and first priority mortgagee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and substance acceptable to the Mortgagee and all policies, binders, cover notes or other instruments referred to in subsection (i) shall provide (a) for prompt notice to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums as to the Mortgagee; provided, however, that unless otherwise required by the M01tgagee by notice to the underwriters, although all losses under such Insurances are payable to the Mortgagee, in case of any such losses involving any damage to the Vessel the underwriters may pay direct for the repair, salvage and other charges involved or, if the Owner shall have first fully repaired the damage or paid all of the salvage and other charges, may pay the Owner as reimbursement therefore, provided, further, however, that if such damage involves a loss in excess of US$500,000, or its equivalent, the underwriters shall not make such payment without first obtaining the written consent thereto of the Mortgagee and

(b) in the event that the Vessel shall be insured under any form of fleet cover, written undertakings that the brokers, underwriters, association or club (as the case may be) will not set off claims relating to the Vessel against premiums, calls or contributions in respect of any other vessel or other insurance and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance; the brokers shall also undertake in writing to issue a separate policy in respect  of either or both Vessels if requested to do so by the Mortgagee;

(x)to procure that all entries, policies, binders, cover notes or other instruments of the Insurances referred to in sub-section (i)(c) above incorporate  a loss payable  clause naming the Mortgagee as loss payee and first priority mortgagee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and  substance acceptable to the Mortgagee and shall provide for prompt notice to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of  liability for payment of premiums, backcalls and assessments as to the Mortgagee, it being agreed that although such insurance is payable to the M01tgagee so long as no Event of Default has occurred and is continuing under this Mortgage, any  loss payments under  any  such  insurance  on  the Vessel may be paid directly to the Owner to reimburse it for any loss, damage  or  expenses incurred by it and covered by such insurance or to the Person to whom any liability covered by such insurance has been incurred;

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(xi)to procure that originals or photocopies of all such instruments of Insurances as are referred to in sub-sections (ix) and (x) above shall be from time to time deposited with the Mortgagee after receipt by the Owner thereof and that the Insurers shall, if so requested by the M01igagee, furnish the Mortgagee with a letter or letters of undertaking in such form as may be reasonably required by the Mortgagee in respect of such Insurances;

(xii)not to change any terms of any Insurances or suffer them to be changed, or change underwriters of any Insurances or suffer them to be changed, without the Mortgagee's prior written approval;

(xiii)not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of all policies, binders, cover notes or other  instruments of the Insurances (including any warranties express or implied therein) without first  obtaining  the written consent of the Insurers to such employment (if required by such Insurers) and complying with such requirements as to extra premiums or otherwise as the Mortgagee and/or the Insurers may prescribe;

(xiv)to do all things necessary and proper, and execute and deliver all documents and instruments  to enable the Mortgagee to collect or recover any moneys to become due the M01igagee in respect of the Insurances; and

(xv)to obtain an assignment from any Person other than the Owner who is named as an assured or co-assured in any insurance policy covering a Vessel, such assignment to be made to the Mortgagee upon such terms and conditions as the Mortgagee may require.

(C)To keep and to cause to be kept the Vessel in a good and efficient state of repair so as to maintain her present class with its Classification Society and so as to comply with the provisions of all laws, regulations and requirements (statutory  or otherwise) from time to time applicable to vessels registered under the laws of the Republic of the Marshall Islands, to procure that the Vessel 's Classification Society make available to the Mortgagee, upon  its request, such information and documents in respect of the Vessel as are maintained in the records of such Classification Society, and to procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel;

(D)To submit or to cause the Vessel to be submitted on a timely basis to such periodic or other surveys as may be required for classification purposes and, if requested by the Mortgagee, to supply or to cause to be supplied to the  M01igagee copies of all survey  and inspection reports and confirmations of class issued in respect thereof;

(E)To permit the Mortgagee, by surveyors or other Persons appointed by it in its behalf, to board the Vessel at all reasonable times for the purpose of inspecting her condition or for the purpose of satisfying themselves in regard to proposed or executed repairs and compliance by the Owner with relevant covenants in the Transaction Documents and to afford or to cause to

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be afforded all proper facilities for such inspections, provided that such inspections will cause no undue delay to the Vessel;

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(F)(i) To pay and discharge or to cause to be paid and discharged all  debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against the Vessel except to the extent permitted by Section 5(N) hereof and (ii) in event of arrest of the  Vessel pursuant to legal process or in event of her detention in exercise or purported exercise of any such lien as aforesaid to procure the release of the Vessel from such arrest or detention within fourteen (14) days of receiving notice thereof by providing bail or otherwise as the circumstances may require;

(G)Not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the laws of the Republic of the Marshall Islands or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation in a Prize Court or to destruction, seizure or confiscation and in event of hostilities in any part of the world (whether war be declared or not), not to employ the Vessel or suffer her employment in carrying any contraband goods or to enter or trade to any zone which is declared a war zone by any government or by the Vessel's War Risks Insurers unless the required extra war risk insurance cover has been obtained for the Vessel;

(H)Promptly to furnish or to use its best efforts to cause promptly to be furnished to the Mortgagee all such information as the Mortgagee may from  time  to  time  reasonably request regarding the Vessel, her employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever pertaining to the Vessel;

(I)Promptly after learning of the same to notify or cause to be  notified the Mortgagee forthwith in writing of:

(i)any accident to the Vessel involving repairs the cost whereof will or is likely to exceed US$500,000 (or the equivalent in any other currency);

(ii)any occurrence in consequence whereof the Vessel has become or is likely to become a Total Loss;

(iii)any material requirement or recommendation made by any Insurer or Classification Society or by any competent authority which is not complied with in accordance with reasonable commercial practices;

(iv)any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel or her Earnings; and

(v)any occurrence of circumstances forming the basis of an Environmental Claim.

(J)To keep or to cause to be kept proper books of account of the Owner in respect of the Vessel and her Earnings and, if requested by the Mortgagee, to make or to cause to be made such books available for inspection on behalf of the Mortgagee and furnish or cause to

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be furnished satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crew's wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress;

(K)To assign and provide that Requisition Compensation is applied m accordance with Section 8 hereof as if received in respect of the sale of  the Vessel;

(L)Not, without the previous consent in writing of the Mortgagee, to put the Vessel or suffer her to be put into the possession of any Person for the purpose of work being done upon her other than routine drydockings and ordinary maintenance in an amount exceeding or likely to exceed US$500,000 (or the equivalent in any other currency) unless such work is fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or unless such Person shall first have given to the M01igagee and on terms and conditions satisfactory to it a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of such work or otherwise;

(M)To keep the Vessel registered under the flag of the Republic of the Marshall Islands and to do or suffer to be done nothing whereby such registration may be forfeited or imperiled;

(N)To keep and to cause the Vessel to be kept free and clear of all liens, charges, mortgages and encumbrances except in favor of the Mortgagee, and except for crew's wages remaining unpaid in accordance with reasonable commercial practices or for collision or salvage, liens in favor of suppliers of necessaries or other similar liens arising in the ordinary course of its business, accrued for not more than thirty (30) days or, if requested by the Mortgagee by written notice to the Owner to discharge such lien, not more than twenty one (21) days from the date of such written notice (unless any such lien is being contested in good faith and by appropriate proceedings or other acts and the Owner shall have set aside on its books adequate reserves with respect to such lien and so long as such deferment in payment shall not subject the Vessel to forfeiture or loss) or liens for loss, damage or expense which are fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or in respect of which a bond or other security has been posted by or on behalf of the Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of the Vessel from arrest, and not, except in favor of the Mortgagee, to pledge, charge, assign or otherwise encumber (in favor of any Person other than the Mortgagee) her Insurances, Earnings or Requisition Compensation or to suffer the creation of any such pledge, charge, assignment or encumbrance  as aforesaid to or in favor of any Person other than the Mortgagee;

(0)  Not, without the previous consent in writing of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose), to sell (otherwise than on an arm's length basis provided that the proceeds of such sale are distributed in accordance with Section 5.3 of the Credit Agreement), abandon or otherwise dispose of the Vessel or any interest therein;

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(P)To pay promptly to the Mortgagee all moneys (including reasonable  fees of counsel) whatsoever which the Mortgagee shall or may expend, be put to or become liable for, in or about the protection, maintenance or enforcement of the security created by this Mortgage or in or about the exercise by the Mortgagee of any of the powers vested in it hereunder and to pay interest thereon at the Default Rate from the date whereon such expense or liability was incurred by the Mortgagee;

(Q)To comply with all declaration and reporting requirements imposed by the protection and indemnity club or insurers including, without limitation, the quarterly declarations required by the U.S. Oil Pollution Section 20/2/91, and to pay all premiums required to maintain in force the necessary U.S. Oil Pollution Cover;

(R)To comply with and satisfy all the requisites and formalities established by the laws of the Republic of the Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first and preferred lien upon the Vessel and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the compliance by the Owner with the provisions of this Section 5(R);

(S)Not without the previous consent of the Mortgagee in writing, which consent shall not be unreasonably withheld, to enter into any charter party agreement with respect to the Vessel, other than an Approved Charter;

(T)To place or to cause to be placed and at all times and places to retain or to cause to be retained a properly certified copy of this Mortgage on board the Vessel with her papers and cause this Mortgage to be exhibited to any and all Persons having business with the Vessel which might give rise to any lien thereon other than liens for crew's wages and salvage, and to any representative of the Mortgagee on demand; and to place and keep or to cause to be placed and kept prominently displayed in the chart room and in the Master's cabin of the Vessel a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than six inches wide by nine inches high, reading as follows:

"NOTICE OF MORTGAGE

This Vessel is owned by LCI SHIPHOLDINGS, INC., and is subject to  a first preferred mortgage (the "First Mortgage") in favor of DVB BANK SE,  as security trustee, under the authority of Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands. Under the terms of the said First Mortgage, neither the Owner nor any charterer nor the Master of this Vessel nor any other Person has any power, right or authority whatever to create, incur or permit to be imposed upon this Vessel any lien or encumbrance except  as  permitted thereunder."

6.Mortgagee's   Right   to   Cure.    Without  prejudice  to  any  other  rights  of  the Mortgagee hereunder:

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(i)in the event that the provisions of Section 5(B) hereof or any of them shall not be complied  with, the Mortgagee shall be at liberty, but not obligated, to effect and thereafter to replace, maintain and renew all such Insurances upon the Vessel as it in its sole discretion may deem advisable;

(ii)in the event that the provisions of Section 5(C) and/or 5(D) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to arrange for the carrying out of such repairs and/or surveys  as it deems expedient or necessary; and

(iii)in the event that the provisions of Section 5(F) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to pay and discharge all such debts, damages and liabilities as  are therein  mentioned and/or to take any such measures as it deems expedient or necessary  for  the purpose of securing the release of the Vessel;

Any and all expenses incurred by the Mortgagee (including fees of counsel) in respect of its performances under the foregoing  subsections  (i), (ii) and (iii) shall be paid by the Owner on demand, with interest thereon at the rate provided for in Section 5(P) hereof from the date when such expenses were incurred by the Mortgagee.

7.Events of Default and Remedies.

(A)In case any one or more of the following events herein termed  an "Event of Default" shall occur and shall not have been received:

(i)a default in the payment when due of all or any part of the Obligations;

(ii)an Event of Default stipulated in Section 8.1 of the Credit Agreement shall occur and be continuing;

(iii)a default by the Owner occurs in the due and punctual observance of any of the covenants contained in Section 5 of this Mortgage (other than those listed in clause (iv) below); or

(iv)a default by the Owner occurs in the due and punctual observance of any of the covenants contained in subsections (A), (D), (E), (H), (J), or (P) of Section 5 of this Mortgage and such default continues unremedied for a period of ten (10) days; or

(v)it becomes impossible or unlawful for the Owner to fulfill any of the covenants and obligations contained in this  Mortgage  and  the  Mortgagee considers that such impossibility or illegality will have a material adverse effect on its rights under this Mortgage or the enforcement thereof.

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(B)If any Event of Default shall occur, the Mortgagee shall be entitled:

(i)to demand payment by written notice of the Obligations, whereupon such payment shall be immediately due and payable, anything contained in the Credit Agreement, the Note, this Mortgage, any of the other Transaction to the contrary notwithstanding and without prejudice to any other rights and remedies of the Mortgagee under the Credit Agreement, the Note, this Mortgage  or any of the other Transaction Documents, provided,  however, that if, before any sale of the Vessel, all defaults shall have been remedied in a manner satisfactory to the M01igagee, the M01igagee may waive such defaults by written notice to  the Owner; but no such waiver shall extend to or affect any subsequent  or  other default or impair any rights and remedies consequent thereon;

(ii)at any time and as often as may be necessary to take any such action as the Mortgagee may in its discretion deem advisable for the purpose of protecting the security created by this Mortgage and each and every expense or liability (including reasonable fees of counsel) so incurred by the Mortgagee in or about the protection of such security shall be repayable to it by the Owner promptly after demand, together with interest thereon at the Default  Rate  from  the date when such expense or liability was incurred by the Mortgagee. The Owner shall promptly execute and deliver to the Mortgagee such documents or cause promptly to be executed and delivered to the Mortgagee such documents, if any, and shall promptly do and perform such acts, if any, as in the opinion of the Mortgagee or its counsel may be necessary or advisable to facilitate or expedite the protection, maintenance and enforcement of the security created by this Mortgage;

(iii)to exercise all the rights and remedies in foreclosure and otherwise given to the Mortgagee by any applicable law, including those under the provisions of the Maritime Law;

(iv)to take possession of the Vessel, wherever the same may be, without prior demand and without legal process (when permissible under applicable law) and cause the Owner or other Person in possession thereof forthwith upon demand of the Mortgagee to surrender to the Mortgagee possession thereof as demanded by the Mortgagee;

(v)to require that  all policies, contracts and other records relating to the Insurances (including details of and correspondence  concerning  outstanding claims) be forthwith delivered to such adjusters, brokers or other insurers as the Mortgagee may nominate;

(vi)to collect, recover, compromise and give a good  discharge  for  all  claims then outstanding or thereafter arising under the Insurances or any of them and to take over or institute (if necessary using the name of the Owner) all such proceedings  in connection  therewith  as the Mortgagee  in its absolute discretion

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deems advisable and to permit the brokers through whom collection or recovery is effected to charge the usual brokerage therefore;

(vii)to discharge, compound, release or compromise  claims against the Owner in respect of the Vessel which have given or may give rise to any charge or lien thereon or which are or may be enforceable by proceedings thereagainst;

(viii)to take appropriate judicial proceedings for the  foreclosure  of  this Mo1igage and/or for the enforcement of the Mortgagee's rights hereunder or otherwise; recover judgment for any amount due in respect of the Credit Agreement, the Note, this M01igage or any of the other Transaction Documents and collect the same out of any property of the Owner;

(ix)to sell the Vessel by private contract at any time, free from any claim of or by the Owner of any nature whatsoever;

(x)to sell the Vessel at public auction (with power for the Security Trustee to purchase the Vessel at any such public auction and to set off the purchase price against all or any pmi of the Obligations), free from any claim of or by the Owner of any nature whatsoever by first giving notice of the time and place of sale with a general description of the property in the following manner:

(a)by publishing such notice for ten (10) consecutive days 111 a  daily newspaper of general circulation published in New York City;

(b)if the place of sale should not be New York City, then also by publication of a similar notice in a daily newspaper, if any, published at the place of sale; and

(c)by sending a similar notice by telecopy confirmed by registered mail to the Owner at its address hereinafter set forth at least fourteen (14) days prior to the date of sale.

Such sale of the Vessel may be held at such place as the Mortgagee in such notices may have specified, or such sale may  be  adjourned  by  the Mortgagee from time to time by announcement at the time and place appointed for such sale or for such adjourned sale and without further notice or publication the Mortgagee may make such sale at the time and place to which the same shall be so adjourned; and such sale may be conducted without bringing the Vessel to the place designated for such sale and in such manner as the Mortgagee may deem to be for its best advantage, and the Mortgagee may become the purchaser at such sale.

(xi)pending sale of the Vessel (either directly or indirectly) to manage, charter, lease, insure, maintain  and repair the Vessel and to employ or lay up the Vessel upon  such tern1s, in  such manner  and  for  such period  as the  Mortgagee  in its

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absolute discretion deems expedient and for the purpose aforesaid the Mortgagee shall be entitled to do all acts and things incidental or conducive thereto and in particular to enter into such arrangements respecting the Vessel, her insurance, management, maintenance,  repair,  classification  and employment  in all respects as if the M01tgagee were the owner of the Vessel and without being responsible for any loss thereby incurred;

(xii)to recover from the Owner on demand any such losses as may be incurred by the Mortgagee in or about the exercise of the powers vested in the Mortgagee under Section 7(B)(xi) above with interest thereon at the Default Rate from the date when such losses were incurred by the Mortgagee; and

(xiii)to recover from the Owner on demand all expenses, payments and disbursements (including fees and expenses of counsel) incurred  by  the Mortgagee in or about or incidental to the exercise by it of any of the powers vested in it hereunder together with interest thereon at the Default Rate from the date when such expenses, payments or disbursements were incurred by it;

PROVIDED, ALWAYS, that any sale of the Vessel or any interest therein by the Mortgagee pursuant to Section 7(B)(x) above shall operate to divest all right, title and interest of the Owner, its successors and assigns, in or to the Vessel so sold and upon such sale the purchaser shall not be bound to see or inquire whether the Mortgagee's power of sale has arisen in the manner herein provided and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefore.

In case the Mortgagee shall have proceeded to enforce any right, power or remedy under this Mortgage by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Mortgagee, then and in every such case the Owner and the M01tgagee shall be restored to their former positions and rights hereunder with respect to the property, subject or intended to be subject to this Mortgage, and all rights, remedies and powers of the Mortgagee shall continue as if no such proceedings had been taken.

(C)Notwithstanding the foregoing, it is understood that, other than Clause (c) of the definition  of Total Loss, a Total Loss of the Vessel which is covered by the insurance maintained by the Owner pursuant to Section 5(B) hereof shall not be deemed to be a default under this Mortgage, the Credit Agreement, the Note, the other Security Documents, or any of them.

8.Application   of  Proceeds.The proceeds  of  any sale made  either under  the power  of sale hereby granted to the Mortgagee  or under  a judgment  or decree in any judicial proceedings for the foreclosure of this Mortgage or for the enforcement of any remedy granted to · the Mortgagee hereunder, any net earnings  arising from the management,  charter or other use of the Vessel by the Mortgagee under any of the powers herein contained or by law provided  and

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the proceeds of any and all Insurances and any claims for damages on account of the Vessel or the Owner of any nature whatsoever and any Requisition Compensation, shall be applied as follows:

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First:	To the payment of all costs and expenses (together with interest thereon as hereinbefore provided) incurred by the Mortgagee, the Agents and/or the Lenders, including the compensation of their respective agents and attorneys, by reason of any sale, retaking, management or operation of the Vessel and all other sums payable to the Mortgagee, the Agents and/or the Lenders hereunder by reason of any expenses or liabilities incurred or advances made by it for the protection, maintenance and enforcement  of the security or of any of its rights hereunder or in the pursuit of any remedy hereby conferred; and  at the option of the Mortgagee to the payment of all taxes, assessments or liens  claiming priority  over the lien of this Mortgage;
Second:	To the payment of the Obligations in the manner provided in the Credit Agreement; and
Third:	Any surplus thereafter remaining, to the Owner or to the Owner's successors in interest or assigns, or to whomsoever may be lawfully entitled to receive the same.

In the event that the proceeds are insufficient to pay the amounts specified in paragraphs "First" and "Second" above, the Mortgagee shall be entitled to collect the balance from the Owner or any other Person liable therefore.

9.No Waiver. No delay or omission of the Mortgagee to exercise any right or power vested in it under the Credit Agreement, the Note, this Mortgage, the other Transaction Documents or any of them shall impair such right or power or be construed as a waiver thereof or as acquiescence in any default by the Owner hereunder, nor shall the acceptance by the Mortgagee of any payments in connection with this Mortgage from any source be deemed  a waiver hereunder.  However, if at any time after an Event of Default and prior to the actual sale of the Vessel by the Mortgagee or prior to any foreclosure proceedings the Owner cures all Events of Default and pays all expenses, advances and damages to the Mortgagee consequent on such Events of Default, with interest at the Default Rate from the date when such expenses, advances and damages were incurred, then the Mortgagee may accept such cure and payment and restore the Owner to its former position, but such action shall not affect any subsequent Event of Default or impair any rights consequent thereon.

10.Delegation   of  Power.   The Mortgagee  shall be  entitled  at  any time  and  as often as may be expedient to delegate all or any of the powers and discretions vested in it by this Mortgage (including the power vested in it by virtue of Section 12 hereof) in such manner  and upon such terms and  to  such Persons  as the  Mortgagee  in its  absolute  discretion  may  deem advisable.

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11.Indemnity. Without prejudice to any other rights and remedies of the Mortgagee under the Credit Agreement, the Note, this Mortgage or any of the other Transaction Documents, the Owner hereby agrees and undertakes to indemnify the Mo1igagee against all obligations and liabilities whatsoever and whensoever arising which the Mortgagee may incur in good faith in respect of, in relation to or in connection with the Vessel or otherwise howsoever in relation to or in connection with the enforcement of the Mortgagee's rights hereunder or under any of the other Transaction Documents to which the Owner is a party.

12.Power of Attorney.

(A)The Owner hereby irrevocably appoints the Mortgagee as its attorney-in-fact for the duration of the Security Period to do in its name or in the name of the Owner all acts which the Owner, or its successors or assigns, could do  in relation to the Vessel,  including without limitation, to demand, collect, receive, compromise, settle and sue for (insofar as the Mortgagee lawfully may) all freights, hire, earnings, issues, revenues, income and profits of the Vessel, and all amounts due from underwriters under the Insurances as payment of losses or as return premiums or otherwise, salvage awards  and recoveries, recoveries in general average or otherwise, and all other sums due or to become due to the Owner or in respect of the Vessel, and to make, give  and execute in the name of the Owner, acquaintance, receipts, releases or other discharges for the same, whether under seal or otherwise, to take possession of, sell or otherwise dispose of or manage or employ, the Vessel, to execute and deliver charters and a bill of sale with respect to the Vessel, and to endorse and accept in the name of the Owner all checks, notes, drafts, warrants, agreements and all other instruments in writing with respect .to the foregoing; PROVIDED, HOWEVER, that, unless the context otherwise permits under this Mortgage, such power shall not be exercisable by or on behalf of the Mortgagee unless and until any Event of Default shall occur and shall not be exercisable after all defaults have been cured.

(B)The exercise of the power granted in this Section  12 by or on behalf of the Mortgagee shall not require any Person dealing with the Mortgagee to conduct any inquiry as to whether any such Event of Default has occurred and is continuing, nor shall such Person be in any way affected by notice that any such Event of Default has not occurred nor is continuing, and the exercise by the Mortgagee of such power shall be conclusive evidence of its right to exercise the same.

13. Appointment of Receiver. If any legal proceedings shall be taken to enforce any right under this Mortgage, the Mortgagee shall be entitled as a matter of right to the appointment of a receiver of the Vessel and of the freights, hire, earnings, issues, revenues, income and profits due or to become due and arising from the operation thereof.

14.Commencement   of   Proceedings.    The  Mortgagee  shall  have  the  right  to commence  proceedings   in  the  courts  of  any  country  having  competent  jurisdiction   and  in particular  the  Mortgagee  shall  have  the  right  to  arrest  and  take  action  against  the  Vessel  at whatever  place  the Vessel  shall be  found lying  and  for the purpose  of  any action  which  the Mortgagee may bring before the local court for the jurisdiction  of such court or other judicial authority and the Owner agrees that for the purpose of proceedings  against the Vessel  any writ,

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notice, judgment or other legal process or documents may be served upon the Master of the Vessel (or upon anyone acting as the Master) and that such service shall be deemed good service on the Owner for all purposes.

15.Partial Invalidity. In the event that any prov1s10n or prov1s10ns of this Mortgage shall be declared invalid, void or otherwise inoperative by any present or future court of competent jurisdiction in any country, the Owner will, without prejudice to any other right and remedy of the Mortgagee under the Credit Agreement, the Note, this Mortgage, the other Transaction Documents or any of them, execute and deliver such other and further instruments and do such things as in the opinion of the M01igagee or its counsel will  be  necessary  or advisable to carry out the true intent and spirit of this Mortgage. In any event,  any  such declaration of partial invalidity shall not affect the validity of any other provision or provisions of this Mortgage, or the validity of this Mortgage as a whole.

16.Cumulative Remedies. Each and every power and remedy in this Mortgage specifically given to the Mortgagee shall be in addition to every other power and remedy herein or in the Credit Agreement, the Note or the other Transaction Documents specifically given or now or hereafter existing at law, in equity, admiralty, or by statute, and each and every power and remedy whether specifically in this Mortgage or in the Credit Agreement, the Note or the other Transaction Documents given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Mortgagee, and the exercise or the beginning of the exercise of any such power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other power or remedy under the Credit Agreement, the Note, this Mortgage or any other Transaction Documents.

17.   Recordation   of  Mortgage.  For the purpose  of recording  this  First  Preferred Mortgage  the  total  amount  is  Thirty  Eight  Million  Five  Hundred  Thousand    Dollars ($38,500,000)  (exclusive  of  interest,  expenses  and  fees)  and  interest  and   performance of mortgage covenants.  The  discharge  amount  is  the  same  as  the  total  amount  and  there  is no separate discharge  amount  for the Vessel.   It is not  intended  that this  Mortgage  shall  include property other than the Vessel, and it shall not include prope1iy other than the Vessel as the term "vessel" is used in the Maritime Law. Notwithstanding the foregoing, for property other than the Vessel, if any should be determined to be covered by this Mortgage, the discharge amount is zero point zero one percent (0.01%) of the total amount.

18.No    Waiver    of    Preferred    Status.      Anything   herein   to   the   contrary notwithstanding, it  is  intended  that  nothing  herein  shall  waive  the  preferred  status  of this M01igage  under  the  Maritime  Law  or  under  the  corresponding  provisions  of  any   other jurisdiction in which it is sought to be enforced and that,  if any provision or portion  thereof herein shall be construed to waive the preferred status of this Mortgage, then such provision to such extent shall be void and of no effect.

19.Counterparts. This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute but one and the same instrument.

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20.Notices.   Notices  and other communications under this Mortgage shall be in writing and may be given by facsimile as follows:

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If to the Owner:
	LCI Shipholdings, Inc.
	11 North Water Street
	Suite 18290
	Mobile, Alabama 36602 Attention:
	Chief Financial Officer
	Facsimile No.:  (251) 243 9121
	with a copy to:
	International  Shipholding Corporation
	One Whitehall Street
	New York, New York 10004
	Attention: Niels M. Johnsen Facsimile
	No.: (212) 514-5692
If to the Mortgagee:
	DVB Bank SE Park House
	16-18 Finsbury Circus
	London EC2M 7EB, United Kingdom Attention:
	Peter Attridge
	Department: Transaction and Loan Services
	Email: tls.london@dvbbank.com
	Fax:  +44 207 256 4352
	with a copy to:
	DVB TRANSPORT (US) LLC
	609 Fifth Avenue, 5th Floor
	New York, New York 10017, USA
	Facsimile: + 212 858 2664 Attention:
	Christoph Clauss
	Email: christoph. clauss@dvbbank. com

or to such other address as either party shall from time to time specify in writing to the other. Any notice sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter.

Every notice or other communication shall, except so far as otherwise expressly provided by this Mortgage, be deemed to have been received (provided that it is received prior to 10 a.m. New York time; otherwise it shall be deemed to have been received on  the  next following  Banking  Day),  in the  case  of  a facsimile  at the time of dispatch  thereof  (provided

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further that if the date of dispatch is not a Banking Day in the locality of the party to whom such notice or demand is sent it shall be deemed to have been received on the next following Banking Day in such locality), and in the case of a letter, at the time of receipt thereof.

21.Rights of Owner. Unless one or more Events of Default shall have occurred and be continuing, the Owner (a) shall be suffered and permitted to retain actual possession and use of the Vessel and (b) shall have the right, from time to time in its discretion, and without application to the Mortgagee, and without obtaining a release thereof by the  Mortgagee,  to dispose of, free from the lien hereof, any boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any other appurtenances of the Vessel that are no longer useful, necessary, profitable or advantageous in the operation of the Vessel, first or simultaneously replacing the same by new boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any other appurtenances of substantially equal value to the Owner, which shall forthwith become subject to the lien of this Mortgage.

22.Waiver; Amendment. None of the terms and conditions of this Mortgage may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Owner and the Mortgagee.

23.Successors   and   Assigns.     All  the  covenants,  promises,   stipulations   and agreements of the Owner and  all the rights  and remedies  of the Mortgagee  contained  in  this Mortgage shall bind the Owner, its successors and assigns, and shall inure to the benefit of the Mortgagee, its successors and assigns, whether so expressed or not.

24.Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of the Marshall Islands.

25.Headings. In this Mortgage, section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage.

[Signature Page to Follow]

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IN WITNESS WHEREOF, the Owner and the Mortgagee have executed this M01igage by their respective duly authorized representatives as of the day and year first above written.

LCI SHIPHOLDINGS, INC.,

as Owner

By:

Name:

Title:

DVB BANK SE,

as Mortgagee

By:

Name:

Title:

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ACKNOWLEDGMENT   OF MORTGAGE

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

On  the   day   ofm  the  year   2014,  before  me,   theundersigned personally appeared -------------·' personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Notary Public

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ACKNOWLEDGMENT   OF MORTGAGE

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

On  the            day  of, in the year 2014, before me, the undersigned  personally  appeared, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Notary Public

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Exhibit A

Credit Agreement

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Exhibit B

Note

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Exhibit C

Prior Mortgage

EXHIBIT H-1

FORM OF LETTER  OF INSTRUCTION  TO CLASSIFICATION  SOCIETY

To:      [NAME OF CLASSIFICATION SOCIETY]

Date:July [•], 2014

Dear Sirs:

Name of Vessel: "GREEN BAY" (the "Vessel")

Flag: United States of America

IMO Number: 9339818

Name of Owner: Waterman Steamship Corporation (the "Owner")

Name of mortgagee: DVB Bank SE (the "Mortgagee")

We refer to the Vessel, which is registered in the ownership of the Owner, and which has been entered in and classed by [Name of Classification Society] (the "Classification Society").

The Mortgagee has agreed to provide financing to the Owner upon condition that, among other things, the Owner and the Mortgagee issue this letter of instruction to the Classification Society.

The Owner and the Mortgagee irrevocably and unconditionally instruct and authorise the Classification Society (notwithstanding any previous instructions whatsoever which the Owner may have given to the Classification Society to the contrary) as follows:

1to send to the Mortgagee, following receipt of a written request from the Mortgagee, certified true copies of all original class records held by the Classification Society in relation to the Vessel;

2to allow the Mortgagee (or its agents), at any time and from time to time, to inspect the original class, related records and other information of the Owner and the Vessel either (i) electronically (through the Classification Society directly or by way of indirect access via the Owner's account manager and designating the Security Trustee as a user or administrator of the system under its account) or (ii) in person at the offices of the Classification Society, and to take copies of them electronically or otherwise;

3to notify the Mortgagee immediately in writing and by email to techcom@dvbbank.com if the Classification Society:

(a)receives notification from the Owner or any other person that the Vessel's classification society is to be changed;

(b)becomes aware of any facts or matters which may result or have resulted in a condition of class or a recommendation, or a change, suspension, discontinuance, withdrawal or expiry of the Vessel's class under the rules or terms and conditions of the Owner's or the Vessel's membership of the Classification Society;

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4following receipt of a written request from the Mortgagee:

(a)to confirm that the Owner is not in default of any of its contractual obligations or liabilities to the Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Classification Society;

(b)if the Owner is in default of any of its contractual obligations or liabilities to the Classification Society, to specify to the Mortgagee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the Classification Society; or

(c)to provide any other information reasonably requested.

