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 March 31, 2015
[  ]  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. . . . . . . . 7,309,757 shares outstanding as of May 1, 2015

1

INTERNATIONAL SHIPHOLDING CORPORATION

Quarterly Report on Form 10-Q for the

Three Months Ended March 31, 2015

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM1 –FINANCIALSTATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE 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	21
ITEM 3 – QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK	38
ITEM 4 – CONTROLS AND PROCEDURES	38
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS ITEM 1A - RISK FACTORS	39 39
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	39
ITEM 6 – EXHIBITS	39

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 Condensed 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., which we acquired in August 2012, the term “UOS” refers to United Ocean Services, LLC, which we acquired in November 2012, and the term “SEC” means the U.S. Securities and Exchange Commission.

2

PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All Amounts in Thousands Except Share Data)

(Unaudited)

	Three Months Ended March 31,
	2015		2014
Revenues	$	68,026	$	72,694
Operating Expenses
Voyage Expenses		52,211		57,433
Amortization Expense		5,187		5,163
Vessel Depreciation		5,543		6,721
Other Depreciation		184		184
Administrative and General Expenses		5,022		5,449
Loss on Sale of Other Assets		68		-
Total Operating Expenses		68,215		74,950
Operating Loss		(189)		(2,256)
Interest and Other
Interest Expense		2,668		2,145
Derivative Loss		2,810		14
Loss on Extinguishment of Debt		95		-
Other Income from Vessel Financing		(445)		(489)
Investment Income		(7)		(19)
Foreign Exchange Loss		45		84
		5,166		1,735
Loss Before Provision (Benefit) for Income Taxes and Equity in Net Income (Loss) of Unconsolidated Entities		(5,355)		(3,991)
Provision (Benefit) for Income Taxes		39		(882)
Equity in Net Income (Loss) of Unconsolidated Entities (Net of Applicable Taxes)		893		(108)
Net Loss	$	(4,501)	$	(3,217)
Preferred Stock Dividends		1,305		1,305
Net Loss Attributable to Common Stockholders	$	(5,806)	$	(4,522)
Loss Per Common Share:
Basic	$	(0.79)	$	(0.62)
Diluted	$	(0.79)	$	(0.62)
Weighted Average Shares of Common Stock Outstanding:
Basic		7,308,482		7,252,075
Diluted		7,308,482		7,252,075
Common Stock Dividends Per Share	$	0.25	$	0.25

The accompanying notes are an integral part of these statements.

3

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(All Amounts in Thousands)

(Unaudited)

	Three Months Ended March 31,
	2015		2014
Net Loss	$	(4,501)	$	(3,217)
Other Comprehensive (Loss)/Income:
Unrealized Foreign Currency Translation Loss		(61)		(25)
Change in Fair Value of Derivatives		240		9
De-Designation of Interest Rate Swap		2,859		-
Change in Funded Status of Defined Benefit Plan		304		175
Comprehensive Loss	$	(1,159)	$	(3,058)

The accompanying notes are an integral part of these statements.

4

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(All Amounts in Thousands Except Share Data)

(Unaudited)

	March 31, 2015		December 31, 2014
ASSETS
Cash and Cash Equivalents	$	21,783	$	21,133
Restricted Cash		391		1,394
Accounts Receivable, Net of Allowance for Doubtful Accounts		28,653		31,322
Prepaid Expenses		8,639		10,927
Deferred Tax Asset		235		408
Other Current Assets		328		370