Notwithstanding the above instructions given for the benefit of the Mortgagee, the Owner shall continue to be responsible to the Classification Society for the performance and discharge of all its obligations and liabilities relating to or arising out of or in connection with the contract it has with the Classification Society, and nothing in this letter should be construed as imposing any obligation or liability on the Mortgagee to the Classification Society in respect thereof. The instructions and authorizations which are contained in this notice shall remain in full force and effect until the Owner and the Mortgagee together give you notice in writing revoking them.

The Owner undertakes to reimburse the Classification Society in full for any costs or expenses it may incur in complying with the instructions and authorizations referred to in this letter.

This letter and any non-contractual obligations arising from or connected with it are governed by New York law.

WATERMAN STEAMSHIP CORPORATION, as Owner

By:  __________________________

Name:

Title:

DVB BANK SE, as Mortgagee

By:  __________________________

Name:

Title:

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EXHIBIT H-2

FORM OF CLASSIFICATION  SOCIETY LETTER  OF UNDERTAKING

To:Name of Owner

Address

Attention:

Facsimile

Email:

-and-

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom

Attention:  Peter Attridge

Department: Transaction and Loan Services

Email: tls.london@dvbbank.com  and techcom@dvbbank.com

Fax:  +44 207 256 4352

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA

Facsimile: + 212 858 2664

Attention:   Christoph Clauss

Email: christoph. clauss@dvb bank. com

Dated: [•]

Dear Sirs:

Name of Vessel: "GREEN BAY" (the "Vessel")

Flag: United States of America

IMO Number: 9339818

Name of Owner: Waterman Steamship Corporation (the "Owner")

Name of mortgagee: DVB Bank SE (the "Mortgagee")

We, [Name of Classification Society], hereby acknowledge receipt of a letter (a copy of which is attached hereto) dated [•] sent to us by the Owner and the Mortgagee (together the "Instructing Parties") regarding the Vessel.

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In consideration of the agreement by the Mortgagee to approve the selection of [•] (the receipt and adequacy of which is hereby acknowledged), we undertake to comply with the instructions of the Instructing Parties contained in such letter.

This letter and any non-contractual obligations arising out of or in connection with it shall be governed by New York law.

Very truly yours

For and on behalf of

[NAME OF CLASSIFICATION  SOCIETY]

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EXHIBIT I

WATERMAN STEAMSHIP CORPORATION

AS PLEDGOR

DVB BANK SE

(ACTING IN ITS FUNCTION AS LENDER AND SECURITY TRUSTEE)

AS PLEDGEE

_________________________________________________

Account Pledge Agreement

(Kontoverpfandung )

JULY________, 2014

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Version 12/2013Account Pledge Agreement

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CONTENTS
CLAUSE		PAGE
1	Definitions and Interpretation	3
2	Purpose of the pledge	5
3	Pledge	5
4	Enforcement of the Pledges	6
5	Access to Account Information, Pledgor's Right of Disposal	7
6	General Business Conditions	8
7	Undertakings of the Pledgor	8
8	Representations and Warranties	9
9	Indemnity	10
10	Release (Pfandji-eigabe )	10
11	Costs and Expenses	11
12	Duration and Independence	11
13	Partial Invalidity; Waiver	11
14	Amendments	12
15	Notices and their Language	12
16	Counterparts	13
17	Conclusion of this Agreement	13
18	Applicable Law; Jurisdiction	13
SCHEDULE 1 List of Accounts		15
SCHEDULE 2 Notice of Pledge		16

Version 12/2013Account Pledge AgreementPage 2 of17

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THIS ACCOUNT PLEDGE AGREEMENT is made BETWEEN:

WATERMAN  STEAMSHIP CORPORATION, a corporation organised under the laws of

the    State    of    New    York    having    its     offices     at     One     Whitehall     Street New York, NY 10004 (Pledgor);

and

DVB BANK SE ("DVB"), a banking corporation organized under the laws of the Federal Republic of Germany, having its offices at Platz der Republik 6, D-60325 Frankfurt am Main, Germany (acting in its capacity as Security Trustee under the Credit Agreement (as defined below) (Pledgee).

WHEREAS:

(A)Pursuant to a Credit Agreement dated July _, 2014, (the "Credit Agreement" ) made by and among (1) the Pledgor, as borrower, (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (along with the Pledgor, the "Security Parties "), (3) the banks and financial institutions listed on Schedule I thereto, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 13 thereto, the "Lenders" and each a "Lender"), (4) DVB, as facility agent and security trustee, and (5) DVB, as mandated lead arranger, the Lenders agreed to provide to the Pledgor, a senior secured term loan of up to

$38,500,000.

(B)The Pledgor has agreed to grant a pledge over its present and future credit balances standing to the credit on the Accounts (as defined below) as security for the Pledgee' s claims against the Pledgor under the Security Documents (as defined below).

(C)The security created by this Agreement is to be administered by DVB in its own name and in the interest of the Lenders pursuant to the relevant provisions of Section of the Credit Agreement.

NOW, IT IS AGREED as follows:

1.        DEFINITIONS AND INTERPRETATION

1.1      Definitions

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In this Agreement:

Version 12/2013Account Pledge AgreementPage 3 of  17

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Accounts  means  the bank  accounts listed in Schedule  1 (List of Accounts ) hereto  and Ac­count means any of them.

Account Bank means a bank listed in Schedule 1 (List of Accounts) administering any of the Accounts.

Event of Default means an event in accordance with Clause 8 of the Credit Agreement.

Finance Documents means the Credit Agreement, the fee letter, the Security Documents, and any other document designated as a "Transaction Document" by the parties thereto and entered into pursuant to the Credit Agreement.

Secured Obligations means any and all sums, liabilities and obligations in whatsoever currency (whether now existing or hereafter arising, whether  actual  or  contingent,  whether solely or jointly with others, whether as primary obligor or surety whether or not for the payment of money including, without limitation, any obligation or liability to pay damages) which are or may  become payable or owing by the Security Parties to the Pledgee or any Lender pursuant to or in connection with the Transaction Documents or any of them, including, but not limited to any obligation based on unjust enrichment (ungerechtfertigte Berei­ cherung) or tort (Delikt) as well as under parallel debt.

Security Documents means any security document entered into as security for any obligations of the Security Parties under the Transaction Documents or any of them.

1.2      Interpretation

a)This Agreement is made in the English language only but is governed by German law. For the avoidance of doubt, the English language version of this Agreement shall prevail over  any translation of this Agreement. However, where a German translation of a word or phrase appears in the text of this Agreement, the German translation of such word or phrase shall prevail wherever such original English word or phrase translated by such German word or phrase appears in the text of this agreement. Wherever a German legal term or concept has been used in this Agreement, such German law legal term or concept shall be authoritative for the construction. Where an English legal te1m or concept has been used in this Agreement, the related German legal term or concept shall be authoritative for the purpose of construction, unless specifically so provided.

b)Words importing the singular include the plural and vice versa.

c)Any reference to a party or other person (including the Pledgor and  the  Pledgee) includes   the   respective   successor(s)   in   law   (including   any   universal   successor ( Gesamtrechtsnachfolger )  of  that  person  by  way  of merger  ( Verschmelzung),  any

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other reorganization contemplated in the German Transformation Act ( Umwand­ lungsgesetz) or otherwise) and any assign(s) and transferee(s) of that person and, to the extent legally possible, any legal provision to the contrary is waived.

2.PURPOSE OF THE PLEDGE

The pledges created hereunder are constituted in order to secure (zur Besicherung) the prompt and complete satisfaction of all Secured Obligations. The pledges shall also cover any future extension of the Secured Obligations and the Pledgor herewith expressly agrees that the provisions of section 1210 para. 1 sentence 2 of the German Civil Code (Biirgerliches Gesetzbuch) shall not apply to this Agreement.

3.PLEDGE

3.1The Pledgor hereby grants to the Pledgee a first priority pledge over all its present and future rights and claims (whether conditional or unconditional) arising against the Ac­ count Bank from or in relation to any Account, any sub-account, renewal, re-designation or replacement thereof, including without limitation:

a)all rights and claims in respect of present and future:

aa) cash deposits (Guthaben) (including, without limitation, saving deposits (Spareinlagen ), time deposits ( Termineinlagen) (including fixed deposits (Festgeldguthaben ) and termination monies (Kiindigungsgelder )); and

bb) call money deposits ( Tagesgeldeinlagen) (including deposits  for overnight money ( Tagesgelder), tomorrow next money ( Tagesgelder mit  Lieferung nach zwei Tagen), spot next money ( Tagesgelder mit Lieferung zu einem bes­ timmten Zeitpunkt) and money until further notice ( Geld b.a.w.))) standing from time to time to the credit of the Account, including all claims to interest payable;

b)in respect of each Account maintained as a giro account (Girokonto) at present or in the future all claims:

aa)       in respect of present and future credit balances (positive Salden);

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bb)in respect of present and future credit entries (gutgeschriebene Betrage ),

cc)to interest payable; and

dd) to all other present and future monetary rights and claims arising under or in connection with the respective giro agreement (Girovertrag) (including with-

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out limitation all claims to the grant of a credit entry ( Gutschrftanspruch ));

and

c)in respect of each Account maintained as a current account (Kontokorrentkonto ) at present or in the future to:

aa) all present and future rights and claims arising under or in connection with the respective current account agreement (Kontokorrentabrede ) (including, with­ out limitation, all claims to detennination and acknowledgement of the cur­ rent account balance (Anspruch auf Saldofeststellung und -anerkennung);

bb)all claims to present and future current account balances (Saldoforderungen )

including the causal final balance (kausaler Schlusssaldo ); and

cc) the right to terminate the current account relationship (Kiindigung des Kontokorrents ) )

(each a Pledge and together Pledges).

3.2The Pledgee accepts the Pledges.

3.3The validity and effect of each of the Pledges shall be independent from the validity and the effect of the other Pledges created hereunder.

3.4Each of the Pledges is in addition, and without prejudice, to any other security the Pledgee may now or hereafter hold in respect of the Secured Obligations.

3.5For the avoidance of doubt, the parties agree that nothing in this Agreement shall exclude a transfer of all or part of the Pledges created hereunder by operation of law upon the transfer or assignment including by way of assumption ( VertragszJ,bernahme) of all or part of the Secured Obligations by the Pledgee to a future pledgee.

3.6Waiving s 418 of the German Civil Code (Biirgerliches Gesetzbuch), the parties to this Agreement hereby agree that the security created hereunder shall not be affected by any transfer or assumption of the Secured Obligations to, or by, any third party.

4.ENFORCEMENT OF THE PLEDGES

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4.1If the requirements set forth in sections 1273, 1204 et seq. of the German Civil Code with regard to the enforcement of any of the Pledges are met (Pfandreife ), then in order to enforce the Pledges, the Pledgee may at any time hereafter avail itself of all rights and remedies that a pledgee has upon default of a pledgor under the laws of the Federal Republic of Germany.

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4.2Notwithstanding section 1277 of the German Civil Code, the Pledgee is entitled to exercise their rights without obtaining a final judgement or other instrument (vollstreckbarer Titel) against the Pledgor in any relevant court or tribunal.

4.3The Pledgor hereby expressly agrees that five business days' prior written notice to the Pledgor of enforcement of the Pledges shall be sufficient. However, such notification is not necessary if (i) the Obligors have ceased to make payments generally, (ii) an application for the institution of insolvency proceedings is filed by or against any of them or (iii) there is reason to believe that observance of the notice period will adversely affect the security interest of the Pledgee.

4.4The Pledgee will enforce the Pledges or any of them by collecting the credit balance from the Accounts only to the extent necessary in order to ensure that the outstanding amounts under the Secured Obligations are satisfied. After complete and full satisfaction of all Secured Obligations any remaining surplus shall be promptly retransferred to the Pledgor.

4.5If the Pledgee seeks to enforce any Pledge, the Pledgor shall, at its own expense, render forthwith all necessary assistance in order to facilitate the prompt realization of the relevant Pledge(s) or the exercise by the Pledgee of any other right.

4.6If the Pledges are enforced, no rights of the Pledgee shall pass to the Pledgor by subrogation or otherwise unless and until all of the Secured Obligations have been satisfied and discharged in full. Until then, the Pledgee shall be entitled to treat all enforcement proceeds as additional collateral for the Secured Obligations, or to seek satisfaction from such proceeds at any time.

4.7The Pledgee may, in its sole discretion, determine which of several security interests, if applicable, shall be used to satisfy the Secured Obligations.

4.8The Pledgor hereby expressly waives all defenses of revocation (Einrede der Anfechtbarkeit ) and set-off (Einrede der Aufrechenbarkeit ) pursuant to sections 770, 1211 of the German Civil Code save to the extent that the Pledgor is in a position to discharge the Secured Obligations by way of set-off of claims which are either undisputed or which have been the subject of a final court judgment against claims of the Pledgee. The Pledgor hereby expressly waives any defences of failure to pursue remedies. (Einrede der Vorausklage) pursuant to section 771 of the German Civil Code. In case of enforcement, section 1225 of the German Civil Code (Forderungsubergang auf den Verpfo, nder) shall not apply.

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5.ACCESS TO ACCOUNT INFORMATION, PLEDGOR 1S RIGHT OF DISPOSAL

5.1The Pledgor hereby authorizes the Pledgee to receive information on the balance on each of the Accounts from the relevant Account Bank at any time.

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5.2Prior to the occurrence of an Event of Default, the Pledgor shall have the right to exercise all rights and powers in respect of the Accounts as listed in Schedule 1 (List of Accounts) as provided for in the Credit Agreement.

5.3After the occurrence of an Event of Default, the Pledgor may exercise any rights and powers in respect of the Accounts only with the prior written consent of the Pledgee.

5.4Each Account may only be closed with the prior written consent of the Pledgee.

6.GENERAL BUSINESS CONDITIONS

6.1Provided that the Pledgee is an Account Bank or the only Account Bank, the Pledgee subordinates hereby the pledge existing by operation of its general business conditions, to the Pledges so that the Pledges will rank ahead of such pledge in its general business conditions.

6.2The Pledgor undertakes to procure that each Account Bank (which is not the Pledgee) subordinates any existing pledge, including, but without limitation, any pledge existing by operation of its general business conditions, to the Pledges so that the Pledges will rank ahead of all other pledges affecting the Accounts with the relevant Account Bank.

7.UNDERTAKINGS OF THE PLEDGOR

During the term of this Agreement, the Pledgor undertakes to the Pledgee:

7.1to notify any Account Bank and any other relevant third party of the Pledges in substantially the form set out in Schedule 2 (Notice of Pledge) attached to this Agreement with­ out undue;

7.2to cause the Account Bank to acknowledge the Pledges towards the Pledgee by executing and delivering to the Pledgee the form of the acknowledgment attached to the notice set out in Schedule 2 attached to this Agreement;

7.3to operate the Accounts in accordance with the Finance Documents;

7.4to ensure that it will be the sole legal and beneficial owner of the Accounts;

7.5not to take, or participate in,

(i)any action which results or might result in the Pledgor's loss of ownership of all or part of the Accounts;

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(ii)any action which results or might result in the closing of the Accounts;

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(iii)any other transaction which would have the same effect as a sale, transfer, encumbrance, or other disposal of the Accounts,

(iv)any action which would for any other reason be inconsistent with the security interest of the Pledgees or the security purpose (as described in Clause 3 (Pledge) above), or

(v)any action which would defeat, impair or circumvent the rights of the Pledgee, except, in each case, with the prior written consent of the Pledgee;

7.6not to encumber, permit to subsist, create, or agree to create any other security interest or third party right in or over the Accounts other than any pledge existing by operation of the relevant Account Bank's general business conditions;

7.7render at its own expense all necessary assistance in the event the Pledgee seeks the enforcement of the Pledges;

7.8to promptly inform the Pledgee, by notification in writing, of all events which may adversely affect the security interest of the Pledgee created by this Agreement; and

7.9upon the opening of any other account in the Federal Republic of Germany, to immediately notify the Security Trustee for and on behalf of the Pledgees and to grant respective account pledges over any such accounts to the Pledgees and any future pledgee following the format of this Agreement and in accordance with its terms and conditions.

8.REPRESENTATIONS AND WARRANTIES

The Pledgor represents and warrants to the Pledgee by way of an independent guarantee in the meaning of section 311 of the German Civil Code (unabhiingiges Garantieversprechen) that:

8.1it is and will be the sole legal and beneficial  owner, free from encumbrances other than the Pledges, of the Accounts and has the corporate power and authority to enter into this Agreement;

8.2the Pledgor is validly existing under the laws of State of New York and is not over- indebted, insolvent or subject to any insolvency proceedings;

8.3it has corporate power and authority to enter into this Agreement and to perform its obligation contemplated hereby;

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8.4all necessary corporate action has been taken to authorize the entry into this Agreement and the execution of this Agreement;

8.5upon due notification to the Account Banks, the Pledge will have as security for any and all Secured  Obligations,  a validly perfected  first-priority  security interest  in the Ac-

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counts or over the  proceeds from any enforcement of the Accounts in accordance with Clause 4.1 (Enforcement of the Pledges ) above and the Pledges created hereby are enforceable without enforceable judgment or other instrument (vollstreckbarer Titel); and

8.6the execution, delivery and performance of this Agreement will not violate any pro­ vision or any material requirement of law or contractual obligation of the Pledgor and will not result in the creation or imposition of any lien on any of the material properties or assets of the Pledgor pursuant to any requirement of law or contractual obligation, except the liens created pursuant to this Agreement.

9.INDEMNITY

9.1In case of willful acts, gross negligence, malice (Arglist) as well as in case of any injury of life, personal injury or injury to health, the Pledgee shall be liable in accordance with the statutory provisions. In cases of slight negligence, the Pledgee will not be liable unless a breach of a material contractual obligation occurs. In such cases, the Pledgee' s liability will be limited to the typical, foreseeable damage. In any other case of slight negligence including tort, the Pledgee 's liability is excluded.

9.2The Pledgor will indemnify the Pledgee and keep the Pledgee indemnified against any and all damages, losses, actions, claims, expenses, demands and liabilities which may be incurred by, or made against, the Pledgee for anything done or omitted in the exercise or purp01ied exercise of the powers contained herein and occasioned by any breach of the Pledgor of any of its obligations or undertakings contained herein other than to the extent that such damages, losses, actions, claims, expenses, demands and liabilities are incurred by, or made against, the Pledgee as the result of the gross negligence or willful misconduct of the Pledgee.

10.RELEASE  (PFANDFREIGABE)

10.1Upon complete and irrevocable satisfaction of the Secured Obligations, the Pledgee will as soon as reasonably practical declare the release of the Pledges (Pfandfreigabe ) to the Pledgor as a matter of record. For the avoidance of doubt, the parties are aware that upon full and complete satisfaction of the  Secured Obligations, the Pledges,  due to their accessory nature (Akzessorietat ), cease to exist by operation of German mandatory law.

10.2At any time when the total value of the aggregate security granted by the Pledgor and any of the other Obligors to secure the Secured Obligations  (Security) which can be

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expected to be realized in the event of an enforcement of the Security (realisierbarer  Wert) exceeds 110% of the Secured Obligations (Limit) not only temporarily, the Pledgee shall on demand of the Pledgor release such part of the Security (Sicherheite1freigabe ) as the Pledgee may  in its reasonable  discretion  determine  so as to reduce the realizable  value of the

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Security to the Limit. The Pledgor shall demonstrate to the Pledgee that the requirements for such release have been met.

10.3If an amount paid by any Obligor to the Pledgee under any Finance Document is capable of being avoided or otherwise set aside on the liquidation, administration, winding­ up or other similar proceeding  in the jurisdiction of such Obligor or otherwise, then such amount shall not be considered to have been finally and irrevocably paid for the purposes hereof.

11.     COSTS AND EXPENSES

All costs, charges, fees and expenses triggered by this Agreement or reasonably incurred in connection with its preparation, execution, amendments and enforcement, in each case including fees for legal advisers, shall be borne by the Pledgor.

12.DURATION  AND INDEPENDENCE

12.1This Agreement shall remain in full force and effect until complete satisfaction of the Secured Obligations. The Pledges shall not cease to exist if the Secured Obligations have only temporarily been discharged.

12.2This Agreement shall create a continuing security and no change, amendment, re­ statement or supplement whatsoever in the Finance Documents or in any document or agreement related to any of the Finance Documents shall affect the validity or the scope of this Agreement nor the obligations which are imposed on the Pledgor pursuant to it.

12.3This Agreement is independent from any other security or guarantee which may have been or will be given to the Pledgee. None of such other security shall prejudice, or shall be prejudiced by, or shall be merged in any way with this Agreement.

13.PARTIAL INVALIDITY; WAIYER

13.1If at any time, any one or more of the provisions hereof is or becomes invalid, illegal or unenforceable in any respect under the law of any relevant jurisdiction, such provision shall as to such jurisdiction, be ineffective to the extent necessary without affecting or impairing the validity, legality and enforceability of the remaining provisions hereof or of such provisions in any other jurisdiction. The invalid or unenforceable provision shall be deemed replaced by such valid, legal or enforceable provision which comes as close as possible to the original intent of the parties and the

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invalid, illegal or unenforceable provision. The aforesaid shall apply mutatis mutandis to any gap (Regelungs!U cke) in this Agreement.

13.2No failure to exercise, nor any delay in exercising, on the part of the Pledgee, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial

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exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided hereunder are cumulative and not exclusive of any rights or remedies provided by law.

14.AMENDMENTS

Any amendments, changes or variations to this Agreement may be made only with the agreement of the Pledgor and the Pledgee in writing. This applies also to this Clause 14.

15.NOTICES AND THEIR LANGUAGE

15.1Any notice or other communication under or in c01mection with this Agreement shall be in writing and shall be delivered personally, or sent by letter or in facsimile to the following addresses:

for the Pledgor:

WATERMAN STEAMSHIP CORPORATION

11 North Water Street Suite 18290

Mobile, Alabama 36602 Attention: Chief Financial Officer Facsimile No.:  (251) 243 9121

with a copy to:

for the Pledgee:

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International

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Shipholding Corporation One Whitehall Street

New York, New York 10004 Attention: Niels M. Johnsen Facsimile No.: (212) 514-5692

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom

Attention:  Peter Attridge

Department: Transaction and Loan Services

Email: tls.london@dvbbank.com

Fax:  +44 207 256 4352

with a copy to:

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DVB BANK SE

c/o DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA

Facsimile: +  212 858 2664

Attention:  Christoph Clauss

Email: christoph.clauss@dvbbank.com

or to such other address as the recipient may notify or may have notified to the other party in writing.

15.2Any notice or other communication under or in connection with this Agreement shall be in the English language or, if in any other language, accompanied by a translation into the English language. In the event of any conflict between the English text and the text in any other language, the English text shall prevail.

15.3The Pledgor agrees that any writ, notice of judgment or other legal process or document in connection with such proceeding may be served upon the Pledgor by delivering the same to its address as aforesaid. Additionally for any proceedings in German courts the Pledgor shall provide an agent for service of process in the Federal Republic of Germany and the Pledgor agrees that any writ, notice or judgment or other legal process or document in connection with such proceeding may be served upon the Pledgor by delivering the same to [Name of the Process Agent in Germany].

16.COUNTERPARTS

This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed and delivered, shall be an original but all the counterparts shall together constitute but one and the same instrument.

17.CONCLUSION OF THIS AGREEMENT

This Agreement may also be concluded by an exchange of signed signature pages, transmit­ ted by means of telecommunication ( telekommunikative Ubermittlung), by fax or by electronic photocopy.

18.APPLICABLE LAW; JURISDICTION

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18.1This Agreement and any non-contractual obligations in connection therewith shall be governed by, and construed in accordance with, the laws of the Federal Republic of Germany excluding the German conflicts of law rules.

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18.2The place of jurisdiction for any and all disputes arising under or in connection with this Agreement shall be Frankfurt am Main, Germany. The Pledgee however, shall also be entitled to take action against the Pledgor in any other court of competent jurisdiction. Further, the taking of proceedings against the Pledgor in any one or more jurisdictions shall not preclude the taking of proceedings in any other jurisdiction, whether concurrently or not, if and to the extent permitted by applicable law.

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SCHEDULE 1

List of Accounts

		No.
	Account Type	[Sub- ]Account No.	Bank Sort Code/ IBAN/ S\VIFT-Code	Name        and Address  of the Account Bank
Account 1	Earnings Account			DVB Bank SE Platz der Re- publik 6 60325 Frank- fort Germany
Account 2	Retention Account			DVB Bank SE Platzder Republik 6 60325 Frankfurt Germany

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SCHEDULE 2

Notice of Pledge

[ON PLEDGOR'S LETTERHEAD]

From: WATERMAN STEAMSHIP CORPORATION

To:[Account Bank]

Date:[Date]

Notice  of pledge  in  respect  of  the  account  [Account Number]  (the  ["Earnings  Ac­count"]/["Retention account"])

Dear Sirs

Re:

We hereby give you notice that by an account pledge agreement dated []  (Account Pledge Agreement) we have pledged in favour of DVB Bank SE [acting in its function as security trustee) (the Pledgee ) all of our rights, title and interest in and to the [Earnings Account]/[Retention Account] (which shall include all sub-accounts, renewals, replacements and redesignations thereof) and all monies and interest from time to time standing or accruing to the credit thereof.

Until notice to the contrary from the Pledgee to be served on you as Account Bank (provided you are not the Pledgee) we may continue to operate the Earnings Account and in particular may dispose over the amounts standing to the credit of the Earnings Account. Upon receipt of such aforesaid notice to the contrary you, as Account Bank, shall not allow any dispositions by ourselves of amounts standing to the credit of the Earnings Account.

A copy of the Account Pledge Agreement is attached hereto.

Yours faithfully,

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_______________________________

For and on behalf of WATERMAN STEAMSHIP CORPORATION Attachment: Copy of the Account Pledge Agreement

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[ON ACCOUNT BANK'S LETTERHEAD]

From:  [Account Bank]

To:      \VATERMAN STEAMSHIP CORPORATION

Copy:  [DVB Bank SE in its function as Security Trustee]

Your notice of pledge in respect of the account [Account Number] (the ["Earnings Account"]/["Retention account"])

We acknowledge receipt of the above notice and confirm that we have neither received any previous notice of pledge relating to the [Earnings Account]/[Retention account] nor are we aware of any third party rights in relation to the [Earnings Account]/[Retention account].

We hereby irrevocably and unconditionally waive our rights in respect of and agree not to make any set-off or deduction from the [Earnings Account]/[Retention account] or invoke any rights of retention in relation to the [Earnings Account]/[Retention account].

We agree that the pledge in our favour over the [Earnings Account]/[Retention account] granted pursuant to our General Business Conditions shall rank behind all the pledges over the [Earnings Account]/[Retention account] granted to the Pledgees by the Pledgor pursuant to the Account Pledge Agreement referred to in the notice referred to above.

[DATE]

___________________________

For and on behalf of

[ACCOUNT BANK]

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THIS ACCOUNT PLEDGE AGREEMENT has been entered into on the date stated on the cover page by

\VATERMAN STEAMSHIP CORPORATION

By: _______________________________

Name: [NAME]

Title:[TITLE]

DVB BANK SE

By: _______________________________

Name: [NAME]

Title:[TITLE]

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EXHIBIT J

MANAGER'S UNDERTAKING

July _, 2014

DVB Bank SE

Park House

16-18 Finsbury Circus

London EC2M 7EB, United Kingdom

Attention:   Peter Attridge

Department: Transaction and Loan Services Email: 

tls.london@dvbbank.com

Fax: +44 207 256 4352

with a copy to:

DVB TRANSPORT (US) LLC

609 Fifth Avenue, 5th Floor

New York, New York 10017, USA

Facsimile: + 212 858 2664 Attention:  

Christoph Clauss

Email:  christoph.clauss@dvbbank.com

WATERMAN  STEAMSHIP CORPORATION  (the "Owner")

Dear Sirs:

We refer to that certain credit agreement dated as of July _, 2014 (the "Credit Agreement"), made by and among (1) the Owner, as borrower,  (2) INTERNATIONAL  SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) the  banks and financial institutions listed on  Schedule  I of the Credit Agreement, as lenders (together with any bank or financial  institution  which  becomes  a Lender pursuant to Section 12 of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB BANK SE ("DVB"), as facility agent for the Lenders and security trustee for the Lenders (in such capacities, the "Facility Agent" and the "Security Trustee",  respectively) and (5) DVB, as mandated lead arranger, the Lenders have agreed to make available to the Owner a secured te1m loan facility in the amount of up to Thi1iy Eight Million Five Hundred Thousand Dollars($38,500,000).

We hereby confirm that we have been appointed as the [commercial][technical]  manager  of the United States flag vessel GREEN BAY (the "Vessel"), Official No. 9339818, pursuant to a management   agreement   (the  "Management  Agreement"),   dated   as  of _, 2014, between the Owner and ourselves. We hereby represent and warrant that the copy of the Management Agreement attached hereto is a true and complete copy of the Management Agreement, and that there have been no amendments or variations thereto or defaults thereunder by us or, to the best of our knowledge and belief, the Owner.

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In consideration of the Creditors (as defined in the Credit Agreement) granting their approval to our appointment as manager of the Vessel, we hereby irrevocably and unconditionally unde1iake with the Creditors as follows that:

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(a)all claims of whatsoever nature which we have or may at any time hereafter have against or in connection with the Vessel, its earnings, insurances or requisition compensation,  or against the Owner, shall rank after and be in all respects subordinate to all of the rights and claims of the Creditors against such property or persons; provided, however, so long as no Event of Default (as defined in the Credit Agreement) shall have occurred or be continuing, any amount due to us under the Management Agreement may be paid by the Owner;

(b)we shall not institute any legal or quasi-legal proceedings under any jurisdiction at any time hereafter against the Vessel, its earnings, insurances or requisition compensation, or against the Owner in any capacity without the Facility Agent's express, prior written consent;

(c)we shall upon the Facility Agent's written request deliver to the Facility Agent all documents of whatever nature held by us or any sub-manager appointed by us in connection with the Owner or the Vessel, its earnings, insurances or requisition compensation;

(d)we shall not do, or omit to do, or cause anything to be done or omitted, which might be contrary to or incompatible with the obligations undertaken by the Owner under the Credit Agreement and the other Transaction Documents (as defined in the Credit Agreement);

(e)we shall not agree or purport to agree to any material amendment or variation or termination of the Management Agreement without the prior written consent  of the  Lenders,  except where the amendment or variation is required to comply with applicable laws or regulations;

(f)we shall (i) direct and procure that all moneys payable to us or through us with respect to any charter or other contract of employment with respect to the Vessel ("Charter Revenue") shall be paid directly into (A) our account at DVB BANK SE (Account No.----  (the "[WATERMAN] Account"), or (B) the Owner's Earnings Account (as defined in the Credit Agreement), and (ii) direct and procure that all aforesaid moneys received into the [WATERMAN]  Account  shall be remitted  from such account to the Owner's Earnings Account (as defined in the Credit Agreement) as soon as possible after receipt thereof;

(g)we shall ensure that no Charter Revenue shall be paid into or through any account which is pledged or assigned to, or otherwise encumbered or subject to any rights of setoff in favor of, any entity or person other than the Security Trustee;

(h)we shall procure that any sub-manager appointed by us will, on or before the date of such appointment, enter into an unde1taking in favor of the  Creditors  in substantially the  same form as this letter;

(i)we shall advise the Facility Agent in writing prior to our ceasing to be the manager of the Vessel; and

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U)we shall immediately advise the Facility Agent in writing if the Vessel's Safety Management Certificate is withdrawn.

Upon satisfaction of the indebtedness of the Owner to the Creditors under the Credit Agreement and the other applicable Transaction Documents, our obligations hereunder shall terminate.

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The provisions of this letter shall be governed by, and construed in accordance with, the laws of the State of New York.

Any legal action or proceeding with respect to this letter may be brought in any New York State court or Federal court of the United States of America sitting in New York City and any appellate court from any thereof or such other courts having jurisdiction over such action or proceeding as the Lender may select. By execution and delivery of this letter  and for the  exclusive benefit of the Lenders, we irrevocably and generally and unconditionally  accept the jurisdiction  of such courts.

[Signature page follows]

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3

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[MANAGER]

By: -------­

Name:

Title:

COPY OF MANAGEMENT  AGREEMENT

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EXHIBIT K

FORM OF ASSET MAINTENANCE  COMPLIANCE  CERTIFICATE

CERTIFICATE OF THE CHIEF FINANCIAL OFFICEROF

INTERNATIONAL  SHIPHOLDING  CORPORATION

FOR THE PERIOD ENDED [JUNE 30]/[DECEMBER  31], 20

The   undersigned,  being   the   chief  financial  officer  of   INTERNATIONAL SHIPHOLDING  CORPORATION,  a corporation organized  and  existing under the laws of the State of Delaware  ("ISH"), hereby  certifies,  on behalf  of the Borrower  (as defined  below),  to DVB BANK SE ("DVB"), as facility agent for the Lenders, in connection with that certain credit agreement,  dated  as of, 2014  (the "Credit  Agreement"), by  and  among  (1) WATERMAN STEAMSHIP CORPORATION,  a corporation incorporated under the laws of the State of New York, as borrower (together with any successor thereto, the "Borrower"), (2) ISH, as  guarantor,   (3)  the  banks  and  financial  institutions   listed  on  Schedule  I  of  the  Credit Agreement, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Credit Agreement, the "Lenders" and each a "Lender"), (4) DVB, as facility agent for the Lenders and security trustee for the Lenders and (5) DVB, as mandated lead  arranger, providing  for a secured term loan to be made available to the Borrower,  in the , amount  of up  to  Thirty  Eight  Million  Five Hundred  Thousand  Dollars  (US$38,500,000)  (the "Facility"), that the Borrower is in compliance with the covenant contained in Section 9.4 of the Credit  Agreement  and  Annex  A  attached  hereto  shows  the  calculation  thereof  in reasonable detail.

Capitalized  terms  used  herein  without  definition  have  the  meaning  ascribed thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of this [30th131st] day of [June/December], 20_.

INTERNATIONAL  SHIPHOLDING  CORPORATION

By:

Name:

Title:

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ANNEX A

Section 9.4 - Fair Market Value

The  Fair  Market  Value  of  the  Vessel  shall  not  be  less  than  [INSERT  the  applicable Required Percentage] of the outstanding amount of the Facility.

A.	Fair Market Value of GREEN BAY	Actual = $
B.	Amount of Facility outstanding	Actual = $
A expressed as a percentage of B		Actual%
Requirement pursuant to Credit Agreement:		not less than%

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EXHIBIT L

OMNIBUS ASSIGNMENT,  ASSUMPTION  AND AMENDMENT  AGREEMENT  OMNIBUSASSIGNMENT,ASSUMPTIONAND    AMENDMENTAGREEMENT(this

"Agreement") dated as of [•], 2014, among International Shipholding Corporation, a Delaware corporation ("ISH" or the "Guarantor"), Waterman Steamship Corporation, a New York corporation ("Waterman" or "Assignor"), LCI Shipholdings, Inc., a corporation existing under the laws of the Republic of the Marshall Islands ("LCI" or "Assignee"), DVB Bank SE, as facility agent (in such capacity, the "Facility Agent") and as security trustee (in such capacity, the "Security Trustee") and the other parties named in the Credit Agreement (as defined below).

All capitalized terms used herein and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement.

W I T N E S S E T H

WHEREAS, Waterman is the initial borrower under that certain Credit Agreement, dated as of July [_J, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), among, inter alias, Waterman, ISH, the Lenders party thereto, the Facility Agent and the Security Trustee;

WHEREAS, the Credit Agreement requires that Waterman transfer the Vessel and all other Collateral to LCI by no later than [October 31, 2014] and that Waterman and LCI enter into  this Agreement and satisfy certain other conditions set forth in Section 12.2 of the Credit Agreement;

WHEREAS, Waterman agrees to transfer on the Effective Date (as defined below) the Vessel to LCI pursuant to the bill of sale, dated as of [2014, between Waterman and LCI (the "Bill of Sale");

WHEREAS, Waterman wishes to assign to LCI all of its right, title, interest and obligations in, to and under the Transaction Documents (as defined below) including any of the exhibits, schedules or annexes thereto, in each case as amended hereby, or any other instrument or document executed in connection therewith and LCI wishes to assume all right, title, interest and obligations of Waterman in, to and under the Transaction Documents including any of the exhibits, schedules or annexes thereto, in each case as amended hereby, or any other instrument or document executed in connection therewith;

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.Assignment. Effective as of the Effective Date, Assignor hereby assigns to Assignee, without recourse and without representation or warranty (other than as expressly provided herein),  all  of Assignor's right, title, interest and obligations in, to and under the Transaction Documents  and  the Collateral described therein (whether arising prior to, on or following the Effective Date).

2.Assumption.   Effective as of the Effective Date, Assignee hereby assumes from Assignor all of Assignor's  right,  title,  interest  and  obligations  in, to  and under  the Transaction  Documents  and the Collateral described therein.   As of and after the Effective Date, (i) Assignee  shall be deemed to be the "Ultimate Borrower" for all purposes under the Credit Agreement and shall be subject to and shall benefit from all of the rights  and obligations  of the Borrower under the Credit Agreement  with the same force and effect as if it were an original signatory thereto and (ii) Assignee shall be deemed to be the "Pledgor" , "Assignor" or "Owner", as applicable, for all purposes under the applicable Transaction Documents, and, in each case, shall be subject to and shall benefit from all of the rights and obligations of the Pledgor or

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the  Assignor  or  "Owner",  as  applicable,  under  such  Transaction  Documents  with  the  same  force  and effect as if it were an original signatory thereto.

3.Release   of   Assignor;   Termination;    Several   Obligations.     Following  the  Effective  Date, Assignor shall be released from  all  of  its  right,  title,  interest  and  obligations  under  the  Transaction Documents and the Collateral described therein, except as otherwise provided herein.

4.Amendments to Credit Agreement. Pursuant to Section 19.7 of the Credit  Agreement, effective as of the Effective Date the Credit Agreement shall be amended as follows:

(a)Schedule [III and IV] of the Credit Agreement shall be replaced in its entirety by the corresponding schedule provided in Schedule [C] hereto

(b)

5.Effectiveness. Unless otherwise stated, this Agreement shall become effective as of the date when the Facility Agent confirms that it has received all of the documents and other evidence listed in and complying with the requirements of this Section 5 (such date, the "Effective Date"):

(a)a copy of each counterpart to this Agreement executed by Assignor, Assignee, the Guarantor, the Facility Agent and the Security Trustee; and

(b)such documents, instruments, certificates and other evidence as required to be delivered pursuant to Section 12.2(b) of the Credit Agreement and an officer's certificate certifying as to the satisfaction of all such requirements.

6.Representations and Warranties of the Security Parties.  Each of the Guarantor, Assignor  and Assignee represents and warrants to the Lenders, to the Facility Agent and to the Security Trustee that, as of the Effective Date:

(a)this Agreement and each other Transaction Document to which it is a party delivered in connection herewith has been duly authorized, executed and delivered by such Security Party, constitutes the legal, valid and binding obligations of such Security Party enforceable against it in accordance with its terms and the Credit Agreement, and will not violate the ce1iificate or articles of incorporation or bylaws of such Security Party, as applicable;

(b)the representations and warranties  set forth in Section 2 of the Credit Agreement are true and correct in all material respects on and as of the Effective Date with the same effect as though made on and as of the Effective Date, except to the extent such representations and warranties  expressly relate to an earlier date (in which case such representations and warranties were true and correct in all material respects as of such earlier date); and

(c)all approvals, authorizations, or other actions or filings necessary  for the validity or enforceability of its obligations under this Agreement and each other Transaction Document to which it is a party delivered in connection herewith have been obtained; and

(d)no Default or Event of Default has occurred and is continuing under any Transaction Document.

1  Insert other provisions from the final terms of the credit agreement that need to be amended

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7.Reaffirmation. The Guarantor hereby ratifies and reaffim1s as of the Effective Date its guarantee under Section 11 of the Credit Agreement and any other obligations under any of the Transaction Documents to which it is a party. Neither this Agreement nor any other agreement or matter relating hereto shall release, reduce or diminish the Guarantor's obligations to the Secured Parties under the Transaction Documents to which it is a party, or prejudice, alter or in any regard adversely affect the rights and remedies of any Creditor in respect thereof.

8.Reference to and Effect on the Transaction Documents.

(a)Except as expressly provided herein, all provisions, terms and conditions of the Credit Agreement and the other Transaction Documents shall remain in full force and effect.

(b)Nothing contained herein shall constitute a waiver of any other rights or remedies that the Facility Agent, Security Trustee or any Lender may have.

(c)As assigned, assumed and amended hereby, the Credit Agreement and each Transaction Document are ratified and confirmed in all respects. Whenever the "Credit Agreement" or a "Transaction Document" is referred to in the Credit Agreement, any other Transaction Document or any of the exhibits, schedules or annexes thereto or any other instrument or document executed in connection therewith, it shall be deemed to mean the Credit Agreement or such Transaction Document as assigned, assumed and amended hereby.

(d)The Security  Parties and the  Facility Agent hereby designate this Agreement as a Transaction Document.

9.Miscellaneous.

(a)No Other Amendments or Waivers. This Agreement shall not constitute an amendment or waiver of or consent to any provision of the Credit Agreement and the other Transaction Documents except as expressly stated herein and shall not be construed as an amendment, waiver or consent to any action on the part of the Security Parties that would require an amendment, waiver or consent of the Facility Agent or the Lenders except as expressly stated herein.

(b)Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(c)Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

(d)Counterparts. This Agreement may be executed in any number of separate counterparts by the parties hereto (including by telecopy or via electronic mail), each of which counterparts when so executed shall be an original, but all the counterparts shall together constitute one and the same instrument.

[Remainder of page  left blank intentionally; signatures follow  on next page. ]

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IN WITNESS  WHEREOF,  the parties hereto  have executed this Agreement  as of the date first above written.

WATERMAN  STEAMSHIP  CORPORATION

as Assignor

By:

Name:

Title:

LCI SHIPHOLDINGS, INC.

as Assignee

By:

Name:

Title:

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INTERNATIONAL  SHIPHOLDING  CORPORATION

as Guarantor

By:

Name:

Title:

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DVB BANK SE,

as Facility Agent, Security Trustee and Lender

By:

Name:

Title:

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SCHEDULE A

SCHEDULE III

Security Party Liens as of the Effective Date

[TO COME]

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SCHEDULE IV

Security Party Indebtedness  as of the Effective Date

[TO COME]

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EXHIBIT M  LOAN ADMINISTRATION   FORM

EXHIBIT M

To:        DVB BANK SE

Park House,

16-18 Finsbury Circus London EC2M 7EB

E-mail:  tls.london@dvbbank.com Fax: +44 207 256 4352

Attention: Peter Attridge

Department: Transaction and Loan Services July, 2014

Re: Providing financing to WATERMAN  STEAMSHIP CORPORATION  (the "Company") in relation to the Vessel "GREEN BAY" (the "Financing").

We refer to the Financing and a term loan credit agreement  (the "Credit Agreement") dated as of July

, 2014 and entered into between, inter alia, us, as borrower and DVB Bank SE as Facility Agent for and on behalf of the Lenders in relation to the Financing. Terms and expressions riot otherwise defined herein shall have the same meaning as defined in the Credit Agreement.

We hereby appoint the following persons to act as our point of contact with regards to any issue arising in connection with the administration of the Credit Agreement or any other documents related to the Financing:

1.Manuel G. Estrada - Vice President and Chief Financial Officer

2.David B. Drake - Vice President and Treasurer

3.Donna L. Johnson - Assistant Treasurer

No other persons (other than the Senior Officers of the Company listed above (the "Authorized Persons")) are hereby authorized to request any information from you regarding the Credit Agreement or any other matter related to the Financing or the Company or communicate with you in any way regarding the forgoing in and under any circumstances.

For the avoidance of doubt, the following are the Senior Officers of the Company:

1.	Niels M. Johnsen - Chairman
2.	Erik L. Johnsen - President
4.	Manuel G. Estrada -Vice-President and Chief Financial Officer
5.	David B. Drake -Vice-President and Treasurer
6.	Donna L. Johnson, Assistant Treasurer

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This list of authorized persons may only be amended, modified or varied  in writing by an Authorized Person with copy to the other Authorized Persons. We agree to indemnify you and hold you harmless in relation to any information you provide to any Authorized Person. This letter shall be governed and construed in accordance with New York law.

Yours sincerely,

[BORROWER]

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, " ': 

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EX-10.14

AMENDMENT NO. 1
TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF $38,500,000

dated August 26, 2014,

WATERMAN STEAMSHIP CORPORATION
as Borrower,

AND

The Banks and Financial Institutions listed on Schedule I thereto,

as Lenders,

AND

DVB BANK SE

as Mandated Lead Arranger, Facility Agent and as Security Trustee

AND

INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor

Dated as of October 28,  2014

AMENDMENT NO. 1 TO LOAN AGREEMENT

THIS AMENDMENT NO. 1 TO LOAN AGREEMENT (this "Amendment") is dated as of October 28, 2014, by and among (1) WATERMAN STEAMSHIP CORPORATION, a corporation organized and existing under the laws of the State of New York, as borrower (the "Borrower"), (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) DVB Bank SE and the other banks and financial institutions listed on Schedule I to the Facility Agreement (as defined below), as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Facility Agreement, as defined below, the "Lenders" and each a "Lender"), and (4) DVB BANK SE, ("DVB"), as facility agent (in such capacity including any successor thereto, the "Facility Agent"), as security trustee for the Lenders (in such capacity, the "Security Trustee" and, together with the Facility Agent, the "Agents"), and amends and is supplemental to the Senior Secured Facility Agreement dated as of August 26, 2014, entered into by and among the Borrower, the Guarantor, the Lenders and the Agents (the "Original Agreement" and as amended hereby, the "Facility Agreement").

WITNESSETH THAT:

WHEREAS, the Guarantor's outside auditors have notified the Guarantor of a change in their interpretation of how the gain from the sale of the Vessel by a subsidiary of the Guarantor pursuant to a sale/leaseback transaction should be treated after the Vessel was repurchased by the Borrower. This change in interpretation may, absent certain changes to the definition of Consolidated EBITDA, negatively impact the Guarantor's calculation of the financial covenant in Section 9.3 resulting in a breach thereof; and

WHEREAS, the Security Parties and the Creditors have agreed, inter alia, to amend the Original Agreement as follows.

NOW, THEREFORE, in consideration of the premises and such other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is hereby agreed as follows:

1. Definitions. Unless otherwise defined herein, words and expressions defined in the Original Agreement have the same meanings when used herein.

2. Representations and Warranties. Each of the Security Parties hereby reaffirms, as of the date hereof, each and every representation and warranty made thereby in the Original Agreement and the Note (updated mutatis mutandis).

3. No Defaults. Each of the Security Parties hereby represents and warrants that as of the date hereof there exists no Event of Default or any condition which has not been

disclosed to the Facility Agent in writing that, with the giving of notice or passage of time, or both, would constitute an Event of Default.

4. Performance of Covenants. Each of the Security Parties hereby reaffirms that it has duly performed and observed the covenants and undertakings set forth in the Original Agreement, the Note and the Security Documents on its part to be performed, and covenants and undertakes to continue duly to perform and observe such covenants and undertakings, other than as waived hereby, so long as the Facility Agreement, as may be amended or supplemented from time to time, shall remain in effect.

5. Amendments to the Original Agreement. Subject to the terms and conditions of this Amendment, the Original Agreement is hereby amended and supplemented as follows:

(a) All references to "this Agreement" shall be deemed to refer to the Original Agreement, as amended hereby; and

(b) The definition of "Consolidated EBITDA" in Section 1.1 of the Original Agreement is hereby amended and restated in its entirety as follows:

"'Consolidated EBITDA' shall mean, for any period, with respect to the Guarantor and its Subsidiaries, the sum of (without duplication) (a) Consolidated Net Income; (b) all Consolidated Interest Expenses of the Guarantor and its Subsidiaries; (c) income taxes of the Guarantor and its Subsidiaries; (d) depreciation and amortization of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP for. such period; and (e) the unamortized balance of the gain with respect to the sale of the vessel GREEN BAY pursuant to the sale/leaseback transaction that occurred on February 22, 2012, for the four rolling quarters commencing with the quarter ending September 30, 2014 and ending with the quarter ending June 30, 2015; provided, that if any Subsidiary is not wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (i) the amount of Consolidated Net Income attributable to such Subsidiary multiplied by (ii) the percentage ownership interest in the income of such Subsidiary not owned by the Guarantor on the last day of such period; provided, however, that if any acquisition or disposition of assets permitted to be made under this Agreement (other

2

than non-material acquisitions or dispositions in the ordinary course of business, each with a total value of less than $2,000,000) occurs during such period of determination, Consolidated EBITDA for such period shall be calculated on a pro forma basis to give effect to such acquisition or disposition as if each such acquisition or disposition has been consummated on the first day of such period; provided, further that Consolidated EBITDA based on any such acquisition shall only be based on contracted cash flow;".

6. No Other Amendment. All other terms and conditions of the Original Agreement shall remain in full force and effect and the Original Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

7. Conditions Precedent to the Effectiveness of this Amendment. The effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

(a) This Amendment. The Borrower and the Guarantor shall have duly executed and delivered this Amendment to the Facility Agent;

(b) Corporate Authority. The Facility Agent shall have received the following documents in form and substance satisfactory to the Facility Agent and its legal advisers:

i. copies, certified as true and complete by an officer of each of the Security Parties, of the resolutions of its board of directors and, with respect to the Borrower, shareholders evidencing approval the transactions contemplated hereby and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf; and

ii. copies, certified as true and complete by an officer of each of the Security Parties, of the certificate or articles of incorporation and by-laws or similar constituent documents thereof, which certificates may be in the form of bring down certificates as appropriate.

3

(c)Interest, Fees and Expenses Paid. The Facility Agent shall have received

payment in full of all interest, fees and expenses due under or in connection to the Original Agreement and this Amendment.

8. Other Documents. By the execution and delivery of this Amendment, the Security Parties and the Lenders hereby consent and agree that all references in the Note and the Security Documents to the Original Agreement shall be deemed to refer to the Original Agreement as amended by this Amendment. By the execution and delivery of this Amendment, each of the Security Parties hereby consents and agrees that each of the Note and any other documents that has been executed in connection with the Original Agreement and each of the Security Parties' obligations under the Original Agreement shall remain in full force and effect notwithstanding the amendments contemplated hereby.

9. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereof other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

10. Counterparts. This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall constitute but one and the same agreement.

11. Headings; Amendment. In this Amendment, section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Amendment. This Amendment cannot be amended other than by written agreement signed by the parties hereto.

[Signature Page Follows]

4

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly authorized representative on the day and year first above written.

WATERMAN STEAMSHIP CORPORATION as Borrower

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P - Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION, as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P - Treasurer

DVB BANK SE

as Facility Agent, Security Trustee and Lender

By:_____________________________________________________________________________________

Name: Title:

By: _____________________________________________________________________________________

Name: Title:

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly authorized representative on the day and year first above written.

WATERMAN STEAMSHIP CORPORATION as Borrower

By:_________________________________________________________________________________

Name: Title:

INTERNATIONAL SHIPHOLDING CORPORATION, as Guarantor

By:_________________________________________________________________________________

Name: Title:

DVB BANK SE

as Facility Agent, Security Trusteed Lender

By: /s/ Thibaud Ollivier

Name:Thibaud Ollivier

Title: Senior Vice President

By: /s/ Elk Schuppan

Name: Elk Schuppan

Title: Senior Vice President

EX-10.2

AMENDMENT NO. 2
TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED LOAN
OF UP TO US$55,200,000

dated August 2, 2010,

EAST GULF SHIPHOLDING, INC.,
as Borrower,

AND

The Banks and Financial Institutions listed on Schedule I thereto,

as Lenders,

AND

ING BANK N.V., LONDON BRANCH,
as Facility Agent and as Security Trustee

AND

INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor

Dated as of November 4, 2014

AMENDMENT NO. 2 TO FACILITY AGREEMENT

THIS AMENDMENT NO. 2 TO FACILITY AGREEMENT (this "Amendment") is dated as of November 4, 2014, by and among (1) EAST GULF SHIPHOLDING, INC., a corporation organized and existing under the laws of the Republic of the Marshall Islands, as borrower (the "Borrower"), (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Guarantor"), as guarantor, (3) the banks and financial institutions listed on Schedule Ito the Original Agreement (as defined below), as lenders (together with any bank or financial institution which becomes a Lender pursuant to Article 12 of the Facility Agreement, as defined below, the "Lenders" and each a "Lender") and (4) ING BANK N.V., LONDON BRANCH , as facility agent (in such capacity including any successor thereto, the "Facility Agent") and as security trustee for the Lenders (in such capacity, the "Security Trustee" and, together with the Facility Agent, the "Agents"), and amends and is supplemental to the Senior Secured Loan Facility Agreement dated as of August 2, 2010, entered into by and among the Borrower, the Guarantor, the Lenders and the Agents, as amended by Amendment No. 1 thereto dated as of September 19, 2013 (the "Original Agreement" and as further amended hereby, the "Facility Agreement").

WITNES SETH THAT:

WHEREAS, the Guarantor's outside auditors have notified the Guarantor of a change in their interpretation of how the gain from the sale of the vessel GREEN BAY (the "Vessel") by a subsidiary of the Guarantor pursuant to a sale/leaseback transaction should be treated after the Vessel was repurchased by such subsidiary. This change in interpretation may, absent certain changes to the definition of Consolidated EBITDA, negatively impact the Guarantor's calculation of the financial covenant in Section 9.3 resulting in a breach thereof; and

WHEREAS, the Security Parties and the Creditors have agreed, inter alia, to amend the Original Agreement as follows.

NOW, THEREFORE, in consideration of the premises and such other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is hereby agreed as follows:

1. Definitions. Unless otherwise defined herein, words and expressions defined in the Original Agreement have the same meanings when used herein.

2. Representations and Warranties. Each of the Security Parties hereby reaffirms, as of the date hereof, each and every representation and warranty made thereby in the Original Agreement and the Note (updated mutatis mutandis).

3. No Defaults. Each of the Security Parties hereby represents and warrants that as of the date hereof there exists no Event of Default or any condition which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

4. Performance of Covenants. Each of the Security Parties hereby reaffirms that it has duly performed and observed the covenants and undertakings set forth in the Original

Agreement, the Note and the Security Documents on its part to be performed, and covenants and undertakes to continue duly to perform and observe such covenants and undertakings, as amended hereby, so long as the Original Agreement, as may be amended or supplemented from time to time, shall remain in effect.

5. Confirmation of Guarantee. The Guarantor hereby reaffirms all of its obligations under Section 11 of the Original Agreement and confirms that such obligations shall remain in full force and effect following the effectiveness of this Amendment.

6. Confirmation of the security constituted by the Security Documents. Each Security Party hereby confirms that nothing in this Amendment shall adversely affect the security constituted by the Security Documents and its intention is that such security is and shall remain in full force and effect and shall extend to the obligations of the Borrower and the Guarantor under the Original Agreement notwithstanding the amendments to the Original Agreement pursuant to this Amendment and in each case such security shall extend to the obligations of the Borrower and the Guarantor under the Original Agreement as amended by this Amendment.

7. Waivers/Consents. Subject to the Security Parties' continued compliance with the provisions contained herein and in the Facility Agreement to the satisfaction of the Creditors in their sole discretion, the Creditors hereby (a) waive any default occurring under Section 8.1(m) of the Facility Agreement solely in connection with the Impairment Losses and (b) consent to the Sale and waive any breach of Section 9.2(i) of the Facility Agreement solely in connection with the Sale. The Creditors, solely in connection with the transactions described herein, hereby waive compliance with any other provision contained in the Facility Agreement pr the other Transaction Documents as may be necessary to give full effect to the waiver and consent set forth in this Section 5.

8. Amendments to the Original Agreement. Subject to the terms and conditions of this Amendment, the Original Agreement is hereby amended and supplemented as follows:

(a) All references to "this Agreement" shall be deemed to refer to the Original Agreement, as amended hereby; and

(b) The definition of "Consolidated EBITDA" in Section 1.1 of the Original Agreement is hereby amended and restated in its entirety as follows:

"'Consolidated EBITDA' shall mean, for any period, with respect to the Guarantor and its Subsidiaries, the sum of (without duplication) (a) Consolidated Net Income; (b) all Interest Expenses of the Guarantor and the Subsidiaries; (c) income taxes of the Guarantor and the Subsidiaries; (d) depreciation and amortization, as well as other non-cash charges to the extent they have been deducted from income, of the Guarantor and the Subsidiaries determined on a consolidated basis in accordance with GAAP for such period; and (e) the unamortized balance of the gain with respect to the sale of the vessel GREEN BAY pursuant to the sale/leaseback transaction that occurred on February 22, 2012, for the four rolling

2

quarters commencing with the quarter ending September 30, 2014 and ending with the quarter ending June 30, 2015; provided, that if any Subsidiary is not wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (i) the amount of Consolidated Net Income attributable to such Subsidiary multiplied by (ii) the percentage ownership interest in the income of such Subsidiary not owned by the Guarantor on the last day of such period, but adding back other non-cash charges to the extent they have been deducted from income in accordance with GAAP; provided, however, that if any acquisition or disposition of assets permitted to be made under this Agreement (other than non-material acquisitions or dispositions in the ordinary course of business, each with a total value of less than $2,000,000) occurs during such period of determination, Consolidated EBITDA for such period shall be calculated on a pro forma basis to give effect to such acquisition or disposition as if each such acquisition or disposition has been consummated on the first day of such period; provided, further that Consolidated EBITDA based on any such acquisition shall only be based on contracted cash flow;".

9. Fees and Expenses. The Borrower agrees to pay promptly upon demand therefor, all costs and expenses (including legal fees) incurred by the Lenders in connection with the preparation and execution of this Amendment.

10. No Other Amendment. All other terms and conditions of the Original Agreement shall remain in full force and effect and the Original Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

11. Conditions Precedent to the Effectiveness of this Amendment. The effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

(a) This Amendment. The Borrower and the Guarantor shall have duly executed and delivered this Amendment to the Facility Agent;

(b) Corporate Authority. The Facility Agent shall have received the following documents in form and substance satisfactory to the Facility Agent and its legal advisers:

i. copies, certified as true and complete by an officer of each of the Security Parties, of the resolutions of its board of directors and, with respect to the Borrower, shareholders evidencing approval the transactions contemplated hereby and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf;

3

ii. copies, certified as true and complete by an officer of each of the Security Parties, of the certificate or articles of incorporation and by-laws or similar constituent documents thereof, which certificates may be in the form of bring down certificates as appropriate;

iii. certificate of the jurisdiction of incorporation of each Security Party as to the good standing thereof; and

iv. a certificate signed by the Chairman, President, Chief Financial Officer, Vice President, Treasurer or Controller of each of the Security Parties to the effect that (A) no Default or Event of Default shall have occurred and be continuing and (B) the representations and warranties of such Security Party contained in the Original Agreement as amended hereby are true and correct as of the date of such certificate.

(c) Legal Opinions. The Facility Agent shall have received such legal opinions as it shall reasonably require.

(d) Interest, Fees and Expenses Paid. The Facility Agent shall have received payment in full of all interest, fees and expenses due under or in connection to the Original Agreement and this Amendment;

12. Other Documents. By the execution and delivery of this Amendment, the Security Parties and the Lenders hereby consent and agree that all references in the Note and the Security Documents to the Original Agreement shall be deemed to refer to the Original Agreement as amended by this Amendment. By the execution and delivery of this Amendment, each of the Security Parties hereby consents and agrees that each of the Note and any other documents that has been executed in connection with the Original Agreement and each of the Security Parties' obligations under the Original Agreement shall remain in full force and effect notwithstanding the amendments contemplated hereby.

13. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereof other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

14. Counterparts. This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall constitute but one and the same agreement.

15. Headings; Amendment. In this Amendment, section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Amendment. This Amendment cannot be amended other than by written agreement signed by the parties hereto.

4

[Signature Page Follows]

5

SK 02841 0011 6182556 v2

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly authorized representative on the day and year first above written.

EAST GULF SHIPHOLDING, INC.,

as Borrower

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P - Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P - Treasurer

ING BANK N.V., LONDON BRANCH, as Facility Agent, Security Trustee and Lender

By: /s/ Adam Byrne

Name: Adam Byrne

Title: Managing Director

By: /s/ Robartus Krol

Name: Robartus Krol

Title: Director

EX-10.4

AMENDMENT NO. 7
TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR. SECURED TERM LOAN
OF V5,102,500,000

dated January 23, 2008,

EAST GULF SHIPHOLDING, INC.
as Borrower,

AND

The Banks and Financial Institutions listed on Schedule I thereto,

as Lenders,

AND

DNB BANK ASA, NEW YORK BRANCH
as Facility Agent and as Security Trustee

AND

INTERNATIONAL. SHIPHOLDING CORPORATION,
as Guarantor

Dated as of October 31, 2014

AMENDMENT NO. 7 TO LOAN AGREE ME____

THIS AMENDMENT NO. 7 TO LOAN AGREEMENT (this "Amend n.ent") is dated as of October 31, 2014, by and among (1) EAST GULF SHIPHOLDING, INC., a corporation organized and existing under the laws of the Republic of the Marshall Islands, as borrower (the "Borrower"), (2) INTERNATIONAL SIIIPIIOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, as guarantor (the "Guarantor"), (3) DNB Capital LLC and the other banks and financial institutions listed on Schedule 1 to the Facility Agreement (as defined below), as lenders (together with any bank or financial institution which becomes a Lender pursuant to Article 11 of the Facility Agreement, as defined below, the "I...enders" and each a "Lender"), and (4) DNB BANK ASA, NIEW YORK BRANCH (formerly known as DnB NOR Bank ASA) ("DNB"), as facility agent (in such capacity including any successor thereto, the "Facility Agent"), as security trustee for the Lenders (in such capacity, the "Security_Trustee" and, together with the Facility Agent, the "Agents"), and amends and is supplemental to the Senior Secured Facility Agreement dated as of January 23, 2008, entered into by and among the Borrower, the Guarantor, the Lenders and the Agents, as amended by Amendment No. 1 thereto dated as of April 21, 2010, Amendment No. 2 thereto dated as of December 31, 2010, Amendment No. 3 thereto dated as of April 5, 2011, Amendment No. 4 thereto dated as of November 28, 2012, Amendment No. 5 thereto dated as of August 7, 2013, and Amendment No. 6 thereto dated as of August 26, 2014 (the "Original  Agreement" and as further amended hereby, the "Facility Agreement").

W TN ESSETH THAT:

WHEREAS, the Guarantor's outside auditors have notified the Guarantor of a change in their interpretation of how the gain on the sale of a vessel by a subsidiary of the Guarantor pursuant to a sale/leaseback transaction should be treated when such vessel is repurchased by such subsidiary. This change in interpretation may, absent certain changes to the definition of Consolidated EBITDA, negatively impact the Guarantor's calculation of the financial covenant in Section-9.3(a) resulting in a breach thereof; and

WHEREAS, the Security Parties and the Creditors have agreed, inter alia, to amend the Original Agreement as follows.

NOW, THEREFORE, in consideration of the premises and such other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is hereby agreed as follows:

L Definitions. Unless otherwise defined herein, words and expressions defined in the Original Agreement have the same meanings when used herein.

2. Representations and Warranties.Each of the Security Parties hereby
reaffirms, as of the date hereof, each and every representation and warranty made thereby in the Original Agreement and the Note (updated matatis mutandis).

3. No Defaults. Each of the Security Parties hereby represents and warrants that as of the date hereof there exists no Event of Default or any condition which, with the giving of notice or passage of title, or both, would constitute an Event of Default.

4. Performance of Covenants. Each of the Security Parties hereby reaffirms that it has duly performed and observed the covenants and undertakings set forth in the Original Agreement, the Note and the Security Documents on its part to be performed, and covenants and undertakes to continue duly to perform and observe such covenants and undertakings, other than as waived hereby, so long as the Facility Agreement, as may be amended or supplemented from time to time, shall remain in effect.

5, Amendments to the Original Agreement. Subject to the terms and conditions of this Amendment, the Original Agreement is hereby amended and supplemented as follows:

(a) All references to "this Agreement" shall be deemed to refer to the Original Agreement, as amended hereby;

(b) Section 9.3(a) of the Original Agreement is hereby amended and restated in its entirety as follows:

"(a) Consolidated -Indebtedness to Consolidated EBT.TDAR. Ratio. Maintain, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than (i) 5.00:1:00 from July 1, 2014 through December 31, 2015; (ii) 4.75:1.00 from .January 1, 2016 through March 31, 2016 (iii) 4.50:1.00 from April 1, 2016 through September 30, 2016 and (iv) 4,25:1 ,00 at all times thereafter, as measured at the end of each fiscal quarter based on the .four most recent fiscal quarters for which financial information is available."; and

(c) Section 9.3(0 of the Original Agreement is hereby amended and restated in its entirety as follows:

"(1) Minimum Consolidated Fixed Charge Coverage Ratio. Maintain a Consolidated Fixed Charge Coverage Ratio of at least (1) 1.10:1.00, beginning with the fiscal quarter ending September 30, 2014 through the 2

fiscal quarter ending December 31, 2014, (ii) 1.15:1.00, beginning with the fiscal quarter ending March 31, 2015 through the fiscal quarter ending December 31, 2015, (iii) 1.20:1.00, beginning with the fiscal quarter ending March 31, 2016 through the fiscal quarter ending June 30, 2016, and (iv) 1:25:1.00 thereafter, measured at the end of each fiscal quarter based on the four most recent fiscal quarters for which financial information is available.",

6. No Other Amendment. All other terms and conditions of the Original Agreement shall remain in full force and effect and. the Original Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

7. Conditions Precedent to the Effectiveness of this Amendment.The
effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

(a) This Amendment. The Borrower and the Guarantor shall have duly executed and delivered this Amendment to the Facility Agent;

(b) Corporate Authority. The Facility Agent shall have received the following documents in form and substance satisfactory to the Facility Agent and its legal advisers:

i. copies, certified as time and complete by an officer of each of the Security Parties, of the resolutions of its board of directors and, with respect to the Borrower, shareholders evidencing approval the transactions contemplated hereby and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf;

ii. copies, certified as true and complete by an officer of each of the Security Parties, of the certificate or articles of incorporation and by-laws or similar constituent documents

thereof, which certificates may be in the form of bring down certificates as appropriate;

iii. certificate of the jurisdiction of incorporation of each Security Party as to the good standing thereof; and

iv. a certificate signed by the Chairman, President, Chief Financial Officer, Vice President, Treasurer or Controller of each of the Security -Parties to the effect that (A) no Default or Event of Default shall have occurred and be continuing and (13) the representations and warranties of such Security Party contained in the Original Agreement as Amended hereby are true and correct as of the date of such certificate.

(c) Legal Opinions. The Facility Agent shall have received such legal opinions as it shall reasonably require.

(d) Interest Fees and Expenses Paid. The Facility Agent shall have received payment in full of all interest, fees and expenses due under or in connection to the Original Agreement and this Amendment.

8. Other Documents. By the execution and delivery of this Amendment, the Security Parties and the Lenders hereby consent and agree that all references in the Note and the Security Documents to the Original Agreement shall be deemed to refer to the Original Agreement as amended by this Amendment. By the execution and delivery of this Amendment, each of the Security Parties hereby consents and agrees that each of the Note and any other documents that has been executed in connection with the Original Agreement and each of the Security Parties' obligations under the Original Agreement shall remain in 11111 force and effect notwithstanding the amendments contemplated hereby.

9. Governing_. Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereof other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

10. Counterparts. This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall constitute but one and the same agreement.

11. Headings; Amendment. In this Amendment, section headings arc inserted for convenience of reference only and shall be ignored in the interpretation of this Amendment. This Amendment cannot be amended other than by written agreement signed by the parties hereto.

DNB BANK ASA, NEW YORK BRANCH, as Facility Agent and Security Trustee

By: /s/ Cathleen Buckley

Name: Cathleen Buckley

Title: Senior Vice President

By:. /s/ Stian Lovseth

Name: Stian Lovseth

Title:First Vice President

DNB CAPITAL LLC,

as Lender

By: /s/ Cathleen Buckley

Name: Cathleen Buckley

Title: Senior Vice President

By: /s/ Stian Lovseth

Name:Stian Lovseth

Title:First Vice President

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly authorized representative on the day and year first above written,

EAST GULF SHIPHOLDING, INC., as Borrower

By: /s/ D.B. Drake

Name: D.B. Drake

Title: VP - Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: VP - Treasurer

EX-10.6

AMENDMENT NO. 2
TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF UP TO US$47,500,000

dated June 20, 2011,

DRY BULK AMERICAS LTD.
and
DRY BULK AUSTRALIA LTD.,
as Joint and Several Borrowers,

AND

The Banks and Financial Institutions listed on Schedule I thereto,

as Lenders,

AND

ING BANK N.V., LONDON BRANCH,
as Facility Agent and as Security Trustee

AND

INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor

Dated as of November 4, 2014

AMENDMENT NO. 2 TO FACILITY AGREEMENT

THIS AMENDMENT NO. 2 TO FACILITY AGREEMENT (this "Amendment") is dated as of November 4, 2014, by and among (1) DRY BULK AMERICAS LTD., a corporation organized and existing under the laws of the British Virgin Islands ("Dry Bulk Americas") and DRY BULK AUSTRALIA LTD., a corporation organized and existing under the laws of the British Virgin Islands ("Dry Bulk Australia"), as joint and several borrowers (the "Borrowers", and each individually a "Borrower"), (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Guarantor"), as guarantor, (3) the banks and financial institutions listed on Schedule Ito the Original Agreement (as defined below), as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 12 of the Facility Agreement, as defined below, the "Lenders" and each a "Lender") and (4) ING BANK N.V., LONDON BRANCH , as facility agent (in such capacity including any successor thereto, the "Facility Agent") and as security trustee for the Lenders (in such capacity, the "Security Trustee" and, together with the Facility Agent, the "Agents"), and amends and is supplemental to the Senior Secured Term Loan Facility Agreement dated as of June 20, 2011, entered into by and among the Borrowers, the Guarantor, the Lenders and the Agents, as amended by Amendment No. 1 thereto dated as of September 19, 2013 (the "Original Agreement" and as further amended hereby, the "Facility Agreement").

WITNESSETH THAT:

WHEREAS, the Guarantor's outside auditors have notified the Guarantor of a change in their interpretation of how the gain from the sale of the vessel GREEN BAY ("GREEN BAY") by a subsidiary of the Guarantor pursuant to a sale/leaseback transaction should be treated after GREEN BAY was repurchased by such subsidiary. This change in interpretation may, absent certain changes to the definition of Consolidated EBITDA, negatively impact the Guarantor's calculation of the financial covenant in Section 9.3 resulting in a breach thereof; and

WHEREAS, the Security Parties and the Creditors have agreed, inter alia, to amend the Original Agreement as follows.

NOW, THEREFORE, in consideration of the premises and such other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is hereby agreed as follows:

1. Definitions. Unless otherwise defined herein, words and expressions defined in the Original Agreement have the same meanings when used herein.

2. Representations and Warranties. Each of the Security Parties hereby reaffirms, as of the date hereof, each and every representation and warranty made thereby in the Original Agreement and the Note (updated mutatis mutandis).

3. No Defaults. Each of the Security Parties hereby represents and warrants that as of the date hereof there exists no Event of Default or any condition which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

4. Performance of Covenants. Each of the Security Parties hereby reaffirms that it has duly performed and observed the covenants and undertakings set forth in the Original Agreement, the Note and the Security Documents on its part to be performed, and covenants and undertakes to continue duly to perform and observe such covenants and undertakings, as amended hereby, so long as the Original Agreement, as may be amended or supplemented from time to time, shall remain in effect.

5. Confirmation of Guarantee. The Guarantor hereby reaffirms all of its obligations under Section 11 of the Original Agreement and confirms that such obligations shall remain in full force and effect following the effectiveness of this Amendment.

6. Confirmation of the security constituted by the Security Documents. Each Security Party hereby confirms that nothing in this Amendment shall adversely affect the security constituted by the Security Documents and its intention is that such security is and shall remain in full force and effect and shall extend to the obligations of the Borrowers and the Guarantor under the Original Agreement notwithstanding the amendments to the Original Agreement pursuant to this Amendment and in each case such security shall extend to the obligations of the Borrowers and the Guarantor under the Original Agreement as amended by this Amendment.

7. Waivers/Consents. Subject to the Security Parties' continued compliance with the provisions contained herein and in the Facility Agreement to the satisfaction of the Creditors in their sole discretion, the Creditors hereby (a) waive any default occurring under Section 8.1(m) of the Facility Agreement solely in connection with the Impairment Losses and (b) consent to the Sale and waive any breach of Section 9.2(i) of the Facility Agreement solely in connection with the Sale. The Creditors, solely in connection with the transactions described herein, hereby waive compliance with any other provision contained in the Facility Agreement or the other Transaction Documents as may be necessary to give full effect to the waiver and consent set forth in this Section 5.

8. Amendments to the Original Agreement. Subject to the terms and conditions of this Amendment, the Original Agreement is hereby amended and supplemented as follows:

(a) All references to "this Agreement" shall be deemed to refer to the Original Agreement, as amended hereby; and

(b) The definition of "Consolidated EBITDA" in Section 1.1 of the Original Agreement is hereby amended and restated in its entirety as follows:

"'Consolidated EBITDA' shall mean, for any period, with respect to the Guarantor and its Subsidiaries, the sum of (without duplication) (a) Consolidated Net Income; (b) all Interest Expenses of the Guarantor and the Subsidiaries; (c) income taxes of the Guarantor and the Subsidiaries; (d) depreciation and amortization, as well as other non-cash charges to the extent they have been deducted from income, of the Guarantor and the Subsidiaries determined on a consolidated basis in accordance with GAAP for such period; and (e) the unamortized balance of the gain with respect

2

to the sale of the vessel GREEN BAY pursuant to the sale/leaseback transaction that occurred on February 22, 2012, for the four rolling quarters commencing with the quarter ending September 30, 2014 and ending with the quarter ending June 30, 2015; provided, that if any Subsidiary is not wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (i) the amount of Consolidated Net Income attributable to such Subsidiary multiplied by (ii) the percentage ownership interest in the income of such Subsidiary not owned by the Guarantor on the last day of such period, but adding back other non-cash charges to the extent they have been deducted from income in accordance with GAAP; provided, however, that if any acquisition or disposition of assets permitted to be made under this Agreement (other than non-material acquisitions or dispositions in the ordinary course of business, each with a total value of less than $2,000,000) occurs during such period of determination, Consolidated EBITDA for such period shall be calculated on a pro forma basis to give effect to such acquisition or disposition as if each such acquisition or disposition has been consummated on the first day of such period; provided, further that Consolidated EBITDA based on any such acquisition shall only be based on contracted cash flow;".

9. Fees and Expenses. The Borrowers agree to pay promptly upon demand therefor, all costs and expenses (including legal fees) incurred by the Lenders in connection with the preparation and execution of this Amendment.

10. No Other Amendment. All other terms and conditions of the Original Agreement shall remain in full force and effect and the Original Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

11. Conditions Precedent to the Effectiveness of this Amendment.The
effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

(a) This Amendment. The Borrowers and the Guarantor shall have duly executed and delivered this Amendment to the Facility Agent;

(b) Corporate Authority. The Facility Agent shall have received the following documents in form and substance satisfactory to the Facility Agent and its legal advisers:

i. copies, certified as true and complete by an officer of each of the Security Parties, of the resolutions of its board of directors and, with respect to the Borrowers, shareholders evidencing approval the transactions contemplated hereby and authorizing an appropriate officer or officers or

3

attorney-in-fact or attorneys-in-fact to execute the same on its behalf;

ii. copies, certified as true and complete by an officer of each of the Security Parties, of the certificate or articles of incorporation and by-laws or similar constituent documents thereof, which certificates may be in the form of bring down certificates as appropriate;

iii. certificate of the jurisdiction of incorporation of each Security Party as to the good standing thereof; and

iv. a certificate signed by the Chairman, President, Chief Financial Officer, Vice President, Treasurer or Controller of each of the Security Parties to the effect that (A) no Default or Event of Default shall have occurred and be continuing and (B) the representations and warranties of such Security Party contained in the Original Agreement as amended hereby are true and correct as of the date of such certificate.

(c) Legal Opinions. The Facility Agent shall have received such legal opinions as it shall reasonably require.

(d) Interest, Fees and Expenses Paid. The Facility Agent shall have received payment in full of all interest, fees and expenses due under or in connection to the Original Agreement and this Amendment;

12. Other Documents. By the execution and delivery of this Amendment, the Security Parties and the Lenders hereby consent and agree that all references in the Note and the Security Documents to the Original Agreement shall be deemed to refer to the Original Agreement as amended by this Amendment. By the execution and delivery of this Amendment, each of the Security Parties hereby consents and agrees that each of the Note and any other documents that has been executed in connection with the Original Agreement and each of the Security Parties' obligations under the Original Agreement shall remain in full force and effect notwithstanding the amendments contemplated hereby.

13. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereof other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

14. Counterparts. This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall constitute but one and the same agreement.

4

15. Headings; Amendment. In this Amendment, section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Amendment. This Amendment cannot be amended other than by written agreement signed by the parties hereto.

[Signature Page Follows]

5

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly authorized representative on the clay and year first above written.

DRY BULK AMERICAS LTD.,

as Borrower

By: /s/ Erik L. Johnsen

Name: Erik L. Johnsen

Title: Director

DRY BULK AUSTRAL LTD.,

as Borrower

By: /s/ Erik L. Johnsen

Name: Erik L. Johnsen

Title: Director

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: V/P - Treasurer

ING BANK N.V., LONDON BRANCH, as Facility Agent, Security Trustee and Lender

By: /s/ Adam Byrne

Name: Adam Byrne

Title: Managing Director

By: /s/ Robartus Krol

Name: Robartus Krol

Title: Director

EX-31.1

EXHIBIT  31.1

CERTIFICATION

I, Niels M. Johnsen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Shipholding Corporation;

2. Based on my knowledge, thisquarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this reportany change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a) All significant deficiencies and material weaknessesin the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2014

/s/ Niels M. Johnsen

______________________________
Niels M. Johnsen
Chairman of the Board of Directors and Chief Executive Officer

International Shipholding Corporation

EX-31.2

EXHIBIT  31.2

CERTIFICATION

I, Manuel G. Estrada, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Shipholding Corporation;

2. Based on my knowledge, this quarterlyreport does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this reportany change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control overfinancial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2014

/s/ Manuel G. Estrada

______________________________
Manuel G. Estrada
Vice President and Chief Financial Officer

International Shipholding Corporation

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of International Shipholding Corporation (the “Company”) for the period ending September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), NielsM. Johnsen, as Chairman and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the requirements of Section 13a or 15d of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 7, 2014

/s/ NielsM. Johnsen

_______________________________

Niels M. Johnsen

Chairman of the Board of Directors and

Chief Executive Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of International Shipholding Corporation (the “Company”) for the period ending September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Manuel G. Estrada, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the requirements of Section 13a or 15d of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 7, 2014

/s/ Manuel G. Estrada

____________________________________

Manuel G. Estrada

Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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Changes In Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2014

Changes In Accumulated Other Comprehensive Loss [Abstract]

Changes In Accumulated Other Comprehensive Loss By Component

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance July 1, 2014		$	(4,314)	$	(397)	$	(9,066)	$	(13,777)
	Other comprehensive income (loss)
	before reclassification		850		(84)		-		766
	Amount reclassified from accumulated
	other comprehensive income (loss)		(393)		-		74		(319)
Net current-period other
comprehensive income (loss)			457		(84)		74		447
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance June 30, 2013		$	(5,844)	$	(104)	$	(16,623)	$	(22,571)
	Other comprehensive income
	before reclassification		3,275		(307)		-		2,968
	Amount reclassified from accumulated
	other comprehensive income		(2,495)		-		306		(2,189)
Net current-period other
comprehensive income (loss)			780		(307)		306		779
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2014		$	(4,279)	$	(414)	$	(9,217)	$	(13,910)
	Other comprehensive income (loss)
	before reclassification		1,643		(67)		-		1,576
	Amount reclassified from accumulated
	other comprehensive income (loss)		(1,221)		-		225		(996)
Net current-period other
comprehensive income (loss)			422		(67)		225		580
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2013		$	(7,352)	$	(350)	$	(17,244)	$	(24,946)
	Other comprehensive income
	before reclassification		4,070		(61)		-		4,009
	Amount reclassified from accumulated
	other comprehensive income		(1,782)		-		927		(855)
Net current-period other
comprehensive income (loss)			2,288		(61)		927		3,154
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications Out Of Accumulated Other Comprehensive Loss

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(426)	Interest expense
	Foreign exchange contracts		33	Other revenues
			(393)	Total before tax
			-	Tax (expense) or benefit
			(393)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		24	A&G Expense
	Actuarial losses		76	A&G Expense
			100	Total before tax
			(26)	Tax (expense) or benefit
			74	Net of tax
Total reclassifications for the period		$	(319)	Net of tax

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(2,444)	Interest expense
	Foreign exchange contracts		(51)	Other revenues
			(2,495)	Total before tax
			-	Tax (expense) or benefit
			(2,495)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		25	A&G Expense
	Actuarial losses		281	A&G Expense
			306	Total before tax
			-	Tax (expense) or benefit
			306	Net of tax
Total reclassifications for the period		$	(2,189)	Net of tax

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,105)	Interest expense
	Foreign exchange contracts		(116)	Other revenues
			(1,221)	Total before tax
			-	Tax (expense) or benefit
			(1,221)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		73	A&G Expense
	Actuarial losses		227	A&G Expense
			300	Total before tax
			(75)	Tax (expense) or benefit
			225	Net of tax
Total reclassifications for the period		$	(996)	Net of tax

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,796)	Interest expense
	Foreign exchange contracts		14	Other revenues
			(1,782)	Total before tax
			-	Tax (expense) or benefit
			(1,782)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		75	A&G Expense
	Actuarial losses		852	A&G Expense
			927	Total before tax
			-	Tax (expense) or benefit
			927	Net of tax
Total reclassifications for the period		$	(855)	Net of tax

XML

Employee Benefit Plans (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Employee Benefit Plans [Abstract]
Contribution to pension plan	$ 450,000

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Investment In Unconsolidated Entities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014 item	Sep. 30, 2013
Schedule of Equity Method Investments [Line Items]
Payment for investment in Unconsolidated Entities	$ 7,887	$ 500
Number of vessels immediately employed on long-term bareboat charters	4
Saltholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Equity investee ownership interest	30.00%
Payment for investment in Unconsolidated Entities	5,900
Brattholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Equity investee ownership interest	30.00%
Payment for investment in Unconsolidated Entities	$ 2,000
Brattholmen Shipping Ltd. [Member] | Asphalt Tankers [Member]
Schedule of Equity Method Investments [Line Items]
Number of vessels owned or operated	2

XML

Stockholders' Equity (Issuer Purchases Of Equity Securities) (Details) (USD $)	1 Months Ended			3 Months Ended	12 Months Ended
	Sep. 30, 2014	Aug. 31, 2014	Jul. 31, 2014	Jun. 30, 2010	Dec. 31, 2008
Stockholders' Equity [Abstract]
Total number of shares purchased (in shares)				223,051	491,572
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plan
Maximum Number of Shares that May Yet Be Purchased Under the Plan (in shares)	285,377	285,377	285,377

XML

Employee Benefit Plans (Components Of Net Periodic Benefit Cost) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 155	$ 124	$ 464	$ 504
Interest cost	381	330	1,143	1,002
Expected return on plan assets	(571)	(560)	(1,797)	(1,674)
Amortization of prior service cost	(1)	(1)	(2)	(3)
Amortization of Net Loss	32	220	96	666
Net periodic benefit cost (benefit)	(4)	113	(96)	495
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	4	6	11	18
Interest cost	144	119	433	357
Amortization of prior service cost	25	25	75	75
Amortization of Net Loss	44	63	131	189
Net periodic benefit cost (benefit)	$ 217	$ 213	$ 650	$ 639

XML

Prior Period Revision (Schedule Of Financial Statement Line Items Impacted By Revisions By More Than 1%) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Provision (Benefit) for Income Taxes	$ 1,141	$ 18	$ 912	$ 68	$ (12,268)
Net Income	(2,565)	(2,222)	(6,446)	1,290	18,532
Comprehensive Income	(2,118)	(1,443)	(5,866)	4,445	29,538
% Impact					2.54%
% Impact					2.07%
% Impact					1.20%
Restatement Adjustment [Member]
Provision (Benefit) for Income Taxes					(305)
Net Income					375
Comprehensive Income					375
As Previously Reported [Member]
Provision (Benefit) for Income Taxes					(11,963)
Net Income					18,157
Comprehensive Income					$ 29,163

XML

Operating Segments (Reconciliation Of The Totals Reported For The Operating Segments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Operating Segments [Abstract]
Total Revenues	$ 74,410	$ 77,938	$ 223,856	$ 233,959
Voyage Expenses	61,629	64,832	187,586	195,931
Gross Voyage Profit	12,605	12,746	35,906	37,323
Vessel Depreciation	6,290	6,130	19,528	17,705
Other Depreciation	18	17	54	51
Gross Profit	6,297	6,599	16,324	19,567
Administrative and General Expenses	5,398	4,994	16,209	16,597
Loss on Sale of Other Assets	1	6	1	6
Less: Net Loss of Unconsolidated Entities	(176)	(360)	(364)	(705)
Total Other Operating Expenses	5,223	4,640	15,846	15,898
Operating Income	$ 1,074	$ 1,959	$ 478	$ 3,669

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2014

Employee Benefit Plans [Abstract]

Components Of Net Periodic Benefit Cost

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Three Months Ended September 30,				Three Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	155	$	124	$	4	$	6
Interest cost		381		330		144		119
Expected return on plan assets		(571)		(560)		-		-
Amortization of prior service cost		(1)		(1)		25		25
Amortization of Net Loss		32		220		44		63
Net periodic benefit cost (benefit)	$	(4)	$	113	$	217	$	213

The following table provides the components of net periodic benefit cost for our pension plan and postretirement benefits plan for the nine months ended September 30, 2014 and 2013:

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Nine Months Ended September 30,				Nine Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	464	$	504	$	11	$	18
Interest cost		1,143		1,002		433		357
Expected return on plan assets		(1,797)		(1,674)		-		-
Amortization of prior service cost		(2)		(3)		75		75
Amortization of Net Loss		96		666		131		189
Net periodic benefit cost (benefit)	$	(96)	$	495	$	650	$	639

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Early Lease Buy Out (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Feb. 22, 2012
Vessel repurchased, amount	$ 55.6
Unamortized deferred gain recorded as reduction in cost basis of purchased asset	11.2
Wells Fargo Bank Northwest [Member]
Lease agreement term for 2007 PCTC vessel	10 years
Gain on sale-leaseback		$ 14.9

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Changes In Accumulated Other Comprehensive Loss (Changes In Accumulated Other Comprehensive Loss By Component) (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (13,777,000)		$ (22,571,000)		$ (13,910,000)		$ (24,946,000)
Other comprehensive income (loss) before reclassification	766,000		2,968,000		1,576,000		4,009,000
Amount reclassified from accumulated other comprehensive income (loss)	(319,000)		(2,189,000)		(996,000)		(855,000)
Net current-period other comprehensive income (loss)	447,000		779,000		580,000		3,154,000
Ending balance	(13,330,000)		(21,792,000)		(13,330,000)		(21,792,000)
Gains And Losses On Derivatives Fair Value [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(4,314,000)	[1]	(5,844,000)	[2]	(4,279,000)	[1]	(7,352,000)	[2]
Other comprehensive income (loss) before reclassification	850,000	[1]	3,275,000	[2]	1,643,000	[1]	4,070,000	[2]
Amount reclassified from accumulated other comprehensive income (loss)	(393,000)	[1]	(2,495,000)	[2]	(1,221,000)	[1]	(1,782,000)	[2]
Net current-period other comprehensive income (loss)	457,000	[1]	780,000	[2]	422,000	[1]	2,288,000	[2]
Ending balance	(3,857,000)	[1]	(5,064,000)	[2]	(3,857,000)	[1]	(5,064,000)	[2]
Unrealized Translation (Loss) Income [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(397,000)		(104,000)		(414,000)		(350,000)
Other comprehensive income (loss) before reclassification	(84,000)		(307,000)		(67,000)		(61,000)
Net current-period other comprehensive income (loss)	(84,000)		(307,000)		(67,000)		(61,000)
Ending balance	(481,000)		(411,000)		(481,000)		(411,000)
Defined Benefit Pension Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(9,066,000)		(16,623,000)		(9,217,000)		(17,244,000)
Amount reclassified from accumulated other comprehensive income (loss)	74,000		306,000		225,000		927,000
Net current-period other comprehensive income (loss)	74,000		306,000		225,000		927,000
Ending balance	(8,992,000)		(16,317,000)		(8,992,000)		(16,317,000)
Oslo Bulk, AS [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest rate swap fair value	$ (461,000)		$ (717,000)		$ (461,000)		$ (717,000)
Ownership percentage (in hundredths)	25.00%		25.00%		25.00%		25.00%

[1] The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

[2] The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

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Derivative Instruments (Notional And Fair Value Of Derivative Instruments) (Details)	3 Months Ended
	Sep. 30, 2014 USD ($)	Dec. 31, 2013 JPY (¥)	Sep. 30, 2014 Designated as Hedging Instrument [Member] USD ($)	Sep. 30, 2014 Interest Rate Swap - LT [Member] USD ($)		Sep. 30, 2014 Interest Rate Swap - LT [Member] JPY (¥)	Sep. 30, 2014 Other Liabilities [Member] Interest Rate Swap - LT [Member] USD ($)		Sep. 30, 2014 Other Current Assets [Member] Foreign Exchange Contracts [Member] USD ($)	Sep. 30, 2014 Current Liabilities [Member] Foreign Exchange Contracts [Member] USD ($)	Sep. 30, 2014 Oslo Bulk, AS [Member] USD ($)	Sep. 30, 2013 Oslo Bulk, AS [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives, current notional amount	$ 31,231,000								$ 31,231,000
Liability derivatives, current notional amount				42,000,000	[1]
Derivatives, current notional amount		3,300,000,000	73,231,000
Asset derivatives, fair value			7,000						7,000
Liability derivatives, fair value			(5,377,000)				(5,262,000)	[1]		(115,000)
Exchange rate		102.53				109.65
Original funding of vessel's delivery cost (in hundredths)	80.00%
Revised funding of vessel's delivery cost (in hundredths)	65.00%
Reduction in funding of vessel's delivery cost (in hundredths)	15.00%
Change in fair value related to ineffective portion of derivative instrument, gain	89,000
Negative balance related to an interest rate swap in Oslo Bulk AS											$ 461,000
Ownership percentage (in hundredths)											25.00%	25.00%

[1] We have outstanding a variable-to-fixed interest rate swap with respect to a Yen-based facility for the financing of a PCTC delivered in March 2010. The notional amount under this contract is $42.0 million (based on a Yen to USD exchange rate of 109.65 as of September 30, 2014). With the bank exercising its option to reduce the underlying Yen loan from 80% to 65% funding of the vessel’s delivery cost, the 15% reduction represents the ineffective portion of this swap, which consists of the portion of the derivative instrument that is no longer supported by underlying borrowings. The change in fair value related to the ineffective portion of this swap is reflected in our statement of income (loss) for the third quarter of 2014 as an $89,000 gain. The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap associated with our 25% investment in Oslo Bulk AS.

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Fair Value Measurements (Details) (USD $)	Sep. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	$ 7,000
Derivative Liabilities	(5,377,000)
Long-term Debt	254,700,000
Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	7,000
Derivative Liabilities	$ (5,377,000)

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Prior Period Revision (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended			12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013 item	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Maximum [Member]	Dec. 31, 2013 Restatement Adjustment [Member]
Number of previously uncorrected misstatements		3
Pre-tax income	$ (1,248)		$ (1,844)	$ (5,170)	$ 2,063		$ 70,000
Decrease to short term note receivable due to revision	3,204	3,987		3,204			(275,000)
Increase to long term note receivable due to revision	25,256	27,659		25,256			275,000
Increase in long-term deferred tax assets due to revision	8,866	7,325		8,866			305,000
Decrease to deferred income tax expense due to revision				912			(305,000)
Increase to retained earnings due to revision	$ 210,549	$ 226,480		$ 210,549			$ 375,000
Percentage of impact of revisions to line items						1.00%

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Stockholders' Equity (Cash Dividends Paid) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended			9 Months Ended		1 Months Ended
	Sep. 04, 2014 Common Stock [Member]	Jun. 03, 2014 Common Stock [Member]	Mar. 03, 2014 Common Stock [Member]	Sep. 30, 2014 Common Stock [Member]	Sep. 30, 2014 Preferred Stock [Member]	Jul. 31, 2014 9.50% Series A Preferred Stock [Member] Preferred Stock [Member]	Apr. 30, 2014 9.50% Series A Preferred Stock [Member] Preferred Stock [Member]	Jan. 30, 2014 9.50% Series A Preferred Stock [Member] Preferred Stock [Member]	Jul. 31, 2014 9.00% Series B Preferred Stock [Member] Preferred Stock [Member]	Apr. 30, 2014 9.00% Series B Preferred Stock [Member] Preferred Stock [Member]	Jan. 30, 2014 9.00% Series B Preferred Stock [Member] Preferred Stock [Member]
Dividends Payable [Line Items]
Record Date	Aug. 15, 2014	May 16, 2014	Feb. 17, 2014			Jul. 29, 2014	Apr. 29, 2014	Jan. 29, 2014	Jul. 29, 2014	Apr. 29, 2014	Jan. 29, 2014
Payment Date	Sep. 04, 2014	Jun. 03, 2014	Mar. 03, 2014			Jul. 30, 2014	Apr. 30, 2014	Jan. 30, 2014	Jul. 30, 2014	Apr. 30, 2014	Jan. 30, 2014
Per Share Amount (in dollars per share)	$ 0.250	$ 0.250	$ 0.250			$ 2.375	$ 2.375	$ 2.375	$ 2.250	$ 2.250	$ 2.250
Total Dividend Paid	$ 1,825	$ 1,826	$ 1,813	$ 5,464	$ 3,916	$ 594	$ 594	$ 594	$ 711	$ 711	$ 712

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2014

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

Note 19.  New Accounting Pronouncements

In May 2014, the Financial Accounting Standard Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers”, to amend Accounting Standards Codification Topic 605, “Revenue Recognition”.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for annual reporting periods beginning on or after December 15, 2016.  Early adoption is not permitted.  We are currently evaluating the impact of the adoption of this standard.

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation”, to give explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award.  ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015.  Earlier adoption is permitted.  The effective date is the same for both public business entities and all other entities.  We are currently evaluating the impact of the adoption of this standard.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern”, to give explicit guidance on managements’ requirement to analyze whether there areconditions or events, considered in the aggregate, that raise substantial doubtabout the entity’s ability to continue as a going concern within one year after thedate that the financial statements are issued (or within one year after the datethat the financial statements are available to be issued when applicable).  ASU 2014-15 are effective for the annual period ending afterDecember 15, 2016, and for annual periods and interim periods thereafter. Earlyapplication is permitted.  We are currently evaluating the impact of the adoption of this standard.

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Goodwill, Other Intangible Assets, And Deferred Charges (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Goodwill, Other Intangible Assets, And Deferred Charges [Abstract]
Definite Life Intangibles, Amortization	$ 1,029	$ 1,521	$ 3,087	$ 4,669
Amortization expense for deferred charges	$ 5,700	$ 3,300	$ 14,615	$ 7,525

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Prior Period Revision (Tables)

9 Months Ended

Sep. 30, 2014

Prior Period Revision [Abstract]

Schedule Of Financial Statement Line Items Impacted By Revisions By More Than 1%

			2013
Financial Statement Line Item	Dollar Impact		As Previously Reported		% Impact		2013 As Revised
Provision (Benefit) for Income Taxes	$	(305)	$	(11,963)	2.54	%	$	(12,268)
Net Income	$	375	$	18,157	2.07	%	$	18,532
Comprehensive Income	$	375	$	29,163	1.2	%	$	29,538

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Earnings Per Share [Abstract]
Net (Loss) Income	$ (2,565)	$ (2,222)	$ (6,446)	$ 1,290	$ 18,532
Preferred Stock Dividends	1,305	1,076	3,916	1,920
Net (Loss) Income Available to Common Stockholders	$ (3,870)	$ (3,298)	$ (10,362)	$ (630)
Basic (in shares)	7,301,657	7,248,350	7,278,695	7,233,807
Plus: Effect of dilutive restrictive stock (in shares)
Diluted (in shares)	7,301,657	7,248,350	7,278,695	7,233,807
Net (Loss) Income per share - Basic (in dollars per share)	$ (0.53)	$ (0.46)	$ (1.42)	$ (0.09)
Net (Loss) Income per share - Diluted (in dollars per share)	$ (0.53)	$ (0.46)	$ (1.42)	$ (0.09)

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Stock Based Compensation [Abstract]

Summary Of Activity For Stock Awards

	2014
	Shares		Weighted Average Fair Value Per Share
Non-vested - December 31, 2013	-		-
Unrestricted Shares Granted	4,470	$	26.80
Shares Vested	(4,470)	$	26.80
Non-vested - September 30, 2014	-		-

Schedule Of Assumptions Used

	2014 Awards						2013 Awards						2012 Awards
	1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest
Stock Price	$	25.95		$	25.95		$	17.66		$	17.66		$	19.35		$	19.35
Expected Volatilities		44.30	%		40.02	%		33.50	%		37.03	%		44.31	%		40.50	%
Correlation Coefficients		0.374			0.554			0.473			0.625			0.719			0.694
Risk Free Rate		0.10	%		0.72	%		0.10	%		0.31	%		0.16	%		0.34	%
Dividend Yield		3.85	%		3.85	%		5.70	%		5.70	%		5.17	%		5.17	%
Simulated Fair Value	$	23.03		$	25.46		$	15.33		$	16.57		$	17.73		$	18.88
Fair Value as a % of Grant		88.74	%		98.10	%		86.81	%		93.83	%		91.63	%		97.57	%

Schedule Of Compensation Expense And Reductions In Earnings Per Share

	Three Months ended September 30,				Nine Months ended September 30,
	2014		2013		2014		2013
Stock-Based Compensation
Expense:
Stock Grants to Outside Directors	$	30,000	$	30,000	$	90,000	$	90,000
RSUs Awards to Officers	$	322,000	$	272,000	$	1,093,000	$	933,000
Related Reduction in
Earnings Per Share 1	$	(0.03)	$	(0.03)	$	(0.11)	$	(0.09)
1  Same for basic and diluted earnings per share

Summary Of RSU Activity And Related Information

	Number of RSU's		Weighted Average Grant Date Fair Value
Non-vested - December 31, 2013	131,100	$	18.77
Additional Awards Granted	15,138		16.63
Awards Granted	42,650		24.99
Awards Exercised	(48,849)		24.97
Awards Cancelled	(25,639)		24.97
Non-vested - September 30, 2014	114,400	$	22.07

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Income Taxes [Abstract]
Provision (benefit) for income taxes	$ 1,141	$ 18	$ 912	$ 68	$ (12,268)
(Loss) income before taxes and equity in net loss unconsolidated entities	$ (1,248)	$ (1,844)	$ (5,170)	$ 2,063

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Stock Based Compensation (Schedule Of Compensation Expense And Reductions In Earnings Per Share) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Related Reduction in Earnings Per Share	$ (0.03)	$ (0.03)	$ (0.11)	$ (0.09)
Stock Grants To Board Of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 30,000	$ 30,000	$ 90,000	$ 90,000
RSUs Awards To Officers [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 322,000	$ 272,000	$ 1,093,000	$ 933,000

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Long-Term Debt (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended			0 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended					0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended	12 Months Ended
	Aug. 31, 2014	Sep. 30, 2014	Sep. 24, 2013	Sep. 30, 2014 Loan Agreement [Member]	Aug. 26, 2014 Loan Agreement [Member] DVB Bank SE [Member] item	Sep. 30, 2014 Loan Agreement [Member] DVB Bank SE [Member] item	Aug. 31, 2014 Loan Agreement [Member] RBS Asset Finance [Member] item	Sep. 30, 2014 Loan Agreement [Member] RBS Asset Finance [Member] item	Sep. 30, 2013 Senior Secured Credit Facility [Member]	Sep. 24, 2013 Senior Secured Credit Facility [Member] item	Sep. 24, 2013 Standby Letters Of Credit [Member]	Sep. 24, 2013 Swingline Loans [Member]	Sep. 24, 2013 Line Of Credit Facility [Member]	Sep. 30, 2014 Line Of Credit Facility [Member]	Sep. 24, 2013 Variable Rate Financing Agreement [Member]	Sep. 30, 2014 Variable Rate Financing Agreement [Member]	Dec. 31, 2013 Variable Rate Financing Agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity					$ 38,500,000	$ 38,500,000	$ 23,000,000	$ 23,000,000		$ 45,000,000
Fixed rate (in hundredths)						4.35%
Number of quarterly payments					24	24
Final quarterly balloon payment					20,700,000	20,700,000
Deferred loan costs						519,000		230,000
Old unamortized loan costs								225,000
One third pre-month funding of upcoming quarterly debt payment, amount				387,000
Bank debt owed to DnB ASA paid off	11,400,000	11,400,000
Basis spread on variable interest rate							2.75%	2.75%
Number of monthly payments							84	84
Number of lenders										4
Lender commitments, minimum										15,000,000
Lender commitments, maximum										30,000,000
Amount of additional term loan										50,000,000
Variable rate financing agreement term																5 years	5 years
Total amount paid off													46,600,000
Amount drawn from line of credit															21,000,000
Bank fees									1,400,000
Third party fees									148,000
Line of credit			50,000,000							50,000,000	20,000,000	5,000,000
Consolidated Leverage Ratio through June 30, 2014														4.50%
Future Consolidated Leverage Ratio after June 30, 2014														4.25%
Minimum Liquidity Amount through June 30, 2014														15,000,000
Minimum Future Liquidity Amount after June 30, 2014														$ 20,000,000
Future Consolidated Leverage Ratio through the fiscal quarter ending December 31, 2015														5.00%
Future Consolidated Leverage Ratio fiscal quarter ending March 31, 2016														4.75%
Future Consolidated Leverage Ratio beginning the quarter ending June 30, 2016 through the quarter ending September 30, 2016														4.50%
Future Consolidated Leverage Ratio after September 30, 2016														4.25%
Future Minimum Fixed Charge Coverage Ratio beginning with the quarter ending September 30, 2014 through the quarter ending December 31, 2014														1.10%
Future Minimum Fixed Charge Coverage Ratio beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015														1.15%
Future Minimum Fixed Charge Coverage Ratio beginning with the quarter ending March 31, 2016 through the quarter ending June 30, 2016														0.05%
Future Minimum Fixed Charge Coverage Ratio after June 30, 2016														1.25%

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Inventory (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Inventory [Abstract]
Spare Parts Inventory	$ 4,195	$ 3,968
Fuel Inventory	4,547	4,663
Warehouse Inventory	2,501	2,691
Inventory	$ 11,243	$ 11,322

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Operating Segments

9 Months Ended

Sep. 30, 2014

Operating Segments [Abstract]

Operating Segments

Note 3.  Operating Segments

Our six operating segments, Jones Act, Pure Car Truck Carriers, Dry Bulk Carriers, Rail-Ferry, Specialty Contracts, and Other are distinguished primarily by the market in which the segment assets are deployed, the physical characteristics of those assets, and the type of services provided to our customers. We report in the Other category the results of several of our subsidiaries that provide ship and cargo charter brokerage, ship management services and agency services to our operating subsidiaries as well as third party customers.  Also included in the Other category are corporate related items, results of insignificant operations, and income and expense items not allocated to the other reportable segments. We manage each reportable segment separately, as each requires different resources depending on the nature of the contract or terms under which the vessels within the segment operate. 

We allocate interest expense to the segments in proportion to the fixed assets (defined as the carrying value of vessels, property, and other equipment) within each segment.  Additionally, we include the results of two of our unconsolidated entities, Oslo Bulk, AS and  Oslo Bulk Holding Pte. Ltd, in our Dry Bulk Carriers segment, and the results of another unconsolidated entity, Terminales Transgolfo, S.A. de C.V., to our Rail-Ferry segment.  The results of our remaining unconsolidated entities, Saltholmen Shipping Ltd (a company owning two Chemical Tankers) and Brattholmen Shipping Ltd (a company owning two Asphalt Tankers), are included in our Specialty Contracts segment.  We do not allocate to our segments; (i) administrative and general expenses, (ii) (loss) gain on sale of other assets, (iii) derivative (income) loss, (iv) income taxes, (v) loss (gain) on sale of investment, (vi) other income from vessel financing, (vii) investment income, and (viii) foreign exchange loss (gain).  Intersegment revenues are based on market prices and include revenues earned by our subsidiaries that provide specialized services to our operating companies. Finally, we use “gross voyage profit” as the primary measure for our segments’ profitability to assist in monitoring and managing our business.

The following table presents information about segment profit and loss for the three months ended September 30, 2014 and 2013:

RESULTS OF OPERATIONS

three MONTHS ENDED September 30, 2014

COMPARED TO THE three MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	32,101		$	15,290		$	1,910		$	-		$	9,462		$	-		$	58,763
Variable Revenue		-			3,520			1,786			9,435			1,497			(591)			15,647
Total Revenue from External Customers		32,101			18,810			3,696			9,435			10,959			(591)			74,410
Intersegment Revenues(Eliminated)		-			-			-			-			-			(4,321)			(4,321)
Intersegment Expenses Eliminated		-			-			-			-			-			4,321			4,321
Voyage Expenses		25,340			16,199			2,933			7,940			10,351			(1,134)			61,629
Loss (Income) of Unconsolidated Entities		-			-			373			81			(278)			-			176
Gross Voyage Profit	$	6,761		$	2,611		$	390		$	1,414		$	886		$	543		$	12,605
Gross Voyage Profit Margin		21	%		14	%		11	%		15	%		8	%		92	%		17	%
2013
Fixed Revenue	$	31,003		$	14,843		$	919		$	-		$	7,928		$	-		$	54,693
Variable Revenue		-			7,990			4,634			10,419			227			(25)			23,245
Total Revenue from External Customers		31,003			22,833			5,553			10,419			8,155			(25)			77,938
Intersegment Revenues (Eliminated)		-			-			-			-			-			(5,519)			(5,519)
Intersegment Expenses Eliminated		-			-			-			-			-			5,519			5,519
Voyage Expenses		24,400			19,728			4,801			8,494			7,602			(193)			64,832
Loss of Unconsolidated Entities		-			-			315			45			-			-			360
Gross Voyage Profit	$	6,603		$	3,105		$	437		$	1,880		$	553		$	168		$	12,746
Gross Voyage Profit Margin		21	%		14	%		8	%		18	%		7	%		(672)	%		16	%

The following table presents information about segment profit and loss for the nine months ended September 30, 2014 and 2013:

RESULTS OF OPERATIONS

NINE MONTHS ENDED September 30, 2014

COMPARED TO THE NINE MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	94,408		$	46,200		$	5,194		$	-		$	26,650		$	-		$	172,452
Variable Revenue		-			11,319			8,881			27,101			4,624			(521)			51,404
Total Revenue from External Customers		94,408			57,519			14,075			27,101			31,274			(521)			223,856
Intersegment Revenues(Eliminated)		-			-			-			-			-			(12,963)			(12,963)
Intersegment Expenses Eliminated		-			-			-			-			-			12,963			12,963
Voyage Expenses		77,370			50,355			9,992			22,874			28,826			(1,831)			187,586
Loss (Income) of Unconsolidated Entities		-			-			542			148			(326)			-			364
Gross Voyage Profit	$	17,038		$	7,164		$	3,541		$	4,079		$	2,774		$	1,310		$	35,906
Gross Voyage Profit Margin		18	%		12	%		25	%		15	%		9	%		(252)	%		16	%
2013
Fixed Revenue	$	90,581		$	48,043		$	2,457		$	-		$	21,519		$	-		$	162,600
Variable Revenue		-			27,755			12,183			29,115			2,253			53			71,359
Total Revenue from External Customers		90,581			75,798			14,640			29,115			23,772			53			233,959
Intersegment Revenues (Eliminated)		-			-			-			-			-			(16,557)			(16,557)
Intersegment Expenses Eliminated		-			-			-			-			-			16,557			16,557
Voyage Expenses		72,106			63,574			14,688			23,894			22,100			(431)			195,931
Loss of Unconsolidated Entities		-			-			653			52			-			-			705
Gross Voyage Profit (Loss)	$	18,475		$	12,224		$	(701)		$	5,169		$	1,672		$	484		$	37,323
Gross Voyage Profit Margin		20	%		16	%		(5)	%		18	%		7	%		913	%		16	%

The following table is a reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements:

	Three Months Ended September 30,				Year to date as of September 30,
(All Amounts in Thousands)		2014		2013		2014		2013
Revenues	$	74,410	$	77,938	$	223,856	$	233,959
Voyage Expenses*		61,629		64,832		187,586		195,931
Net Loss of Unconsolidated Entities		176		360		364		705
Gross Voyage Profit		12,605		12,746		35,906		37,323
Vessel Depreciation		6,290		6,130		19,528		17,705
Other Depreciation		18		17		54		51
Gross Profit		6,297		6,599		16,324		19,567
Other Operating Expenses:
Administrative and General Expenses		5,398		4,994		16,209		16,597
Loss on Sale  of Other Assets		1		6		1		6
Less:  Net Loss of Unconsolidated Entities		(176)		(360)		(364)		(705)
Total Other Operating Expenses		5,223		4,640		15,846		15,898
Operating Income	$	1,074	$	1,959	$	478	$	3,669
* Includes Intangible Amortization

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Long-Term Debt (Schedule Of Long-Term Debt) (Details) (USD $)	1 Months Ended	3 Months Ended			0 Months Ended		1 Months Ended			9 Months Ended				9 Months Ended				9 Months Ended						9 Months Ended		9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended							9 Months Ended		0 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended
	Aug. 31, 2014	Sep. 30, 2014	Dec. 31, 2013	Sep. 24, 2013	Jun. 20, 2011 Notes Payable - Variable Rate 2018a [Member]	Jun. 20, 2011 Notes Payable - Variable Rate 2018b [Member]	Jan. 24, 2012 Notes Payable - Variable Rate 2018b [Member]	Nov. 30, 2011 Notes Payable - Variable Rate 2018b [Member]	Sep. 30, 2014 Notes Payable - Variable Rate 2020 [Member]	Sep. 30, 2014 Notes Payable - Fixed Rate 2020 [Member]		Sep. 30, 2014 Note Payable - Mortgage [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018a [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018a [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018b [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018b [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018b [Member] Minimum [Member]	Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018b [Member] Maximum [Member]	Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2017 [Member]	Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2017 [Member]	Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2021 [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2021 [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018c [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018c [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2020 [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2020 [Member]		Sep. 30, 2014 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018d [Member]		Dec. 31, 2013 Senior Secured Credit Facility [Member] Notes Payable - Variable Rate 2018d [Member]		Sep. 30, 2014 Secured Line Of Credit [Member]		Dec. 31, 2013 Secured Line Of Credit [Member]		Sep. 24, 2013 Senior Secured Credit Facility [Member]	Sep. 24, 2013 Standby Letters Of Credit [Member]	Sep. 24, 2013 Swingline Loans [Member]	Sep. 30, 2014 ING Bank [Member]	Jun. 20, 2011 ING Bank [Member] item	Aug. 26, 2014 DVB Bank SE [Member] Loan Agreement [Member] item	Sep. 30, 2014 DVB Bank SE [Member] Loan Agreement [Member] item	Aug. 31, 2014 RBS Asset Finance [Member] Loan Agreement [Member] item	Sep. 30, 2014 RBS Asset Finance [Member] Loan Agreement [Member] item
Debt Instrument [Line Items]
Interest rate (in hundredths)										4.35%	[1]			2.7331%	[2]	2.7451%	[2]			2.74%	[2]	2.7346%	2.7381%	2.504%	2.5188%	2.9015%	[3]	2.9181%	[3]	2.7326%	[2]	2.7384%	[2]	3.6179%	[4]	2.8964%	[4]	3.99%	[5]	3.75%	[5]	3.91%	[5]	3.67%	[5]							4.35%
Maturity date										2020	[1]			2018	[2]			2018	[2]					2017		2021	[3]			2018	[2]			2020	[4]			2018	[5]			2018	[5]
Total Principal Due		$ 253,503,000	$ 198,229,000							$ 38,500,000	[1]	$ 5,000	[6]	$ 12,884,000	[2]	$ 15,460,000	[2]	$ 42,320,000	[2]	$ 45,081,000	[2]			$ 9,704,000	$ 11,383,000	$ 22,766,000	[3]	$ 12,780,000	[3]	$ 15,708,000	[2]	$ 16,651,000	[2]	$ 27,866,000	[4]	$ 31,437,000	[4]	$ 42,750,000	[5]	$ 44,437,000	[5]	$ 41,000,000	[5]	$ 21,000,000	[5]
Less current maturities		(23,347,000)	(19,213,000)
Long-term debt - non-current		230,156,000	179,016,000
Interest rate swap , fixed interest rate (in hundredths)									2.065%
Effective, swaption interest rate (in hundredths)									5.565%
Term of financing agreement in years																																																	7 years
Business acquisition interest in acquiree					100.00%
Proceeds from borrowings of line of credit					24,100,000	23,300,000	12,700,000	6,100,000
Number of tranches																																																		2
Term loan facility principal amount																																														45,000,000
Line of credit				50,000,000																																										50,000,000	20,000,000	5,000,000
Maximum borrowing capacity																																														45,000,000					38,500,000	38,500,000	23,000,000	23,000,000
Number of quarterly payments																																																			24	24
Final quarterly balloon payment																																																			20,700,000	20,700,000
Bank debt owed to DnB ASA paid off	$ 11,400,000	$ 11,400,000
Basis spread on variable interest rate																																																					2.75%	2.75%
Number of monthly payments																																																					84	84

[1] We entered into a fixed rate financing agreement with DVB Bank SE, on August 26, 2014 in the amount of $38.5 million, collateralized by our 2007 PCTC at a rate of 4.35% with 24 quarterly payments with a final balloon payment of $20.7 million in August 2020.

[2] We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Capesize vessel and a Supramax Bulk Carrier newbuilding, both of which we acquired a 100% interest in as a result of our acquisition of Dry Bulk. Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.1 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, we drew $6.1 million in November 2011 and $12.7 million in January 2012.

[3] During August 2014, we paid off our $11.4 million loan with DnB ASA and obtained a new loan with RBS Asset Finance in the amount of $23.0 million collateralized by one of our 1999 PCTCs at a variable rate of 30 day Libor rate plus 2.75% payable in 84 monthly installments with the final payment due August 2021.

[4] We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 5.565%. The swap agreement is for the same term as the associated note payable.

[5] As described in greater detail above, our senior secured Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a LOC in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.

[6] Represents consideration given in connection with the proposed construction financing relating to the building we plan to renovate as our new New Orleans headquarters building.

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Basis Of Preparation (Details)	9 Months Ended
	Sep. 30, 2014
Basis Of Preparation [Abstract]
Minimum percentage of ownership considered for consolidation (in hundredths)	50.00%
Minimum percentage of ownership considered for equity method of accounting for investments (in hundredths)	20.00%
Maximum percentage of ownership considered for equity method of accounting for investments (in hundredths)	50.00%
Maximum percentage of ownership considered for cost method of accounting for investments (in hundredths)	20.00%

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Operating Segments (Tables)

9 Months Ended

Sep. 30, 2014

Operating Segments [Abstract]

Segment Profit And Loss

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	32,101		$	15,290		$	1,910		$	-		$	9,462		$	-		$	58,763
Variable Revenue		-			3,520			1,786			9,435			1,497			(591)			15,647
Total Revenue from External Customers		32,101			18,810			3,696			9,435			10,959			(591)			74,410
Intersegment Revenues(Eliminated)		-			-			-			-			-			(4,321)			(4,321)
Intersegment Expenses Eliminated		-			-			-			-			-			4,321			4,321
Voyage Expenses		25,340			16,199			2,933			7,940			10,351			(1,134)			61,629
Loss (Income) of Unconsolidated Entities		-			-			373			81			(278)			-			176
Gross Voyage Profit	$	6,761		$	2,611		$	390		$	1,414		$	886		$	543		$	12,605
Gross Voyage Profit Margin		21	%		14	%		11	%		15	%		8	%		92	%		17	%
2013
Fixed Revenue	$	31,003		$	14,843		$	919		$	-		$	7,928		$	-		$	54,693
Variable Revenue		-			7,990			4,634			10,419			227			(25)			23,245
Total Revenue from External Customers		31,003			22,833			5,553			10,419			8,155			(25)			77,938
Intersegment Revenues (Eliminated)		-			-			-			-			-			(5,519)			(5,519)
Intersegment Expenses Eliminated		-			-			-			-			-			5,519			5,519
Voyage Expenses		24,400			19,728			4,801			8,494			7,602			(193)			64,832
Loss of Unconsolidated Entities		-			-			315			45			-			-			360
Gross Voyage Profit	$	6,603		$	3,105		$	437		$	1,880		$	553		$	168		$	12,746
Gross Voyage Profit Margin		21	%		14	%		8	%		18	%		7	%		(672)	%		16	%

The following table presents information about segment profit and loss for the nine months ended September 30, 2014 and 2013:

RESULTS OF OPERATIONS

NINE MONTHS ENDED September 30, 2014

COMPARED TO THE NINE MONTHS ENDED September 30, 2013

(All Amounts in Thousands)		Jones Act			Pure Car Truck Carriers			Dry Bulk Carriers			Rail-Ferry			Specialty Contracts			Other			Total
2014
Fixed Revenue	$	94,408		$	46,200		$	5,194		$	-		$	26,650		$	-		$	172,452
Variable Revenue		-			11,319			8,881			27,101			4,624			(521)			51,404
Total Revenue from External Customers		94,408			57,519			14,075			27,101			31,274			(521)			223,856
Intersegment Revenues(Eliminated)		-			-			-			-			-			(12,963)			(12,963)
Intersegment Expenses Eliminated		-			-			-			-			-			12,963			12,963
Voyage Expenses		77,370			50,355			9,992			22,874			28,826			(1,831)			187,586
Loss (Income) of Unconsolidated Entities		-			-			542			148			(326)			-			364
Gross Voyage Profit	$	17,038		$	7,164		$	3,541		$	4,079		$	2,774		$	1,310		$	35,906
Gross Voyage Profit Margin		18	%		12	%		25	%		15	%		9	%		(252)	%		16	%
2013
Fixed Revenue	$	90,581		$	48,043		$	2,457		$	-		$	21,519		$	-		$	162,600
Variable Revenue		-			27,755			12,183			29,115			2,253			53			71,359
Total Revenue from External Customers		90,581			75,798			14,640			29,115			23,772			53			233,959
Intersegment Revenues (Eliminated)		-			-			-			-			-			(16,557)			(16,557)
Intersegment Expenses Eliminated		-			-			-			-			-			16,557			16,557
Voyage Expenses		72,106			63,574			14,688			23,894			22,100			(431)			195,931
Loss of Unconsolidated Entities		-			-			653			52			-			-			705
Gross Voyage Profit (Loss)	$	18,475		$	12,224		$	(701)		$	5,169		$	1,672		$	484		$	37,323
Gross Voyage Profit Margin		20	%		16	%		(5)	%		18	%		7	%		913	%		16	%

Reconciliation Of The Totals Reported For The Operating Segments

	Three Months Ended September 30,				Year to date as of September 30,
(All Amounts in Thousands)		2014		2013		2014		2013
Revenues	$	74,410	$	77,938	$	223,856	$	233,959
Voyage Expenses*		61,629		64,832		187,586		195,931
Net Loss of Unconsolidated Entities		176		360		364		705
Gross Voyage Profit		12,605		12,746		35,906		37,323
Vessel Depreciation		6,290		6,130		19,528		17,705
Other Depreciation		18		17		54		51
Gross Profit		6,297		6,599		16,324		19,567
Other Operating Expenses:
Administrative and General Expenses		5,398		4,994		16,209		16,597
Loss on Sale  of Other Assets		1		6		1		6
Less:  Net Loss of Unconsolidated Entities		(176)		(360)		(364)		(705)
Total Other Operating Expenses		5,223		4,640		15,846		15,898
Operating Income	$	1,074	$	1,959	$	478	$	3,669
* Includes Intangible Amortization

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

Note 22.  Subsequent Events

On October 29, 2014, at the third quarter Board meeting, our management presented a strategic plan to our Directors that included a divestiture of selected under-performing assets.  Subject to a successful divestiture, we could generate approximately $18 - $20 million in net proceeds, after retiring debt collateralized by these assets of approximately $42 million.  We plan to invest these proceeds in existing opportunities that will provide satisfactory returns. If our Board of Directors approves this plan, we believe that all the criteria necessary to classify these assets as Held for Sale assets will have occurred at that time, and the assets will be recorded at fair value less the cost to sell. Based on the current fair value  estimates of these assets, we could potentially recognize an impairment loss in the range of $25-30 million, which would be recorded in the fourth quarter of 2014. As of September 30, 2014, we performed an analysis of the recoverability of the vessels under the Held for Use model using a weighted average probability approach that considered the various alternative sources of cash flows associated with these vessels, including the sale of these assets and their continued use should we not achieve our sales price estimates, or should our Board not approve such sale.  Our evaluation resulted in a conclusion that the carrying values of the vessels were recoverable under the Held for Use model as of September 30, 2014.Accordingly, no impairment was recorded during the three and nine months periods ended September 30, 2014.

On October 17, 2014, through one of our wholly owned subsidiaries, we entered into a Memorandum of Agreement for the sale of our single hulled Tanker vessel. If all conditions are met to this agreement, the transaction could be completed by the second week of November 2014. Under the current terms, the sales proceeds would be approximately $1.6 million and generate an impairment loss of approximately $3.1 million in the fourth quarter.  As of September 30, 2014, we performed an analysis of the recoverability on the Tanker under the Held for Use model using a weighted average probability approach that considered the various alternative sources of cash flows including the pending sale in order to recover the current carrying value of the Tanker. Our evaluation resulted in a conclusion that the carrying value of the Tanker was recoverable under the Held for Use model as of September 30, 2014. Accordingly, no impairment was recorded during the three and nine months periods ended September 30, 2014.

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Derivative Instruments (Narrative) (Details)	1 Months Ended				9 Months Ended	12 Months Ended
	Jun. 30, 2014 contract	Mar. 31, 2014 contract	Sep. 30, 2014 USD ($)	Dec. 31, 2013 JPY (¥) contract	Sep. 30, 2014 Other Comprehensive Income (Loss) [Member] USD ($)	Dec. 31, 2013 Other Comprehensive Income (Loss) [Member] USD ($)	Mar. 31, 2014 Foreign Exchange Contracts [Member]	Aug. 31, 2013 Foreign Exchange Contract 1 [Member] USD ($)	Aug. 31, 2013 Foreign Exchange Contract 1 [Member] MXN	Nov. 30, 2013 Foreign Exchange Contract 2 [Member] USD ($)	Nov. 30, 2013 Foreign Exchange Contract 2 [Member] MXN	Sep. 30, 2014 Foreign Exchange Contract 3 [Member] USD ($)	Sep. 30, 2014 Foreign Exchange Contract 3 [Member] MXN	Sep. 30, 2014 July Foreign Exchange Contract [Member] JPY (¥) contract item
Derivative Instruments, Gain (Loss) [Line Items]
Maximum potential future exposure on derivatives			$ 5,400,000
Unrealized loss related to derivative instruments included in accumulated other comprehensive loss					3,900,000	4,300,000
Number of forward purchase contracts				2
Number of foreign currency derivatives held				3										4
Number of quarterly loan installments coincided by contracts														2
Derivatives, current notional amount				3,300,000,000				1,200,000		600,000		900,000		3,100,000,000
Exchange rate				102.53					13.6103		13.3003		13.6007
Projected Peso exposure represented by Mexican Peso foreign exchange contracts (in hundredths)							25.00%
Number of expired contracts	1	1
Approximate amount of quarterly loan installments														85,000,000
Derivatives, notional amount remaining after quarterly loan installments														¥ 2,885,000,000

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Out Of Period Adjustments (Details) (USD $)	3 Months Ended
	Sep. 30, 2014
Out Of Period Adjustments [Abstract]
Increase to pre-tax income due to correction of error	$ 108,000
Decrease to net loss due to correction of error	$ 61,000

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Inventory (Tables)

9 Months Ended

Sep. 30, 2014

Inventory [Abstract]

Inventory By Class

(All Amounts in Thousands)		September 30,		December 31,
Inventory Classes		2014		2013
Spare Parts Inventory	$	4,195	$	3,968
Fuel Inventory		4,547		4,663
Warehouse Inventory		2,501		2,691
	$	11,243	$	11,322

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Investment In Unconsolidated Entities (Tables)

9 Months Ended

Sep. 30, 2014

Investment In Unconsolidated Entities [Abstract]

Summarized Equity In Net Loss Of Unconsolidated Entities

		Three Months ended September 30,				Nine Months Ended September 30,
		2014		2013		2014		2013
(All Amounts in Thousands)
Oslo Bulk, AS	$	(55)	$	(193)	$	(142)	$	(290)
Oslo Bulk Holding Pte, Ltd		(318)		(122)		(400)		(363)
Terminales Transgolfo,  S . A .  D E  C . V .		(81)		(45)		(148)		(52)
Brattholmen Shipping, Ltd		30		-		30		-
Saltholmen Shipping, Ltd		248		-		296		-
Total Equity in Net Loss of Unconsolidated Entities	$	(176)	$	(360)	$	(364)	$	(705)

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Out Of Period Adjustments

9 Months Ended

Sep. 30, 2014

Out Of Period Adjustments [Abstract]

Out Of Period Adjustments

Note 2.  Out of Period Adjustments

During 2014, an error was identified related to the cutoff of voyage revenues between the first and second quarter of 2014 which would have resulted in an increase in revenue and an increase in voyage expenses for the quarter ended March 31, 2014.  During the three months ended June 30, 2014 we recorded an out of period adjustment to correct this error.  The impact of correcting this error resulted in an increase to pre-tax income of$108,000 and a  decrease to net loss by $61,000.  We evaluated the impact of this error on the results of our previously issued financial statements for the first quarter of 2014 and concluded that the impact was not material. We also evaluated the impact of correcting the error in the second quarter of 2014 and concluded that the impact was not material.

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Goodwill, Other Intangible Assets, And Deferred Charges (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill, Other Intangible Assets, And Deferred Charges [Abstract]

Schedule Of Goodwill, Other Intangible Assets, And Deferred Charges

(All Amounts in Thousands)
	Amortization Period	Balance at      June 30, 2014		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	58	$	-	$	-	$	-	$	58
Trade names - UOS	96 months		1,449		-		(57)		-		1,392
Customer Relationships - FSI	240 months		386		-		(6)		-		380
Customer Relationships - UOS	96 months		24,805		-		(966)		-		23,839
Total Definite Life Intangibles		$	26,698	$	-	$	(1,029)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	22,284	$	2,940	$	(5,154)	$	2,520	$	22,590
Financing Charges and Other	various		2,991		619		(563)		347		3,394
Total Deferred Charges		$	25,275	$	3,559	$	(5,717)	$	2,867	$	25,984

Amortization expense for intangible assets was approximately $3.1 million and $4.6 million for the nine months ended September 30, 2014 and 2013, respectively.  Amortization expense for deferred charges was approximately $14.6 million and $7.5 million for the nine months ended September 30, 2014 and 2013, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred charges for the nine months ended September 30, 2014:

(All Amounts in Thousands)
	Amortization Period	Balance at December 31, 2013		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	60	$	-	$	(2)	$	-	$	58
Trade names - UOS	96 months		1,561		-		(169)		-		1,392
Customer Relationships - FSI	240 months		396		-		(16)		-		380
Customer Relationships - UOS	96 months		26,739		-		(2,900)		-		23,839
Total Definite Life Intangibles		$	28,756	$	-	$	(3,087)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	26,428	$	7,038	$	(13,745)	$	2,869	$	22,590
Financing Charges and Other	various		2,881		1,034		(868)		347		3,394
Total Deferred Charges		$	29,309	$	8,072	$	(14,613)	$	3,216	$	25,984

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Calculation Of Basic And Diluted Earnings Per Share

	Three Months Ended Sept 30,				Nine Months Ended Sept 30,
	2014		2013		2014		2013
Numerator
Net (Loss) Income	$	(2,565)	$	(2,222)	$	(6,446)	$	1,290
Preferred Stock Dividends		1,305		1,076		3,916		1,920
Net (Loss) Income Available to Common Stockholders	$	(3,870)	$	(3,298)	$	(10,362)	$	(630)
Denominator
Weighted Average Shares of Common Stock
Outstanding:
Basic		7,301,657		7,248,350		7,278,695		7,233,807
Plus:
Effect of dilutive restrictive stock		-		-		-		-
Diluted		7,301,657		7,248,350		7,278,695		7,233,807
Basic Earnings Per Common Share:
Net (Loss) Income per share - Basic	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)
Net (Loss) Income per share - Diluted:	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)

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Commitments And Contingencies (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014 Revolving Credit Facility [Member]	Jun. 26, 2014 U.S. Customs And Border Protection [Member] item
Commitments And Contingencies [Line Items]
Period of notice, deposits to be refunded by	30 days
Deposit reclassified to current receivable	$ 3,800,000
Interest from construction in progress reclassified to current receivable	300,000
Deposit and interest reclassified to current receivable	4,100,000
Outstanding letters of credit	9,000,000	8,000,000
Number of affiliates that allegedly failed to properly report the importation of spare parts consumed by vessels			2
Amount of proposed duty			2,100,000
Amount of proposed penalty on assessment			$ 8,400,000

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Preferred Stock (Details) (USD $)	9 Months Ended	0 Months Ended			1 Months Ended	9 Months Ended	0 Months Ended				9 Months Ended	0 Months Ended
	Sep. 30, 2013	Jul. 07, 2014 Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Apr. 09, 2014 Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Jan. 07, 2014 Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Feb. 21, 2013 Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Sep. 30, 2014 Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Jul. 07, 2014 Series B Cumulative Redeemable Perpetual Preferred Stock [Member]	Apr. 09, 2014 Series B Cumulative Redeemable Perpetual Preferred Stock [Member]	Jan. 07, 2014 Series B Cumulative Redeemable Perpetual Preferred Stock [Member]	Aug. 01, 2013 Series B Cumulative Redeemable Perpetual Preferred Stock [Member]	Sep. 30, 2014 Series B Cumulative Redeemable Perpetual Preferred Stock [Member]	Oct. 06, 2014 Subsequent Event [Member] Series A Cumulative Redeemable Perpetual Preferred Stock [Member]	Oct. 06, 2014 Subsequent Event [Member] Series B Cumulative Redeemable Perpetual Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock issued					250,000					316,250
Preferred stock, dividend rate					9.50%					9.00%
Preferred stock, par value					$ 1.00					$ 1.00
Preferred stock, liquidation preference per share					$ 100.00					$ 100.00
Shares sold pursuant to over-allotment option granted to underwriters for offering										41,250
Preferred stock, dividend declared		$ 2.375	$ 2.375	$ 2.375			$ 2.25	$ 2.25	$ 2.25			$ 2.375	$ 2.25
Accumulated unpaid dividends						$ 0					$ 0
Preferred stock, redemption date						Apr. 30, 2018					Oct. 30, 2018
Cash redemption price (in dollars per share)						$ 100.00					$ 100.00
Net proceeds from the issuance of preferred stock	53,336,000					23,400,000					30,000,000
Underwriter discounts and related costs						$ 1,600,000					$ 1,600,000
Period after change of control to redeem shares						120 days					120 days

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Condensed Consolidated Statements Of Income (Loss) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Statements Of Income (Loss) [Abstract]
Revenues	$ 74,410	$ 77,938	$ 223,856	$ 233,959
Operating Expenses:
Voyage Expenses	60,600	63,311	184,499	191,262
Intangible Amortization	1,029	1,521	3,087	4,669
Vessel Depreciation	6,290	6,130	19,528	17,705
Other Depreciation	18	17	54	51
Administrative and General Expenses	5,398	4,994	16,209	16,597
Loss on Sale of Other Assets	1	6	1	6
Total Operating Expenses	73,336	75,979	223,378	230,290
Operating Income	1,074	1,959	478	3,669
Interest and Other:
Interest Expense	3,115	3,109	7,301	7,387
Derivative (Gain) Loss	(89)	768	(57)	486
Other Income from Vessel Financing	(456)	(522)	(1,417)	(1,616)
Investment Income	(278)	(9)	(302)	(91)
Foreign Exchange Loss (Gain)	30	457	123	(4,560)
Total Interest and Other Income	2,322	3,803	5,648	1,606
(Loss) Income Before Benefit for Income Taxes and Equity in Net Income of Unconsolidated Entities	(1,248)	(1,844)	(5,170)	2,063
Provision for Income Taxes	1,141	18	912	68
Equity in Net Loss of Unconsolidated Entities (Net of Applicable Taxes)	(176)	(360)	(364)	(705)
Net (Loss) Income	(2,565)	(2,222)	(6,446)	1,290
Preferred Stock Dividends	1,305	1,076	3,916	1,920
Net (Loss) Income Available to Common Stockholders	$ (3,870)	$ (3,298)	$ (10,362)	$ (630)
Basic and Diluted Earnings Per Common Share:
Basic Earnings Per Common Share: (in dollars per share)	$ (0.53)	$ (0.46)	$ (1.42)	$ (0.09)
Diluted Earnings Per Common Share: (in dollars per share)	$ (0.53)	$ (0.46)	$ (1.42)	$ (0.09)
Weighted Average Shares of Common Stock Outstanding:
Basic (in shares)	7,301,657	7,248,350	7,278,695	7,233,807
Diluted (in shares)	7,301,657	7,248,350	7,278,695	7,233,807
Common Stock Dividends Per Share (in dollars per share)	$ 0.25	$ 0.25	$ 0.75	$ 0.75

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Operating Segments (Segment Profit And Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 segment	Sep. 30, 2013
Segment Reporting Information [Line Items]
Number of operating segments			6
Fixed Revenue	$ 58,763	$ 54,693	$ 172,452	$ 162,600
Variable Revenue	15,647	23,245	51,404	71,359
Total Revenues	74,410	77,938	223,856	233,959
Expenses	73,336	75,979	223,378	230,290
Voyage Expenses	61,629	64,832	187,586	195,931
Loss (Income) of Unconsolidated Entities	176	360	364	705
Gross Voyage Profit (Loss)	12,605	12,746	35,906	37,323
Gross Voyage Profit Margin Percentage (in hundredths)	17.00%	16.00%	16.00%	16.00%
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Total Revenues	(4,321)	(5,519)	(12,963)	(16,557)
Intersegment Expenses Eliminated	4,321	5,519	12,963	16,557
External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	74,410	77,938	223,856	233,959
Jones Act [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	32,101	31,003	94,408	90,581
Voyage Expenses	25,340	24,400	77,370	72,106
Gross Voyage Profit (Loss)	6,761	6,603	17,038	18,475
Gross Voyage Profit Margin Percentage (in hundredths)	21.00%	21.00%	18.00%	20.00%
Jones Act [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	32,101	31,003	94,408	90,581
PCTC [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	15,290	14,843	46,200	48,043
Variable Revenue	3,520	7,990	11,319	27,755
Voyage Expenses	16,199	19,728	50,355	63,574
Gross Voyage Profit (Loss)	2,611	3,105	7,164	12,224
Gross Voyage Profit Margin Percentage (in hundredths)	14.00%	14.00%	12.00%	16.00%
PCTC [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	18,810	22,833	57,519	75,798
Dry Bulk Carriers [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	1,910	919	5,194	2,457
Variable Revenue	1,786	4,634	8,881	12,183
Voyage Expenses	2,933	4,801	9,992	14,688
Loss (Income) of Unconsolidated Entities	373	315	542	653
Gross Voyage Profit (Loss)	390	437	3,541	(701)
Gross Voyage Profit Margin Percentage (in hundredths)	11.00%	8.00%	25.00%	(5.00%)
Dry Bulk Carriers [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	3,696	5,553	14,075	14,640
Rail-Ferry Service [Member]
Segment Reporting Information [Line Items]
Variable Revenue	9,435	10,419	27,101	29,115
Voyage Expenses	7,940	8,494	22,874	23,894
Loss (Income) of Unconsolidated Entities	81	45	148	52
Gross Voyage Profit (Loss)	1,414	1,880	4,079	5,169
Gross Voyage Profit Margin Percentage (in hundredths)	15.00%	18.00%	15.00%	18.00%
Rail-Ferry Service [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	9,435	10,419	27,101	29,115
Specialty Contracts [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	9,462	7,928	26,650	21,519
Variable Revenue	1,497	227	4,624	2,253
Voyage Expenses	10,351	7,602	28,826	22,100
Loss (Income) of Unconsolidated Entities	(278)		(326)
Gross Voyage Profit (Loss)	886	553	2,774	1,672
Gross Voyage Profit Margin Percentage (in hundredths)	8.00%	7.00%	9.00%	7.00%
Specialty Contracts [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	10,959	8,155	31,274	23,772
Other [Member]
Segment Reporting Information [Line Items]
Variable Revenue	(591)	(25)	(521)	53
Voyage Expenses	(1,134)	(193)	(1,831)	(431)
Gross Voyage Profit (Loss)	543	168	1,310	484
Gross Voyage Profit Margin Percentage (in hundredths)	92.00%	(672.00%)	(252.00%)	913.00%
Other [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Total Revenues	(4,321)	(5,519)	(12,963)	(16,557)
Intersegment Expenses Eliminated	4,321	5,519	12,963	16,557
Other [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	$ (591)	$ (25)	$ (521)	$ 53

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows from Operating Activities:
Net (Loss) Income	$ (6,446)	$ 1,290
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities:
Depreciation	20,073	18,068
Amortization of Deferred Charges	14,615	7,525
Amortization of Intangible Assets	3,087	4,669
Deferred Tax	912
Non-Cash Share Based Compensation	1,185	1,023
Equity in Net Loss of Unconsolidated Entities	364	705
Loss on Sale of Assets	1	6
Loss (Gain) on Foreign Currency Exchange	123	(4,560)
Changes in:
Deferred Drydocking Charges	(7,037)	(14,445)
Accounts Receivable	(5,210)	3,415
Inventories and Other Current Assets	(2,703)	257
Other Assets	(961)	760
Accounts Payable and Accrued Liabilities	1,748	2,375
Other Long-Term Liabilities	(4,426)	4,561
Net Cash Provided by Operating Activities	15,325	25,649
Cash Flows from Investing Activities:
Principal payments received under Direct Financing Leases		558
Capital Improvements to Vessels and Other Assets	(64,710)	(27,963)
Investment in Unconsolidated Entities	(7,887)	(500)
Net Decrease (Increase) in Restricted Cash Account	9,112	(7,825)
Acquisition of United Ocean Services, LLC, net of cash acquired		(2,475)
Proceeds from Payments on Note Receivables	3,186	4,895
Net Cash Used In Investing Activities	(60,299)	(33,310)
Cash Flows from Financing Activities:
Issuance of Preferred Stock		53,336
Proceeds from Issuance of Debt	94,545	67,000
Repayment of Debt	(38,190)	(94,788)
Additions to Deferred Financing Charges	(987)	(2,005)
Dividends Paid	(9,380)	(6,526)
Net Cash Provided by Financing Activities	45,988	17,017
Net Increase in Cash and Cash Equivalents	1,014	9,356
Cash and Cash Equivalents at Beginning of Period	20,010	19,868
Cash and Cash Equivalents at End of Period	21,024	29,224
Supplemental Disclosure of non-cash investing activities
Additions to vessels, property, plant and equipment included in accounts payable and other accrued expenses	$ 1,434	$ 2,453

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Derivative Instruments (Interest Rate Derivatives) (Details)		9 Months Ended
	Dec. 31, 2013 JPY (¥)	Sep. 30, 2014 Swap 3 [Member] USD ($)		Sep. 30, 2014 Swap 3 [Member] JPY (¥)
Derivative [Line Items]
Effective Date		Mar. 15, 2009		Mar. 15, 2009
Termination Date		Sep. 15, 2020		Sep. 15, 2020
Derivatives, current notional amount	¥ 3,300,000,000	$ 42,000,000	[1]
Swap Rate (in thousandths)		2.065%		2.065%
Type		Variable-to-Fixed		Variable-to-Fixed
Exchange rate	102.53			109.65

[1] Notional amount converted from Yen at September 30, 2014 at a Yen to USD exchange rate of 109.65.

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2014

Long-Term Debt [Abstract]

Schedule Of Long-Term Debt

		Interest Rate					Total Principal Due
(All Amount in Thousands)		September 30,		December 31,		Maturity	September 30,		December 31,
Description of Secured Debt		2014		2013		Date	2014		2013
Notes Payable – Variable Rate	(1)	2.7331	%	2.7451	%	2018	$	12,884	$	15,460
Notes Payable – Variable Rate		2.7346-2.7381	%	2.7400	%	2018		42,320		45,081
Notes Payable – Variable Rate		2.5040	%	2.5188	%	2017		9,704		11,383
Notes Payable – Variable Rate	(5)	2.9015	%	2.9181	%	2021		22,766		12,780
Notes Payable – Variable Rate	(1)	2.7326	%	2.7384	%	2018		15,708		16,651
Notes Payable – Variable Rate	(2)	3.6179	%	2.8964	%	2020		27,866		31,437
Notes Payable – Variable Rate	(3)	3.9900	%	3.7500	%	2018		42,750		44,437
Notes Payable – Fixed Rate	(4)	4.3500	%	N/A		2020		38,500		-
Note Payable - Mortgage	(6)							5		-
Line of Credit	(3)	3.9100	%	3.6700	%	2018		41,000		21,000
								253,503		198,229
		Less Current Maturities						(23,347)		(19,213)
							$	230,156	$	179,016

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Capesize vessel and a Supramax Bulk Carrier newbuilding, both of which we acquired a 100% interest in as a result of our acquisition of Dry Bulk.  Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.1 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, we drew $6.1 million in November 2011 and $12.7 million in January 2012.

2. We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 5.565%. The swap agreement is for the same term as the associated note payable.

3. As described in greater detail above, our senior secured Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a LOC in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.

4. We entered into a fixed rate financing agreement with DVB Bank SE, on August 26, 2014 in the amount of $38.5 million, collateralized by our 2007 PCTC at a rate of 4.35% with 24 quarterly payments with a final balloon payment of $20.7 million in August 2020.

5. During August 2014, we paid off our $11.4 million loan with DnB ASA and obtained a new loan with RBS Asset Finance in the amount of $23.0 million collateralized by one of our 1999 PCTCs at a variable rate of 30 day Libor rate plus 2.75% payable in 84 monthly installments with the final payment due August 2021.

6. Represents consideration given in connection with the proposed construction financing relating to the building we plan to renovate as our new New Orleans headquarters building.

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Stock Based Compensation (Summary Of Activity For Stock Awards And Summary Of RSU Activity And Related Information) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Unrestricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested - Beginning of Period (in shares)
Awards Granted (in shares)	4,470
Awards Vested (in shares)	(4,470)
Non-vested - End of Period (in shares)
Non-vested, Weighted Average Grant Date Fair Value - Beginning of Period (in dollars per share)
Awards Granted, Weighted Average Grant Date Fair Value (in dollars per share)	$ 26.80
Awards Vested, Weighted Average Grant Date Fair Value (in dollars per share)	$ 26.80
Non-vested, Weighted Average Grant Date Fair Value - End of Period (in dollars per share)
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested - Beginning of Period (in shares)	131,100
Awards Granted (in shares)	42,650
Awards Exercised (in shares)	(48,849)
Awards Forfeited/Cancelled (in shares)	(25,639)
Non-vested - End of Period (in shares)	114,400
Non-vested, Weighted Average Grant Date Fair Value - Beginning of Period (in dollars per share)	$ 18.77
Awards Granted, Weighted Average Grant Date Fair Value (in dollars per share)	$ 24.99
Awards Exercised, Weighted Average Grant Date Fair Value (in dollars per share)	$ 24.97
Awards Forfeited/Cancelled, Weighted Average Grant Date Fair Value (in dollars per share)	$ 24.97
Non-vested, Weighted Average Grant Date Fair Value - End of Period (in dollars per share)	$ 22.07
Absolute Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards Granted (in shares)	15,138
Awards Granted, Weighted Average Grant Date Fair Value (in dollars per share)	$ 16.63

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Changes In Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2014

Changes In Accumulated Other Comprehensive Loss [Abstract]

Changes In Accumulated Other Comprehensive Loss

Note 16.  Changes in Accumulated Other Comprehensive Loss

Changes in Accumulated Other Comprehensive Loss by Component

For the three months ending September 30, 2014

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance July 1, 2014		$	(4,314)	$	(397)	$	(9,066)	$	(13,777)
	Other comprehensive income (loss)
	before reclassification		850		(84)		-		766
	Amount reclassified from accumulated
	other comprehensive income (loss)		(393)		-		74		(319)
Net current-period other
comprehensive income (loss)			457		(84)		74		447
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the three months ending September 30, 2014

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(426)	Interest expense
	Foreign exchange contracts		33	Other revenues
			(393)	Total before tax
			-	Tax (expense) or benefit
			(393)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		24	A&G Expense
	Actuarial losses		76	A&G Expense
			100	Total before tax
			(26)	Tax (expense) or benefit
			74	Net of tax
Total reclassifications for the period		$	(319)	Net of tax

Changes in Accumulated Other Comprehensive Loss by Component

For the three months ending September 30, 2013

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance June 30, 2013		$	(5,844)	$	(104)	$	(16,623)	$	(22,571)
	Other comprehensive income
	before reclassification		3,275		(307)		-		2,968
	Amount reclassified from accumulated
	other comprehensive income		(2,495)		-		306		(2,189)
Net current-period other
comprehensive income (loss)			780		(307)		306		779
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the three months ending September 30, 2013

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(2,444)	Interest expense
	Foreign exchange contracts		(51)	Other revenues
			(2,495)	Total before tax
			-	Tax (expense) or benefit
			(2,495)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		25	A&G Expense
	Actuarial losses		281	A&G Expense
			306	Total before tax
			-	Tax (expense) or benefit
			306	Net of tax
Total reclassifications for the period		$	(2,189)	Net of tax

Changes in Accumulated Other Comprehensive Loss by Component

For the nine months ending September 30, 2014

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2014		$	(4,279)	$	(414)	$	(9,217)	$	(13,910)
	Other comprehensive income (loss)
	before reclassification		1,643		(67)		-		1,576
	Amount reclassified from accumulated
	other comprehensive income (loss)		(1,221)		-		225		(996)
Net current-period other
comprehensive income (loss)			422		(67)		225		580
Ending balance as of September 30, 2014		$	(3,857)	$	(481)	$	(8,992)	$	(13,330)

*The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the nine months ending September 30, 2014

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,105)	Interest expense
	Foreign exchange contracts		(116)	Other revenues
			(1,221)	Total before tax
			-	Tax (expense) or benefit
			(1,221)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		73	A&G Expense
	Actuarial losses		227	A&G Expense
			300	Total before tax
			(75)	Tax (expense) or benefit
			225	Net of tax
Total reclassifications for the period		$	(996)	Net of tax

Changes in Accumulated Other Comprehensive Loss by Component

For the nine months ending September 30, 2013

(All Amounts in Thousands)			Gains and Losses on Derivatives Fair Value *		Unrealized Translation (Loss) Income		Defined Benefit Pension Items		Total
Beginning balance as of January 1, 2013		$	(7,352)	$	(350)	$	(17,244)	$	(24,946)
	Other comprehensive income
	before reclassification		4,070		(61)		-		4,009
	Amount reclassified from accumulated
	other comprehensive income		(1,782)		-		927		(855)
Net current-period other
comprehensive income (loss)			2,288		(61)		927		3,154
Ending balance as of September 30, 2013		$	(5,064)	$	(411)	$	(16,317)	$	(21,792)

*The fair value balance as of September 30, 2013, includes a negative $717,000 balance related to an interest rate swap from our 25% investment in Oslo Bulk AS.

Reclassifications out of Accumulated Other Comprehensive Loss

For the nine months ending September 30, 2013

(All Amounts in Thousands)
Details about Accumulated Other Comprehensive Loss Components			Amount Reclassified from Accumulated Other Comprehensive Loss	Affected Line Item in the Statement Where Net Income (Loss) is Presented
Gains and losses on derivatives fair value
	Interest rate contracts	$	(1,796)	Interest expense
	Foreign exchange contracts		14	Other revenues
			(1,782)	Total before tax
			-	Tax (expense) or benefit
			(1,782)	Net of tax
Amortization of defined benefit pension items
	Prior service costs		75	A&G Expense
	Actuarial losses		852	A&G Expense
			927	Total before tax
			-	Tax (expense) or benefit
			927	Net of tax
Total reclassifications for the period		$	(855)	Net of tax

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Other Long Term Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Other Long Term Liabilities [Abstract]

Other Long Term Liabilities

		September 30,		December 31,
(All Amounts in Thousands)		2014		2013
Deferred Gains, net of Amortization	$	18,853	$	34,009
Pension and Post Retirement		9,851		10,339
Alabama Lease Incentive		6,026		6,887
Insurance Reserves		4,591		5,521
Derivatives		5,262		4,412
Other		2,463		4,138
	$	47,046	$	65,306

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Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 18. Fair Value Measurements

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Under ASC 820, the price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, and (iii) able and willing to complete a transaction.

Fair value measurements require the use of valuation techniques that are consistent with one or more of the following: the market approach, the income approach or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. The fair value of our interest rate swap agreements is based upon the approximate amounts required to settle the contracts.  Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In that regard, ASC 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

§ Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

§ Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (including interest rates, volatilities, prepayment speeds, credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.

§ Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

The following table summarizes our financial assets and financial liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2014, segregated by the above-described levels of valuation inputs:

(All Amounts in Thousands)		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Assets	$	-	$	7	$	-	$	7
Derivative Liabilities	$	-	$	(5,377)	$	-	$	(5,377)

The carrying amounts of our accounts receivable, accounts payable and accrued liabilities approximated their fair value at September 30, 2014 and December 31, 2013. We estimated the fair value of our variable rate long-term debt at September 30, 2014, including current maturities, to equal approximately $254.7 million due to the variable rate nature of the debt as well as to the underlying value of the collateral.  We have determined that credit risk is not a material factor.

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Stockholders' Equity (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended			3 Months Ended	12 Months Ended
	Sep. 30, 2014	Aug. 31, 2014	Jul. 31, 2014	Jun. 30, 2010	Dec. 31, 2008	Jan. 25, 2008
Stockholders' Equity [Abstract]
Shares authorized for repurchase (in shares)						1,000,000
Total number of shares purchased (in shares)				223,051	491,572
Payments for shares purchased				$ 5.2	$ 11.5

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Basis Of Preparation

9 Months Ended

Sep. 30, 2014

Basis Of Preparation [Abstract]

Basis Of Preparation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

(Unaudited)

Note 1.  Basis of Preparation

We operate a diversified fleet of U.S. and International flag vessels that provide international and domestic maritime transportation services. For additional information on our business, see Item 2 of Part I of this report.

We have prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, and as permitted hereunder, we have omitted certain information and footnote disclosures required by U.S. Generally Accepted Accounting Principles (GAAP) for complete financial statements.  We suggest that you read these interim statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013.  The condensed consolidated balance sheet as of December 31, 2013 included in this report has been derived from the audited financial statements at that date.

The foregoing 2014 interim results are not necessarily indicative of the results of operations for the full year 2014.  Management believes that it has made all adjustments necessary, consisting only of normal recurring adjustments, for a fair statement of the information presented.

Our policy is to consolidate each subsidiary in which we hold a greater than 50% voting interest or otherwise control its operating and financial activities.  We use the equity method to account for investments in entities in which we hold a 20% to 50% voting or economic interest and have the ability to exercise significant influence over operating and financial activities, and the cost method to account for investments in entities in which we hold a less than 20% voting interest and in which we cannot exercise significant influence over operating and financial activities.

Revenues and expenses relating to our Rail-Ferry, Jones Act, and Specialty segments’ voyages are recorded over the duration of the voyage based on percentage of completion.  Our voyage expenses are estimated at the beginning of the voyages based on historical actual costs or from industry sources familiar with those types of charges.  As the voyage progresses, these estimated costs are revised with actual charges and timely adjustments are made.  Based on our prior experience, we believe there is not a material difference between recording estimated expenses ratably over the voyage versus recording expenses as incurred.  Revenues and expenses relating to our other vessels’ voyages, which require limited estimates or assumptions, are recorded when earned or incurred during the reporting period.

We have eliminated all significant intercompany balances, accounts, and transactions in consolidation.

Certain amounts in the condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. Such reclassifications primarily relate to a related party receivable that was reclassified as other current assets versus note receivable in the balance sheet.

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Condensed Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net (Loss) Income	$ (2,565)	$ (2,222)	$ (6,446)	$ 1,290	$ 18,532
Other Comprehensive Income (Loss):
Unrealized Foreign Currency Translation Loss	(84)	(307)	(67)	(61)
Change in Fair Value of Derivatives	457	780	422	2,289
Change in Funding Status of Defined Benefit Plan	74	306	225	927
Comprehensive (Loss) Income	$ (2,118)	$ (1,443)	$ (5,866)	$ 4,445	$ 29,538

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Long-Term Debt

9 Months Ended

Sep. 30, 2014

Long-Term Debt [Abstract]

Long-Term Debt

Note 11. Long-Term Debt  

During the quarter ended September 30, 2014, we entered into a new loan agreement for the purchase of our 2007 PCTC that we had previously been operating under a sale-leaseback arrangement.  Under this new loan agreement, we borrowed$38.5 million at a fixed rate of 4.35% with 24 quarterly payments with a final quarterly balloon payment of $20.7 million due on August 28, 2020.  We incurred deferred loan costs in the amount of approximately $519,000 on the new loan.  The new loan agreement requires us to pre-fund a portion of the upcoming quarterly scheduled debt payment currently constituting$387,000, which amount is classified as restricted cash on the balance sheet.  See Note 21 – Early Lease Buy Back for more information on this transaction.  During the quarter ended September 30, 2014, we also refinanced one of our 1999 PCTCs by paying off all $11.4 million of our bank debt owed to DnB ASAand borrowing $23.0 million under a new loan agreement with RBS Asset Finance.  Under this new RBS loan agreement, we are obligated to pay variable interest at a 30 day Libor rate plus 2.75%and principal amortized over84 monthly payments plus a final payment in August 2021.  The new loan costs and the old unamortized loan costs of approximately $230,000 and $225,000, respectively, were expensed as losses on the debt extinguishment.

On September 24, 2013, we entered into a new senior secured Credit Facility. The Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a revolving credit facility (“LOC”) in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.  The Credit Facility has four lenders, each with commitments ranging from $15 million to $30 million. The facility carries an accordion feature, whereby an additional term loan up to $50 million may be advanced at the sole discretion of the lenders subject to certain financial requirements.

In conjunction with entering into the new Credit Facility, we used the Credit Facility to refinance and retire all indebtedness outstanding under our previously-existing revolving credit facility originally scheduled to expire in September 2014 and our five-year variable rate financing agreement we entered into on November 30, 2012.  As a result, both the old revolving credit facility and the old five-year variable rate facilities were terminated concurrently with the establishment of the new Credit Facility. The total amount paid off was approximately $46.6 million, with $21.0 million of this amount drawn from the new LOC.  We categorized this refinancing as a debt extinguishment. The total fees associated with this facility included $1.4 million of bank fees and $148,000 of third party fees. All bank fees associated with the term loan facility were expensed during the third quarter of 2013, while all the fees associated with new LOC facility are being amortized over the term of the Credit Facility.

As of the dates indicated below, long-term debt consisted of the following:

		Interest Rate					Total Principal Due
(All Amount in Thousands)		September 30,		December 31,		Maturity	September 30,		December 31,
Description of Secured Debt		2014		2013		Date	2014		2013
Notes Payable – Variable Rate	(1)	2.7331	%	2.7451	%	2018	$	12,884	$	15,460
Notes Payable – Variable Rate		2.7346-2.7381	%	2.7400	%	2018		42,320		45,081
Notes Payable – Variable Rate		2.5040	%	2.5188	%	2017		9,704		11,383
Notes Payable – Variable Rate	(5)	2.9015	%	2.9181	%	2021		22,766		12,780
Notes Payable – Variable Rate	(1)	2.7326	%	2.7384	%	2018		15,708		16,651
Notes Payable – Variable Rate	(2)	3.6179	%	2.8964	%	2020		27,866		31,437
Notes Payable – Variable Rate	(3)	3.9900	%	3.7500	%	2018		42,750		44,437
Notes Payable – Fixed Rate	(4)	4.3500	%	N/A		2020		38,500		-
Note Payable - Mortgage	(6)							5		-
Line of Credit	(3)	3.9100	%	3.6700	%	2018		41,000		21,000
								253,503		198,229
		Less Current Maturities						(23,347)		(19,213)
							$	230,156	$	179,016

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Capesize vessel and a Supramax Bulk Carrier newbuilding, both of which we acquired a 100% interest in as a result of our acquisition of Dry Bulk.  Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.1 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, we drew $6.1 million in November 2011 and $12.7 million in January 2012.

2. We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 5.565%. The swap agreement is for the same term as the associated note payable.

3. As described in greater detail above, our senior secured Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a LOC in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.

4. We entered into a fixed rate financing agreement with DVB Bank SE, on August 26, 2014 in the amount of $38.5 million, collateralized by our 2007 PCTC at a rate of 4.35% with 24 quarterly payments with a final balloon payment of $20.7 million in August 2020.

5. During August 2014, we paid off our $11.4 million loan with DnB ASA and obtained a new loan with RBS Asset Finance in the amount of $23.0 million collateralized by one of our 1999 PCTCs at a variable rate of 30 day Libor rate plus 2.75% payable in 84 monthly installments with the final payment due August 2021.

6. Represents consideration given in connection with the proposed construction financing relating to the building we plan to renovate as our new New Orleans headquarters building.

All of our principal credit agreements and operating leases require us to comply with various loan covenants, including financial covenants that require minimum levels of net worth, working capital, liquidity, and interest expense or fixed charges coverage and a maximum amount of debt leverage.  During first quarter of 2014, there was concern that we would be unable to meet all of our required debt covenants for the quarter.  During the period endingMarch 31, 2014, our principal senior secured lenders and two of our lessors agreed to, among other things, defer the date upon which we were required to attain a more stringent leverage ratio and increased liquidity from December 31, 2013 to June 30, 2014.  Under these terms, we are required to maintain a consolidated leverage ratio of 4.50 to 1.0 through the fiscal quarter ending June 30, 2014, and 4.25 to 1.0 thereafter, and liquidity of not less than $15 million through June 30, 2014 and $20 million thereafter. 

EffectiveSeptember 30, 2014,  certain of our lenders and lessors agreed at our request to adjust our covenants to less stringent levels to provide relief from the accounting impact of our above-described August 2014 vessel purchase and refinancing transactions (which, as noted in Note 21, required us to reduce our cost basis in the purchased vessel).Two of our lenders have elected to adjust our definition of EBITDA to disregard the impact of these transactions, while the remainder of our lenders and lessors agreed to amend the consolidated leverage and fixed charge coverage ratios as follows: we are required to maintain a consolidated leverage ratio of 5.00 to 1.0 through the fiscal quarter ending December 31, 2015,  then 4.75 to 1.0 through the fiscal quarter ending March 31, 2016, then 4.50 to 1.0 beginning the quarter ending June 30, 2016 through the quarter ending September 30, 2016, and 4.25 to 1.0 thereafter and the minimum fixed charge coverage ratio we are required to maintain is 1.10 to 1.0 beginning with the quarter ending September 30, 2014 through the quarter ending December 31, 2014, 1.15 to 1.0 beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015, 1/20 to 1.0 beginning with the quarter ending March 31, 2016 through the quarter ending June 30, 2016, and 1.25 to 1.0 thereafter (in each case as calculated under our amended debt agreements).  Consequently, as of September 30, 2014, we were in compliance with all of our debt covenants.

Based on current conditions and our expectations that our performance will stabilize or improve marginally in the near term, we currently believe that we will be able to attain all of our financial covenants through the end of 2014, but we cannot assure you of this.

In addition to the restrictions under our new Credit Facility, certain of our loan agreements restrict the ability of our subsidiaries to dispose of collateralized assets or any other asset which is substantial in relation to our assets taken as a whole without the approval from the lender.  We believe that we have consistently remained in compliance with this provision of these loan agreements.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	INTERNATIONAL SHIPHOLDING CORP
Entity Central Index Key	0000278041
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	7,301,657
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014

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Other Long Term Liabilities

9 Months Ended

Sep. 30, 2014

Other Long Term Liabilities [Abstract]

Other Long Term Liabilities

Note 12. Other Long Term Liabilities

Other Long Term Liabilities for the period ending September 30, 2014 and December 31, 2013 were $47.0 million and $65.3 million, respectively.

		September 30,		December 31,
(All Amounts in Thousands)		2014		2013
Deferred Gains, net of Amortization	$	18,853	$	34,009
Pension and Post Retirement		9,851		10,339
Alabama Lease Incentive		6,026		6,887
Insurance Reserves		4,591		5,521
Derivatives		5,262		4,412
Other		2,463		4,138
	$	47,046	$	65,306

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Subsequent Events (Details) (USD $)				3 Months Ended	9 Months Ended	3 Months Ended			9 Months Ended	0 Months Ended	3 Months Ended
	Oct. 29, 2014 Subsequent Event [Member]	Oct. 29, 2014 Subsequent Event [Member] Minimum [Member]	Oct. 29, 2014 Subsequent Event [Member] Maximum [Member]	Sep. 30, 2014 Handy-Size Vessels And Integrated Barge And Tug Unit [Member]	Sep. 30, 2014 Handy-Size Vessels And Integrated Barge And Tug Unit [Member]	Dec. 31, 2014 Handy-Size Vessels And Integrated Barge And Tug Unit [Member] Scenario, Forecast [Member] Minimum [Member]	Dec. 31, 2014 Handy-Size Vessels And Integrated Barge And Tug Unit [Member] Scenario, Forecast [Member] Maximum [Member]	Sep. 30, 2014 Tanker [Member]	Sep. 30, 2014 Tanker [Member]	Nov. 14, 2014 Tanker [Member] Scenario, Forecast [Member]	Dec. 31, 2014 Tanker [Member] Scenario, Forecast [Member]
Subsequent Event [Line Items]
Approximate amount in net proceeds that could be generated after retiring debt		$ 18,000,000	$ 20,000,000
Approximate amount of debt retired	42,000,000
Impairment loss				0	0	25,000,000	30,000,000	0	0		3,100,000
Approximate proceeds from sale of other assets										$ 1,600,000

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Cash and Cash Equivalents	$ 21,024	$ 20,010
Restricted Cash	1,387	8,499
Accounts Receivable, Net of Allowance for Doubtful Accounts	39,751	30,417
Prepaid Expenses	10,518	8,493
Deferred Tax Asset	633	3,084
Other Current Assets	1,038	1,029
Notes Receivable	3,204	3,987
Material and Supplies Inventory	11,243	11,322
Total Current Assets	88,798	86,841
Investment in Unconsolidated Entities	22,472	14,818
Vessels, Property, and Other Equipment, at Cost:
Vessels	630,090	582,416
Building	1,354	1,211
Land	623	623
Leasehold Improvements	26,348	26,348
Construction in Progress	4,867	2,673
Furniture and Equipment	12,272	11,727
Property, Plant and Equipment Total, Gross	675,554	624,998
Less - Accumulated Depreciation	(196,302)	(175,106)
Net Vessels, Property, Plant and Equipment	479,252	449,892
Other Assets:
Deferred Charges, Net of Accumulated Amortization	25,984	29,309
Intangible Assets, Net of Accumulated Amortization	25,669	28,756
Due from Related Parties	2,083	1,974
Notes Receivable	25,256	27,659
Goodwill	2,735	2,735
Deferred Tax Asset	8,866	7,325
Other	4,940	7,383
Other Assets Total	95,533	105,141
TOTAL ASSETS	686,055	656,692
Current Liabilities:
Current Maturities of Long-Term Debt	23,347	19,213
Accounts Payable and Other Accrued Expenses	54,901	51,220
Total Current Liabilities	78,248	70,433
Long-Term Debt, Less Current Maturities	230,156	179,016
Other Long-Term Liabilities:
Incentive Obligation	8,872	5,397
Other	47,046	65,306
TOTAL LIABILITIES	364,322	320,152
Stockholders' Equity:
Common Stock, $1.00 Par Value, 20,000,000 Shares Authorized, 7,301,669 and 7,203,935 Shares Issued and Outstanding at June 30, 2014 and December 31, 2013, Respectively	8,727	8,692
Additional Paid-In Capital	140,624	140,115
Retained Earnings	210,549	226,480
Treasury Stock, 1,388,066 Shares at June 30, 2014 and December 31, 2013, Respectively	(25,403)	(25,403)
Accumulated Other Comprehensive Loss	(13,330)	(13,910)
TOTAL STOCKHOLDERS' EQUITY	321,733	336,540
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	686,055	656,692
9.50% Series A Preferred Stock [Member]
Stockholders' Equity:
Preferred Stock, $1.00 Par Value	250	250
9.00% Series B Preferred Stock [Member]
Stockholders' Equity:
Preferred Stock, $1.00 Par Value	$ 316	$ 316

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Goodwill, Other Intangible Assets, And Deferred Charges

9 Months Ended

Sep. 30, 2014

Goodwill, Other Intangible Assets, And Deferred Charges [Abstract]

Goodwill, Other Intangible Assets, And Deferred Charges

Note 6.  Goodwill, Other Intangible Assets, and Deferred Charges

Amortization expense for intangible assets was approximately $1.0 million and $1.5 million for the three months ended September 30, 2014 and 2013, respectively.  Amortization expense for deferred charges was approximately $5.7 million and $3.3 million for the three months ended September 30, 2014 and 2013, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred chargesfor the three months endedSeptember 30, 2014:

(All Amounts in Thousands)
	Amortization Period	Balance at      June 30, 2014		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	58	$	-	$	-	$	-	$	58
Trade names - UOS	96 months		1,449		-		(57)		-		1,392
Customer Relationships - FSI	240 months		386		-		(6)		-		380
Customer Relationships - UOS	96 months		24,805		-		(966)		-		23,839
Total Definite Life Intangibles		$	26,698	$	-	$	(1,029)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	22,284	$	2,940	$	(5,154)	$	2,520	$	22,590
Financing Charges and Other	various		2,991		619		(563)		347		3,394
Total Deferred Charges		$	25,275	$	3,559	$	(5,717)	$	2,867	$	25,984

Amortization expense for intangible assets was approximately $3.1 million and $4.6 million for the nine months ended September 30, 2014 and 2013, respectively.  Amortization expense for deferred charges was approximately $14.6 million and $7.5 million for the nine months ended September 30, 2014 and 2013, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred charges for the nine months ended September 30, 2014:

(All Amounts in Thousands)
	Amortization Period	Balance at December 31, 2013		Additions		Amortization		Non-Cash Additions		Balance at September 30, 2014
Indefinite Life Intangibles
Goodwill	n/a	$	2,735	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	60	$	-	$	(2)	$	-	$	58
Trade names - UOS	96 months		1,561		-		(169)		-		1,392
Customer Relationships - FSI	240 months		396		-		(16)		-		380
Customer Relationships - UOS	96 months		26,739		-		(2,900)		-		23,839
Total Definite Life Intangibles		$	28,756	$	-	$	(3,087)	$	-	$	25,669
Deferred Charges
Drydocking Costs	various	$	26,428	$	7,038	$	(13,745)	$	2,869	$	22,590
Financing Charges and Other	various		2,881		1,034		(868)		347		3,394
Total Deferred Charges		$	29,309	$	8,072	$	(14,613)	$	3,216	$	25,984

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Investment In Unconsolidated Entities

9 Months Ended

Sep. 30, 2014

Investment In Unconsolidated Entities [Abstract]

Investment In Unconsolidated Entities

Note 5.  Investment in Unconsolidated Entities

The following table summarizes our equity in net loss of unconsolidated entities for the three and nine months ended September  30, 2014 and 2013, respectively.

		Three Months ended September 30,				Nine Months Ended September 30,
		2014		2013		2014		2013
(All Amounts in Thousands)
Oslo Bulk, AS	$	(55)	$	(193)	$	(142)	$	(290)
Oslo Bulk Holding Pte, Ltd		(318)		(122)		(400)		(363)
Terminales Transgolfo,  S . A .  D E  C . V .		(81)		(45)		(148)		(52)
Brattholmen Shipping, Ltd		30		-		30		-
Saltholmen Shipping, Ltd		248		-		296		-
Total Equity in Net Loss of Unconsolidated Entities	$	(176)	$	(360)	$	(364)	$	(705)

These investments have been accounted for under the equity method and our portion of their earnings or losses is presented net of any applicable taxes on our condensed consolidated statements of income (loss) under the caption: "Equity in Net Loss of Unconsolidated Entities (Net of Applicable Taxes).”

During 2014, we invested approximately $5.9 million cash and $2.0 million cash to acquire a 30% interest in Saltholmen Shipping Ltd and Brattholmen Shipping Ltd, respectively.  Brattholmen Shipping Ltd was organized to purchase and operate two Asphalt Tankers.  Saltholmen Shipping Ltd was organized to purchase and operate two newbuildingChemicalTankers.  All four vessels were immediately employed on long-term bareboat charters. 

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Note 17.  Earnings Per Share

We compute basic earnings per share based on the weighted average number of common shares outstanding during the relevant periods.  Diluted earnings per share also reflect dilutive potential common shares, including shares issuable under restricted stock units using the treasury stock method.  The calculation of basic and diluted earnings per share is as follows:

(All Amounts in Thousands Except per Share Data)

	Three Months Ended Sept 30,				Nine Months Ended Sept 30,
	2014		2013		2014		2013
Numerator
Net (Loss) Income	$	(2,565)	$	(2,222)	$	(6,446)	$	1,290
Preferred Stock Dividends		1,305		1,076		3,916		1,920
Net (Loss) Income Available to Common Stockholders	$	(3,870)	$	(3,298)	$	(10,362)	$	(630)
Denominator
Weighted Average Shares of Common Stock
Outstanding:
Basic		7,301,657		7,248,350		7,278,695		7,233,807
Plus:
Effect of dilutive restrictive stock		-		-		-		-
Diluted		7,301,657		7,248,350		7,278,695		7,233,807
Basic Earnings Per Common Share:
Net (Loss) Income per share - Basic	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)
Net (Loss) Income per share - Diluted:	$	(0.53)	$	(0.46)	$	(1.42)	$	(0.09)

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Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Stock Based Compensation [Abstract]

Stock Based Compensation

Note 13.  Stock Based Compensation

We grant stock-based compensation in the form of (1) unrestricted stock awards to our outside directors and (2) restricted stock units (“RSUs”) to key executive personnel.  These awards are granted under the International Shipholding Corporation 2011 Stock Incentive Plan (the “Plan”), which was approved by our stockholders in 2011.

Unrestricted Stock Awards

On January 15, 2013, we granted our outside directors an aggregate of 6,708 unrestricted shares of common stock from the Plan.  On January 14, 2014, we granted our outside directors an aggregate of 4,470 unrestricted shares of common stock from the Plan.  For the nine months ended September 30, 2014 and 2013, our net income reflected approximately $90,000 of stock-based compensation expense charges related to these issuances, which had no effect on either basic or diluted earnings per share.

A summary of the activity for stock awards during the nine months ended September 30, 2014, is as follows:

	2014
	Shares		Weighted Average Fair Value Per Share
Non-vested - December 31, 2013	-		-
Unrestricted Shares Granted	4,470	$	26.80
Shares Vested	(4,470)	$	26.80
Non-vested - September 30, 2014	-		-

Restricted Stock Units

General Terms

We grant restricted stock units to key executive personnel under the Plan.  Each year, we have granted awards that vest based on continued service (“Time-Based RSUs”) as well as awards that vest based on a combination of performance metrics and continued service (“Performance-Based RSUs”).  Subject to certain exceptions, our Time-Based RSUs generally vest one-third per year over a three-year period.  Each of our Performance-Based RSUs represents the right to receive a maximum of one-and-a-half shares of common stock, depending upon performance.  We grant two types of Performance-Based RSUs – one for which vesting is contingent upon an absolute metric, our earnings per share (our “Absolute Performance-Based RSUs”), and another for which vesting is contingent upon our performance as measured against a relative metric, our relative total shareholder return (our “Relative Performance-Based RSUs”).

For our top four executives, their Absolute Performance-Based RSUs vest and pay out in the year following the grant.  For each other recipient, the Absolute Performance-Based RSUs vest and pay out one-third per year over the three years following grant, based on the achievement of the metric in the first year.  With respect to the Relative Performance-Based RSUs, vesting is contingent upon our total stockholder return for a given period as compared to the companies comprising the Russell 2000 index for the same period.  For our top four executives, the performance of their Relative Performance-Based RSUs is measured over a one-year period (the calendar year of the grant), while for each other recipient the performance of their Relative Performance-Based RSUs is measured at the end of the third year (through December 31 of the third year following the grant).  For all RSUs, vesting is contingent upon continued employment with the Company except in certain limited circumstances.

For the three months ended September 30, 2014 and 2013, our net income reflected $322,000 and $272,000, respectively, of RSU stock-based compensation expense charges.  For the nine months ended September 30, 2014 and 2013, our net income reflected $1.1 million and $933,000, respectively, of RSU stock-based compensation expense charges.

2012 Grants

In 2012, we achieved maximum performance on our Absolute Performance-Based RSUs, and 21,564 shares of common stock vested and were paid out in 2013.  In May 2014, an additional 1,500 shares vested and were paid out. The remaining 1,500 RSUs will vest and pay out in May 2015.  With respect to our Relative Performance-Based RSUs, for our top four executives, whose awards were measured over a one-year performance period, our relative rank was in the 27th percentile, and therefore those awards paid out at 53% of grant (21,564 shares of common stock) in 2013.  Vesting of the remainder of Relative Performance-Based RSUs granted in 2012 is based on our relative TSR rank over a three-year measurement period, and therefore those 1,500 RSUs will vest and be paid out in 2015 based on our relative performance as determined following the end of the performance period (December 31, 2014).

2013 Grants

In 2013, we achieved maximum performance on our Absolute Performance-Based RSUs, and 8,450 shares of common stock vested and paid out on May 7, 2014.  The remaining 3,525 RSUs will vest and pay out ratably in May 2015 and 2016.  With respect to our Relative Performance-Based RSUs, for our top four executives, whose awards were measured over a one-year performance period, our relative rank was in the 79th percentile, and therefore those awards paid out at 150% of grant (20,064 shares of common stock) on May 7, 2014.  The remainder of Relative Performance-Based RSUs granted in 2013 will vest based on our relative TSR rank over a three-year measurement period, and therefore those 3,525 RSUs will be vest and be paid out in 2016 based on our relative performance as determined following the end of the performance period (December 31, 2015). 

2014 Grants

On January 28, 2014, we granted 7,950 Time-Based RSUs, 17,351 Absolute Performance-Based RSUs, and 17,349 Relative Performance-Based RSUs.

Fair Values

The fair value of the Time-Based RSUs was calculated based on the closing market price of our stock as of the grant date times the number of RSUs issued with no forfeitures assumed. For our 2014, 2013, and 2012 awards, we used the closing market price of our stock on January 28, 2014, April 23, 2013, and May 7, 2012 which was $25.95,  $17.66, and $19.35 per share, respectively. The Performance-Based RSUs are subject to vesting upon two different performance metrics: an Absolute Performance-Based metric based on targeted earnings per share and a Relative Performance-Based metric based on our total stockholder return over a given period as measured against that of the other companies in the Russell 2000 index.  In order to calculate the fair value of our Absolute Performance-Based RSUs, we multiplied the closing market price of our stock as of the grant date times the number of RSU’s issued with no forfeitures assumed. We measured our RelativePerformance-Based RSUs based on market conditions on the grant date. In order to derive the fair value of these awards, we used a Monte-Carlo simulation statistical technique to simulate our future stock prices and the components of the Russell 2000 Index. The stock prices were based upon the risk-free rate of return, the volatility of each entity, and the correlation of each entity with the Russell 2000 Index. We multiplied our ending simulated stock price by the payout percentage to determine a projected payout at the end of the performance period. The ending payout was then discounted, using the risk-free rate of return, to the grant date to determine the grant date fair value. Since 2014, 2013, and 2012 all provide for one year vesting (for the top four named executive officers) and three year vesting (for all other award recipients), a fair value was calculated separately for the one and three year awards for each year.

The following assumptions were used:

	2014 Awards						2013 Awards						2012 Awards
	1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest			1 Year Vest			3 Year Vest
Stock Price	$	25.95		$	25.95		$	17.66		$	17.66		$	19.35		$	19.35
Expected Volatilities		44.30	%		40.02	%		33.50	%		37.03	%		44.31	%		40.50	%
Correlation Coefficients		0.374			0.554			0.473			0.625			0.719			0.694
Risk Free Rate		0.10	%		0.72	%		0.10	%		0.31	%		0.16	%		0.34	%
Dividend Yield		3.85	%		3.85	%		5.70	%		5.70	%		5.17	%		5.17	%
Simulated Fair Value	$	23.03		$	25.46		$	15.33		$	16.57		$	17.73		$	18.88
Fair Value as a % of Grant		88.74	%		98.10	%		86.81	%		93.83	%		91.63	%		97.57	%

Our operating results, net income (loss) and net income (loss) before taxes for the periods set forth below include (i) the following amounts of compensation expense associated with the stock grants and RSUs and (ii) the related reductions in earnings per share: 

	Three Months ended September 30,				Nine Months ended September 30,
	2014		2013		2014		2013
Stock-Based Compensation
Expense:
Stock Grants to Outside Directors	$	30,000	$	30,000	$	90,000	$	90,000
RSUs Awards to Officers	$	322,000	$	272,000	$	1,093,000	$	933,000
Related Reduction in
Earnings Per Share 1	$	(0.03)	$	(0.03)	$	(0.11)	$	(0.09)
1  Same for basic and diluted earnings per share

In all cases, vesting is contingent upon continued employment with the company. A summary of the activity for the restricted stock awards during the nine months ended September 30, 2014, is as follows:

	Number of RSU's		Weighted Average Grant Date Fair Value
Non-vested - December 31, 2013	131,100	$	18.77
Additional Awards Granted	15,138		16.63
Awards Granted	42,650		24.99
Awards Exercised	(48,849)		24.97
Awards Cancelled	(25,639)		24.97
Non-vested - September 30, 2014	114,400	$	22.07

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2014

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 9.  Employee Benefit Plans

The following table provides the components of net periodic benefit cost for our pension plan and postretirement benefits plan for the three months ended September 30, 2014 and 2013:

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Three Months Ended September 30,				Three Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	155	$	124	$	4	$	6
Interest cost		381		330		144		119
Expected return on plan assets		(571)		(560)		-		-
Amortization of prior service cost		(1)		(1)		25		25
Amortization of Net Loss		32		220		44		63
Net periodic benefit cost (benefit)	$	(4)	$	113	$	217	$	213

The following table provides the components of net periodic benefit cost for our pension plan and postretirement benefits plan for the nine months ended September 30, 2014 and 2013:

		Pension Plan				Postretirement Benefits
(All Amounts in Thousands)		Nine Months Ended September 30,				Nine Months Ended September 30,
Components of net periodic benefit cost:		2014		2013		2014		2013
Service cost	$	464	$	504	$	11	$	18
Interest cost		1,143		1,002		433		357
Expected return on plan assets		(1,797)		(1,674)		-		-
Amortization of prior service cost		(2)		(3)		75		75
Amortization of Net Loss		96		666		131		189
Net periodic benefit cost (benefit)	$	(96)	$	495	$	650	$	639

We contributed $450,000 to our pension plan during the nine months ended September 30, 2014. We contributed another $150,000 in October 2014, which we expect to be the final payment for 2014.

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Derivative Instruments (Notional Amount Of Foreign Exchange Contracts) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Derivative [Line Items]
Derivatives, current notional amount	$ 31,231
Foreign Exchange Contract 1 [Member]
Derivative [Line Items]
Transaction Date	2013-08
Derivatives, current notional amount	300
Effective Date	2014-01
Expiration Date	2014-12
Foreign Exchange Contract 2 [Member]
Derivative [Line Items]
Transaction Date	2013-11
Derivatives, current notional amount	150
Effective Date	2014-01
Expiration Date	2014-12
Foreign Exchange Contract 3 [Member]
Derivative [Line Items]
Transaction Date	2014-09
Derivatives, current notional amount	900
Effective Date	2015-01
Expiration Date	2015-12
Foreign Exchange Contract 4 [Member]
Derivative [Line Items]
Transaction Date	2014-05
Derivatives, current notional amount	831
Effective Date	2014-05
Expiration Date	2014-12
Foreign Exchange Contract 5 [Member]
Derivative [Line Items]
Transaction Date	2014-05
Derivatives, current notional amount	831
Effective Date	2014-05
Expiration Date	2015-03
Foreign Exchange Contract 6 [Member]
Derivative [Line Items]
Transaction Date	2014-05
Derivatives, current notional amount	$ 28,219
Effective Date	2015-01
Expiration Date	2015-12

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Taxes [Abstract]

Income Taxes

Note 7.  Income Taxes

We recorded a tax provision of $912,000 on our $5.2 million of loss before taxes and equity in net loss of unconsolidated entities for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, we recorded an income tax provisionof$68,000 on our $2.1 million of income before taxes and equity in net loss of unconsolidated entities. In general, the company’s interim tax provision for the nine months ended September 30, 2014, is determined by applying an estimated annual effective tax rate to the year to date earnings subject to U.S. income taxes, which are primarily our U.S. flag Jones Act results from operations.  Included in both our 2014 and 2013 tax provisions are taxes on our qualifying U.S. flag operations, which continue to be taxed under a “tonnage tax” regime rather than under the normal U.S. corporate income tax regime.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2013, including “Note J - Income Taxes” to the consolidated financial statements included therein.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2014

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note 8.  Commitments and Contingencies

Commitments

Leases

On August 26, 2014, we reacquired a US flagged PCTC that we had previously been operating under a sale-leaseback arrangement.  The vessel purchase was financed through conventional bank financing.  For more information, see Note 21 – Early Lease Buy Out.  For more information about our leases, please see our Annual Report on Form 10-K for the year ended December 31, 2013.

Investment in newbuildingHandysize Dry Bulk Carrier

During the third quarter of 2014, we were notified of the bankruptcy of a ship builder that had agreed to build a new Handysize Dry Bulk Carrier for an entity in which we are an investor.  In accordance with the terms of the shipbuilding contract, the contract was terminated and all deposits to date are to be refunded by the guarantor bank within thirty days of notice.  As of September 30, 2014, we reclassified our $3.8 million deposit towards the purchase price of this vessel plus interest of $300,000 from construction in progress to a current receivable.  We believe the $4.1 million to be collectible within twelve months of September 30, 2014.

Letters of Credit

As of September 30, 2014, we have approximately $9.0 million in outstanding letters of credit, $8.0 million of which were issued under our revolving credit facility.

Contingencies

On June 26, 2014, U.S. Customs and Border Protection (CBP) issued pre-penalty notifications to us and two of our affiliates alleging failure to properly report the importation of spare parts incorporated intoour vessels covering the period April 2008 through September 2012.  CBP’s proposed duty is approximately $2.1 million along with a proposed penalty on the assessment of approximately $8.4 million.  The basis of CBP’s assessment is that the U. S. Government experienced a loss of revenue consisting of the difference between the government’s ad valorem duty and the consumption entry duty actually paid by us.  On September 24, 2014, we submitted our formal response to CBP’s claim and denied violating the applicable U.S. statute or regulations.We have not accrued a liability for this matter because the case is ongoing and we do not consider it probable that we will incur a loss.

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Derivative Instruments

9 Months Ended

Sep. 30, 2014

Derivative Instruments [Abstract]

Derivative Instruments

Note 10.  Derivative Instruments

We use derivative instruments from time to time to manage certain foreign currency and interest rate risk exposures. We do not use derivative instruments for speculative trading purposes.  All derivative instruments are recorded on the balance sheet at fair value.  For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is recorded through other comprehensive income and reclassified to earnings when the derivative instrument is settled.  Any ineffective portion of changes in the fair value of the derivative is reported in earnings.  None of our derivative contracts contain credit-risk related contingent features that would require us to settle the contract upon the occurrence of such contingency.  However, all of our contracts contain clauses specifying events of default under specified circumstances, including failure to pay, breach of agreement, default under the specific agreement to which the hedge relates, bankruptcy, misrepresentation and the occurrence of certain transactions.  The remedy for default is settlement in entirety or payment of the fair value of the contracts, which was $5.4 million in the aggregate for all of our contracts as of September 30, 2014.  The unrealized loss related to our derivative instruments included in accumulated other comprehensive loss, net of taxes, was $3.9 million and $4.3 million as of September 30, 2014 and December 31, 2013, respectively.  

The notional and fair value amounts of our derivative instruments as of September 30, 2014 were as follows:

			Asset Derivatives			Liability Derivatives
			2014			2014
		Current Notional	Balance Sheet		Fair Value	Balance Sheet		Fair Value
(All Amounts in Thousands)		Amount	Location			Location
Interest Rate Swaps - L/T*	$	42,000		$	-	Other Liabilities	$	(5,262)
Foreign Exchange Contracts		31,231	Other Current Assets		7	Current Liabilities	$	(115)
Total Derivatives designated as hedging instruments	$	73,231		$	7		$	($5,377)

*We have outstanding a variable-to-fixed interest rate swap with respect to a Yen-based facility for the financing of a PCTC delivered in March 2010.   The notional amount under this contract is $42.0 million (based on a Yen to USD exchange rate of 109.65 as of September 30, 2014).  With the bank exercising its option to reduce the underlying Yen loan from 80% to 65% funding of the vessel’s delivery cost, the 15% reduction represents the ineffective portion of this swap, which consists of the portion of the derivative instrument that is no longer supported by underlying borrowings.  The change in fair value related to the ineffective portion of this swap is reflected in our statement of income (loss) for the third quarter of 2014 as an $89,000 gain. The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap associated with our 25% investment in Oslo Bulk AS.

The effect of derivative instruments designated as cash flow hedges on our condensed consolidated statement of income (loss) for the nine months ended September 30, 2014 were as follows:

		Gain(Loss) Recognized in OCI*	Location of Gain(Loss) Reclassified from AOCL** to Income		Amount of Gain(Loss) Reclassified from AOCL to Income		Gain/(Loss) Recognized in Income from Ineffective portion
(All Amounts in Thousands)		2014			2014		2014
Interest Rate Swaps	$	446	Interest Expense	$	1,048	$	57
Foreign Exchange Contracts		(24)	Other Revenues		116		-
Total	$	422		$	1,164	$	57
*  Other Comprehensive (Loss) Income
**Accumulated Other Comprehensive Loss

Interest Rate Swap Agreements

From time to time, we enter into interest rate swap agreements to manage well-defined interest rate risks. We record the fair value of the interest rate swap as an asset or liability on the balance sheet. Currently, our interest rate swap is accounted for as an effective cash flow hedge with the exception of a small portion of one contract.  Accordingly, the effective portion of the change in fair value of the swap is recorded in Other Comprehensive Income (Loss).

As of September 30, 2014, we had the following interest rate swap contract outstanding:

(All Amounts in Thousands)
Effective	Termination		Current
Date	Date		Notional Amount*	Swap Rate		Type
3/15/2009	9/15/2020	$	42,000	2.065	%	Variable-to-Fixed

*Notional amount converted from Yen at September 30, 2014 at a Yen to USD exchange rate of 109.65.

Foreign Currency Contracts 

From time to time, we enter into foreign exchange contracts to hedge certain firm foreign currency purchase commitments.  During 2013, we entered into two forward purchase contracts for Mexican Pesos, which expire in December 2014.  The first was for Mexican Pesos of$1.2 million U.S. Dollar equivalents at an exchange rate of 13.6103 and the second was for Mexican Pesos of$600,000 U.S. Dollar equivalents at an exchange rate of 13.3003.  In September 2014, we entered into a new forward purchase contract for Mexican Pesos, which expire in December 2015, for $900,000 U.S. Dollar equivalents at an exchange rate of 13.6007.  Our Mexican Peso foreign exchange contracts cover 25% of our projected Peso exposure. 

In December 2013, we entered into three forward foreign exchange contracts totaling approximately 3.3 billion Yen in order to limit our exposure to currency fluctuations and to provide us with the option to fully payoff our current Yen Facility at an approximate exchange rate of 102.53 to $1.00.  One of these contracts was exercised in March 2014 and one was exercised in June 2014.  The remaining July contract for 3.1 billion Yen was rolled forward under four contracts, one which expired in September 2014, two which coincide to the next two scheduled quarterly loan installments on December 2014 and March 2015 of approximately 85 million Yen each, and the remaining 2.885 billion Yen mature in April 2015.  These remaining contracts allow us to limit our exposure to currency fluctuations. These remaining contracts and related agreements with the current lender give us the option to convert the Yen Facility into a USD-based Facility with the current lender at this fixed exchange rate, but otherwise on the same terms and with the same collateral.  As of the date of this report, we have not yet decided if or when to exercise this loan conversion option.  These particular forward foreign exchange contracts do not qualify for hedge accounting treatment and are thus accounted for as economic hedges.

The following table summarizes the current notional values as of September 30, 2014, of these contracts: 

(All Amounts in Thousands)
Transaction Date	Type of Currency		Amount Available in Dollars	Effective Date	Expiration Date
Aug-13	Peso	$	300	Jan-14	Dec-14
Nov-13	Peso		150	Jan-14	Dec-14
May-14	Yen		831	May-14	Dec-14
May-14	Yen		831	May-14	Mar-15
May-14	Yen		28,219	Jan-15	Dec-15
Sep-14	Peso		900	Jan-15	Dec-15
		$	31,231

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Stock Based Compensation (Narrative) (Details) (USD $)	9 Months Ended				9 Months Ended			0 Months Ended		3 Months Ended		9 Months Ended			0 Months Ended		9 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		0 Months Ended	9 Months Ended	0 Months Ended			0 Months Ended	9 Months Ended		0 Months Ended	9 Months Ended
	Sep. 30, 2014 item employee	Jan. 28, 2014	Apr. 23, 2013	May 07, 2012	Sep. 30, 2014 Top Executives [Member]	Sep. 30, 2014 Unrestricted Stock [Member]	Sep. 30, 2013 Unrestricted Stock [Member]	Jan. 14, 2014 Unrestricted Stock [Member] Independent Director [Member]	Jan. 15, 2013 Unrestricted Stock [Member] Independent Director [Member]	Sep. 30, 2014 Restricted Stock Units (RSUs) [Member]	Sep. 30, 2013 Restricted Stock Units (RSUs) [Member]	Sep. 30, 2014 Restricted Stock Units (RSUs) [Member]	Sep. 30, 2013 Restricted Stock Units (RSUs) [Member]	Sep. 30, 2014 Time Based Restricted Stock Units [Member]	Jan. 28, 2014 Time Based Restricted Stock Units [Member] 2014 Grants [Member]	Sep. 30, 2014 Performance Based Restricted Stock Units [Member]	Sep. 30, 2014 Absolute Performance Based Restricted Stock Units [Member] employee	May 31, 2014 Absolute Performance Based Restricted Stock Units [Member] 2012 Grants [Member]	Sep. 30, 2014 Absolute Performance Based Restricted Stock Units [Member] 2012 Grants [Member] employee	Dec. 31, 2013 Absolute Performance Based Restricted Stock Units [Member] 2012 Grants [Member]	May 31, 2015 Absolute Performance Based Restricted Stock Units [Member] 2012 Grants [Member] Scenario, Forecast [Member]	May 07, 2014 Absolute Performance Based Restricted Stock Units [Member] 2013 Grants [Member]	Sep. 30, 2014 Absolute Performance Based Restricted Stock Units [Member] 2013 Grants [Member] employee	May 07, 2014 Absolute Performance Based Restricted Stock Units [Member] 2013 Grants [Member] Scenario, Forecast [Member]	May 31, 2016 Absolute Performance Based Restricted Stock Units [Member] 2013 Grants [Member] Scenario, Forecast [Member]	May 31, 2015 Absolute Performance Based Restricted Stock Units [Member] 2013 Grants [Member] Scenario, Forecast [Member]	Jan. 28, 2014 Absolute Performance Based Restricted Stock Units [Member] 2014 Grants [Member]	Sep. 30, 2014 Absolute Performance Based Restricted Stock Units [Member] Top Executives [Member] 2013 Grants [Member]	Sep. 30, 2014 Relative Performance Based Restricted Stock Units [Member] employee	Jan. 28, 2014 Relative Performance Based Restricted Stock Units [Member] 2014 Grants [Member]	Sep. 30, 2014 Relative Performance Based Restricted Stock Units [Member] Top Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted to independent directors (in shares)								4,470	6,708
Stock-based compensation expense included in net income						$ 90,000	$ 90,000			$ 322,000	$ 272,000	$ 1,100,000	$ 933,000
Vesting period	3 years				1 year									3 years			3 years		3 years				3 years					1 year			1 year
Maximum shares allocated to each share based compensation unit (in shares)																1.5
Number of types of Performance-Based RSUs	2
Number of top executives	4																4		4				4						4
Number of shares vested and paid out																		1,500		21,564				8,450
Number of remaining shares expected to vest (in shares)																					1,500				3,525	3,525
Percentage of restricted stock units vested (in hundredths)																				53.00%		150.00%
Number of shares paid out																				21,564		20,064
Awards Granted (in shares)						4,470						42,650			7,950		15,138										17,351			17,349
Closing market stock price		$ 25.95	$ 17.66	$ 19.35

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Stock Based Compensation (Schedule Of Assumptions Used) (Details) (USD $)				9 Months Ended	12 Months Ended		9 Months Ended	12 Months Ended
	Jan. 28, 2014	Apr. 23, 2013	May 07, 2012	Sep. 30, 2014 1 Year Vest [Member] item	Dec. 31, 2013 1 Year Vest [Member] item	Dec. 31, 2012 1 Year Vest [Member] item	Sep. 30, 2014 3 Year Vest [Member] item	Dec. 31, 2013 3 Year Vest [Member] item	Dec. 31, 2012 3 Year Vest [Member] item
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Price	$ 25.95	$ 17.66	$ 19.35	$ 25.95	$ 17.66	$ 19.35	$ 25.95	$ 17.66	$ 19.35
Expected Volatilities				44.30%	33.50%	44.31%	40.02%	37.03%	40.50%
Correlation Coefficients				0.3740	0.4730	0.719	0.5540	0.6250	0.6940
Risk Free Rate				0.10%	0.10%	0.16%	0.72%	0.31%	0.34%
Dividend Yield				3.85%	5.70%	5.17%	3.85%	5.70%	5.17%
Simulated Fair Value				$ 23.03	$ 15.33	$ 17.73	$ 25.46	$ 16.57	$ 18.88
Fair Value as a % of Grant				88.74%	86.81%	91.63%	98.10%	93.83%	97.57%

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Other Long Term Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Long Term Liabilities [Abstract]
Deferred Gains, net of Amortization	$ 18,853	$ 34,009
Pension and Post Retirement	9,851	10,339
Alabama Lease Incentive	6,026	6,887
Insurance Reserves	4,591	5,521
Derivatives	5,262	4,412
Other	2,463	4,138
Other Long Term Liabilities	$ 47,046	$ 65,306

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments [Abstract]

Notional And Fair Value Of Derivative Instruments

			Asset Derivatives			Liability Derivatives
			2014			2014
		Current Notional	Balance Sheet		Fair Value	Balance Sheet		Fair Value
(All Amounts in Thousands)		Amount	Location			Location
Interest Rate Swaps - L/T*	$	42,000		$	-	Other Liabilities	$	(5,262)
Foreign Exchange Contracts		31,231	Other Current Assets		7	Current Liabilities	$	(115)
Total Derivatives designated as hedging instruments	$	73,231		$	7		$	($5,377)

*We have outstanding a variable-to-fixed interest rate swap with respect to a Yen-based facility for the financing of a PCTC delivered in March 2010.   The notional amount under this contract is $42.0 million (based on a Yen to USD exchange rate of 109.65 as of September 30, 2014).  With the bank exercising its option to reduce the underlying Yen loan from 80% to 65% funding of the vessel’s delivery cost, the 15% reduction represents the ineffective portion of this swap, which consists of the portion of the derivative instrument that is no longer supported by underlying borrowings.  The change in fair value related to the ineffective portion of this swap is reflected in our statement of income (loss) for the third quarter of 2014 as an $89,000 gain. The fair value balance as of September 30, 2014, includes a negative $461,000 balance related to an interest rate swap associated with our 25% investment in Oslo Bulk AS.

Derivative Instruments, Effect On Other Comprehensive Income (Loss)

		Gain(Loss) Recognized in OCI*	Location of Gain(Loss) Reclassified from AOCL** to Income		Amount of Gain(Loss) Reclassified from AOCL to Income		Gain/(Loss) Recognized in Income from Ineffective portion
(All Amounts in Thousands)		2014			2014		2014
Interest Rate Swaps	$	446	Interest Expense	$	1,048	$	57
Foreign Exchange Contracts		(24)	Other Revenues		116		-
Total	$	422		$	1,164	$	57
*  Other Comprehensive (Loss) Income
**Accumulated Other Comprehensive Loss

Interest Rate Derivatives

(All Amounts in Thousands)
Effective	Termination		Current
Date	Date		Notional Amount*	Swap Rate		Type
3/15/2009	9/15/2020	$	42,000	2.065	%	Variable-to-Fixed

*Notional amount converted from Yen at September 30, 2014 at a Yen to USD exchange rate of 109.65.

Notional Amount Of Foreign Exchange Contracts

(All Amounts in Thousands)
Transaction Date	Type of Currency		Amount Available in Dollars	Effective Date	Expiration Date
Aug-13	Peso	$	300	Jan-14	Dec-14
Nov-13	Peso		150	Jan-14	Dec-14
May-14	Yen		831	May-14	Dec-14
May-14	Yen		831	May-14	Mar-15
May-14	Yen		28,219	Jan-15	Dec-15
Sep-14	Peso		900	Jan-15	Dec-15
		$	31,231

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Goodwill, Other Intangible Assets, And Deferred Charges (Schedule Of Goodwill, Other Intangible Assets, And Deferred Charges) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Goodwill And Other Intangible Assets [Line Items]
Goodwill, Beginning Balance	$ 2,735		$ 2,735
Goodwill, Ending Balance	2,735		2,735
Total Indefinite Life Intangibles, Beginning Balance	2,735		2,735
Total Indefinite Life Intangibles, Ending Balance	2,735		2,735
Definite Life Intangibles, Beginning Balance	26,698		28,756
Definite Life Intangibles, Amortization	(1,029)	(1,521)	(3,087)	(4,669)
Definite Life Intangibles, Ending Balance	25,669		25,669
Drydocking Costs, Beginning Balance	22,284		26,428
Drydocking Costs, Additions	2,940		7,038
Drydocking Costs, Amortization	(5,154)		(13,745)
Drydocking Costs, Non-Cash Additions	2,520		2,869
Drydocking Costs, Ending Balance	22,590		22,590
Financing Charges and Other, Beginning Balance	2,991		2,881
Financing Charges and Other, Additions	619		1,034
Financing Charges and Other, Amortization	(563)		(868)
Financing Charges and Other, Non-Cash Additions	347		347
Financing Charges and Other, Ending Balance	3,394		3,394
Total Deferred Charges, Beginning Balance	25,275		29,309
Total Deferred Charges, Additions	3,559		8,072
Total Deferred Charges, Amortization	(5,717)		(14,613)
Total Deferred Charges, Non-Cash Additions	2,867		3,216
Total Deferred Charges, Ending Balance	25,984		25,984
Trade Names [Member] | Frascati Shops, Inc. And Tower, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	240 months		240 months
Definite Life Intangibles, Beginning Balance	58		60
Definite Life Intangibles, Amortization			(2)
Definite Life Intangibles, Ending Balance	58		58
Trade Names [Member] | United Ocean Services, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	96 months		96 months
Definite Life Intangibles, Beginning Balance	1,449		1,561
Definite Life Intangibles, Amortization	(57)		(169)
Definite Life Intangibles, Ending Balance	1,392		1,392
Customer Relationships [Member] | Frascati Shops, Inc. And Tower, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	240 months		240 months
Definite Life Intangibles, Beginning Balance	386		396
Definite Life Intangibles, Amortization	(6)		(16)
Definite Life Intangibles, Ending Balance	380		380
Customer Relationships [Member] | United Ocean Services, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	96 months		96 months
Definite Life Intangibles, Beginning Balance	24,805		26,739
Definite Life Intangibles, Amortization	(966)		(2,900)
Definite Life Intangibles, Ending Balance	$ 23,839		$ 23,839

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Preferred Stock

9 Months Ended

Sep. 30, 2014

Preferred Stock [Abstract]

Preferred Stock

Note 15. Preferred Stock

Series A Issuance

On February 21, 2013, we sold 250,000 shares of our 9.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $1.00 par value per share, with a liquidation preference of $100.00 per share. 

Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the Series A Preferred Stock are payable at a rate of 9.50% per annum per $100.00 liquidation preference per share, starting from the date of original issue, February 21, 2013.  Dividends accumulate quarterly in arrears on each January 30, April 30, July 30 and October 30.  However, the dividends are payable only if declared by our Board of Directors and must come from funds legally available for dividend payments.  On January 7, 2014, the Board of Directors declared a dividend of $2.375 per share on our Series A Preferred Stock for the preferred stockholders of record as of January 29, 2014, which was paid on January 30, 2014.  On April 9, 2014, the Board of Directors declared a dividend of $2.375 per share on our Series A Preferred Stock for the preferred stockholders of record as of April 29, 2014, which was paid on April 30, 2014.  On July 7, 2014, the Board of Directors declared a dividend of $2.375per share on our 9.5% Series A Cumulative Perpetual Preferred Stock to preferred stockholders of record on July 29, 2014, which was paid on July 30, 2014.  On October 6, 2014, the Board of Directors declared a dividend of $2.375per share on our 9.5% Series A Cumulative Perpetual Preferred Stock to preferred stockholders of record on October 29, 2014,payable on October 30, 2014.As of September 30, 2014, we had no accumulated unpaid dividends for our Series A preferred stock.

Commencing on April 30, 2018, we may redeem, at our option, the Series A Preferred Shares, in whole or in part, at a cash redemption price of $100.00 per share, plus any accrued and unpaid dividends to, but not including, the redemption date.  If at any time a “Change of Control” occurs, we will have the option to redeem the Series A Preferred Shares, in whole, within 120 days after the date of the Change of Control at the same cash redemption price.  The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or other mandatory redemption, and are not convertible into or exchangeable for any of our other securities.

Holders of the Series A Preferred Shares generally have no voting rights except for limited voting rights if dividends payable on the outstanding Series A Preferred Shares are in arrears for nine or more consecutive or non-consecutive quarters, and under certain other limited circumstances.

Net proceeds from the issuance of the Series A Preferred Shares were approximately $23.4 million, net of underwriter discounts and related costs totaling approximately $1.6 million.

Series B Issuance

On August 1, 2013, we sold 316,250 shares of our 9.00% Series B Cumulative Redeemable Perpetual Preferred Stock, $1.00 par value per share, with a liquidation preference of $100.00 per share, including 41,250 shares sold pursuant to an over-allotment option granted to the underwriters for the offering.

Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the Series B Preferred Stock are payable at a rate of 9.00% per annum per $100.00 liquidation preference per share, starting from the date of original issue, August 1, 2013. Dividends accumulate quarterly in arrears on each January 30, April 30, July 30 and October 30. However, the dividends are payable only if declared by our Board of Directors and must come from funds legally available for dividend payments.  On January 7, 2014, the Board of Directors declared a dividend of $2.25 per share on our Series B Preferred Stock for the preferred stockholders of record as of January 29, 2014, which was paid on January 30, 2014.  On April 9, 2014, the Board of Directors declared a dividend of $2.25 per share on our Series B Preferred Stock for the preferred stockholders of record as of April 29, 2014, which was paid on April 30, 2014.   On July 7, 2014, the Board of Directors declared a dividend of $2.25 per share 9.0% Series B Cumulative Perpetual Preferred Stock to preferred stockholders of record on July 29, 2014, which was paid on July 30, 2014.  On October 6, 2014, the Board of Directors declared a dividend of $2.25 per share 9.0% Series B Cumulative Perpetual Preferred Stock to preferred stockholders of record on October 29, 2014,payable on October 30, 2014.As of September 30, 2014, we had no accumulated unpaid dividends for our Series B preferred stock.

Commencing on October 30, 2018, we may redeem, at our option, the Series B Preferred Shares, in whole or in part, at a cash redemption price of $100.00 per share, plus any accrued and unpaid dividends to, but not including, the redemption date.  If at any time a “Change of Control” occurs, we will have the option to redeem the Series B Preferred Shares, in whole, within 120 days after the date of the Change of Control at the same cash redemption price.  The Series B Preferred Shares have no stated maturity, are not subject to any sinking fund or other mandatory redemption, and are not convertible into or exchangeable for any of our other securities.

Holders of the Series B Preferred Shares generally have no voting rights except for limited voting rights if dividends payable on the outstanding Series B Preferred Shares are in arrears for nine or more consecutive or non-consecutive quarters, and under certain other limited circumstances.

Net proceeds from the issuance of the Series B Preferred Shares were approximately $30.0 million, net of underwriter discounts and related costs totaling approximately $1.6 million.

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Prior Period Revision

9 Months Ended

Sep. 30, 2014

Prior Period Revision [Abstract]

Prior Period Revision

Note 20.  Prior Period Revision

In the first quarter of 2014, we elected to revise our prior year financial statements in accordance with Accounting Bulletin No. 108 (SAB 108) for three previously uncorrected misstatements which impacted the fourth quarter of 2013. The corrections are immaterial to our financial statements for the period ended December 31, 2013. Accordingly, we corrected the balance sheet impact of these errors by revising our previously issued financial statements in our first quarter 10-Q filing. The first revision related to the cutoff of voyage revenues which resulted in a decrease in revenue and a decrease in voyage expenses for a net adjustment to pre-tax income of $70,000. The second correction related to the classification of the short-term and long-term portions of a related party note receivable. This revision decreased our short term note receivable and increased our long term note receivable by $275,000. The third revision related to an increase in our long-term deferred tax assets and a decrease to our deferred income tax expense by $305,000. The total effect of the revisions on retained earnings was an increase of $375,000 for the year ended December 31, 2013. The income statement effect of these entries will be revised in our financial statements for the twelve month period ended December 31, 2013 when the 2013 income statement or related data derived therefrom is included in one of our subsequent filings under the federal security laws.  The financial statement line items impacted by these revisions by more than 1% are presented in the table below in thousands:

			2013
Financial Statement Line Item	Dollar Impact		As Previously Reported		% Impact		2013 As Revised
Provision (Benefit) for Income Taxes	$	(305)	$	(11,963)	2.54	%	$	(12,268)
Net Income	$	375	$	18,157	2.07	%	$	18,532
Comprehensive Income	$	375	$	29,163	1.2	%	$	29,538

The impact of these revisions on Revenue, Voyage Expense, Total Operating Expenses, Operating Income, Income Before Provision (Benefit) for Income Taxes and Equity in Net Loss of Unconsolidated Entities, Retained Earnings, Stockholders’ Equity, Current Assets, Non-Current Assets, Current Liabilities, and Non-Current Liabilities was less than 1% of each line item, respectively.

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Investment In Unconsolidated Entities (Summarized Equity In Net Loss Of Unconsolidated Entities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	$ (176)	$ (360)	$ (364)	$ (705)
Oslo Bulk, AS [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	(55)	(193)	(142)	(290)
Oslo Bulk Holding Pte, Ltd (formerly Tony Bulkers) [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	(318)	(122)	(400)	(363)
Terminales Transgolfo, S.A. DE C.V. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	(81)	(45)	(148)	(52)
Brattholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	30		30
Saltholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Loss of Unconsolidated Entities	$ 248		$ 296

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Measurements [Abstract]

Summary Of Financial Assets And Financial Liabilities Measured At Fair Value On A Recurring And Non-Recurring Basis

(All Amounts in Thousands)		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Assets	$	-	$	7	$	-	$	7
Derivative Liabilities	$	-	$	(5,377)	$	-	$	(5,377)

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Stockholders' Equity:
Common Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common Stock, shares authorized (in shares)	20,000,000	20,000,000
Common Stock, shares issued (in shares)	7,301,657	7,203,935
Common Stock, shares outstanding (in shares)	7,301,657	7,203,935
Treasury Stock, (in shares)	1,388,078	1,388,066
9.50% Series A Preferred Stock [Member]
Stockholders' Equity:
Cumulative Perpetual Preferred Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Cumulative Perpetual Preferred Stock, coupon rate (in hundredths)	9.50%	9.50%
Cumulative Perpetual Preferred Stock, shares authorized (in shares)	650,000	650,000
Cumulative Perpetual Preferred Stock, shares issued (in shares)	250,000	250,000
Cumulative Perpetual Preferred Stock, shares outstanding (in shares)	250,000	250,000
9.00% Series B Preferred Stock [Member]
Stockholders' Equity:
Cumulative Perpetual Preferred Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Cumulative Perpetual Preferred Stock, coupon rate (in hundredths)	9.00%	9.00%
Cumulative Perpetual Preferred Stock, shares authorized (in shares)	350,000	350,000
Cumulative Perpetual Preferred Stock, shares issued (in shares)	316,250	316,250
Cumulative Perpetual Preferred Stock, shares outstanding (in shares)	316,250	316,250

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Inventory

9 Months Ended

Sep. 30, 2014

Inventory [Abstract]

Inventory

Note  4.  Inventory

Spare parts and warehouse inventories are stated at the lower of cost or market based on the first-in, first-out method of accounting. Our fuel inventory is based on the average inventory method of accounting. Our inventory consists of three major classes, the break out of which is included in the following table:

(All Amounts in Thousands)		September 30,		December 31,
Inventory Classes		2014		2013
Spare Parts Inventory	$	4,195	$	3,968
Fuel Inventory		4,547		4,663
Warehouse Inventory		2,501		2,691
	$	11,243	$	11,322

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Derivative Instruments (Derivative Instruments, Effect On Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	$ 422	[1]
Amount of Gain (Loss) Reclassified from AOCI to Income	1,164
Gain/(Loss) Recognized in Income from Ineffective portion	57
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	446	[1]
Gain/(Loss) Recognized in Income from Ineffective portion	57
Interest Rate Swaps [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Reclassified from AOCI to Income	1,048
Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	(24)	[1]
Foreign Exchange Contracts [Member] | Other Revenues [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Reclassified from AOCI to Income	$ 116

[1] Other Comprehensive (Loss) Income

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Stockholders' Equity (Summary Of Changes In Stockholders' Equity) (Details) (USD $)	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014		Sep. 30, 2013	Dec. 31, 2013
Stockholders' Equity [Line Items]
Balance			$ 336,540,000
Net Loss	(2,565,000)	(2,222,000)	(6,446,000)		1,290,000	18,532,000
Common Stock Dividends			(5,569,000)	[1]
Unrealized Foreign Currency Translation Gain	(84,000)	(307,000)	(67,000)		(61,000)
Net Change in Fair Value of Derivatives	457,000	780,000	422,000		2,289,000
Net Change in Funding Status of Defined Benefit Plan	74,000	306,000	225,000		927,000
Issuance of stock-based compensation			544,000
Balance	321,733,000		321,733,000			336,540,000
Accrued dividends not paid			105,000
Preferred Stock [Member]
Stockholders' Equity [Line Items]
Preferred Stock Dividends			$ (3,916,000)

[1] Includes $105,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

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Early Lease Buy Out

9 Months Ended

Sep. 30, 2014

Early Lease Buy Out [Abstract]

Early Lease Buy Out

Note 21.  Early Lease Buy Out

On February 22, 2012, we completed a sale and leaseback arrangement with Wells Fargo Bank NW of our 2007 PCTC vessel.    We leased the vessel back under a ten year lease agreement with early buyout options that could be exercised in 2017 and 2019.  The lease was classified as an operating lease, with the $14.9 million gain on this sale-leaseback deferred and recognized over the term of the lease.  OnAugust 26, 2014, we determined that it was preferential under current market conditions to buy back this vessel with the intent to reflag this vessel to International flagin anticipation of deploying the vessel at a higher operating margin later in 2014.  We reached an agreement with the lessor to repurchase the vessel for $55.6 million and recorded the remaining unamortized deferred gain of $11.2 million as a reduction in the cost basis of the purchased asset. 

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Changes In Accumulated Other Comprehensive Loss (Reclassifications Out Of Accumulated Other Comprehensive Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest Expense	$ (3,115)	$ (3,109)	$ (7,301)	$ (7,387)
Other revenues	456	522	1,417	1,616
(Loss) Income Before Benefit for Income Taxes and Equity in Net Income of Unconsolidated Entities	(1,248)	(1,844)	(5,170)	2,063
(Expense) Benefit for Income Taxes	(1,141)	(18)	(912)	(68)	12,268
Net (Loss) Income	(2,565)	(2,222)	(6,446)	1,290	18,532
Amount Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net (Loss) Income	(319)	(2,189)	(996)	(855)
Gains And Losses On Derivatives Fair Value [Member] | Amount Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
(Loss) Income Before Benefit for Income Taxes and Equity in Net Income of Unconsolidated Entities	(393)	(2,495)	(1,221)	(1,782)
Net (Loss) Income	(393)	(2,495)	(1,221)	(1,782)
Gains And Losses On Derivatives Fair Value [Member] | Interest Rate Contract [Member] | Amount Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest Expense	(426)	(2,444)	(1,105)	(1,796)
Gains And Losses On Derivatives Fair Value [Member] | Foreign Exchange Contracts [Member] | Amount Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other revenues	33	(51)	(116)	14
Defined Benefit Pension Items [Member] | Amount Reclassified From Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Prior service costs	24	25	73	75
Actuarial losses	76	281	227	852
(Loss) Income Before Benefit for Income Taxes and Equity in Net Income of Unconsolidated Entities	100	306	300	927
(Expense) Benefit for Income Taxes	(26)		(75)
Net (Loss) Income	$ 74	$ 306	$ 225	$ 927

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2014

Stockholders' Equity [Abstract]

Summary Of Changes In Stockholders' Equity

		Stockholders'
(All Amounts in Thousands)		Equity
Balance December 31, 2013	$	336,540
Net Loss		(6,446)
Common Stock Dividends*		(5,569)
Preferred Stock Dividends		(3,916)
Unrealized Foreign Currency Translation Gain		(67)
Net Change in Fair Value of Derivatives		422
Net Change in Funding Status of Defined Benefit Plan		225
Issuance of stock-based compensation		544
Balance September 30, 2014	$	321,733
*Includes $105,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Issuer Purchases Of Equity Securities

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plan	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plan
July 1, 2014 - July 31, 2014	-	-	-	285,377
August 1, 2014 - August 31, 2014	-	-	-	285,377
September 1, 2014 - September 30, 2014	-	-	-	285,377

Cash Dividends Paid

(All Amounts in Thousands Except per Share Data )					Total
			Per Share		Dividend
Record Date	Payment Date		Amount		Paid
17-Feb-14	3-Mar-14	$	0.250	$	1,813
16-May-14	3-Jun-14	$	0.250		1,826
15-Aug-14	4-Sep-14	$	0.250		1,825
				$	5,464

During the nine months ended September 30, 2014, we paid cash dividends in respect of our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data )						Total
				Per Share		Dividend
Record Date	Series	Payment Date		Amount		Paid
29-Jan-14	A	30-Jan-14	$	2.375	$	594
29-Jan-14	B	30-Jan-14	$	2.250		712
29-Apr-14	A	30-Apr-14	$	2.375		594
29-Apr-14	B	30-Apr-14	$	2.250		711
29-Jul-14	A	30-Jul-14	$	2.375		594
29-Jul-14	B	30-Jul-14	$	2.250		711
					$	3,916

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Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 14.  Stockholders’ Equity

A summary of the changes in Stockholders’ equity for the nine months ended September 30, 2014, is as follows:

		Stockholders'
(All Amounts in Thousands)		Equity
Balance December 31, 2013	$	336,540
Net Loss		(6,446)
Common Stock Dividends*		(5,569)
Preferred Stock Dividends		(3,916)
Unrealized Foreign Currency Translation Gain		(67)
Net Change in Fair Value of Derivatives		422
Net Change in Funding Status of Defined Benefit Plan		225
Issuance of stock-based compensation		544
Balance September 30, 2014	$	321,733
*Includes $105,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Stock Repurchase Program

On January 25, 2008, ourBoard of Directors approved a share repurchase program for up to a total of 1,000,000 shares of our common stock. We expect that any share repurchases under this program will be made from time to time for cash in open market transactions at prevailing market prices. The timing and amount of any purchases under the program will be determined by management based upon market conditions and other factors. In 2008, we repurchased 491,572 shares of our common stock for $11.5 million.Thereafter, we suspended repurchases until the second quarter of 2010, when we repurchased 223,051 shares of our common stock for $5.2 million.Unless and until ourBoard of Directors otherwise provides, this authorization will remain open indefinitely, or until we reach the approved 1,000,000 share limit.

This table provides certain information with respect to our purchase of shares of its common stock during the three months ended September 30, 2014:

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plan	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plan
July 1, 2014 - July 31, 2014	-	-	-	285,377
August 1, 2014 - August 31, 2014	-	-	-	285,377
September 1, 2014 - September 30, 2014	-	-	-	285,377

Dividend Payments

During the nine months ended September 30, 2014, we paid cash dividends in respect to our common stock as follows:

(All Amounts in Thousands Except per Share Data )					Total
			Per Share		Dividend
Record Date	Payment Date		Amount		Paid
17-Feb-14	3-Mar-14	$	0.250	$	1,813
16-May-14	3-Jun-14	$	0.250		1,826
15-Aug-14	4-Sep-14	$	0.250		1,825
				$	5,464

During the nine months ended September 30, 2014, we paid cash dividends in respect of our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data )						Total
				Per Share		Dividend
Record Date	Series	Payment Date		Amount		Paid
29-Jan-14	A	30-Jan-14	$	2.375	$	594
29-Jan-14	B	30-Jan-14	$	2.250		712
29-Apr-14	A	30-Apr-14	$	2.375		594
29-Apr-14	B	30-Apr-14	$	2.250		711
29-Jul-14	A	30-Jul-14	$	2.375		594
29-Jul-14	B	30-Jul-14	$	2.250		711
					$	3,916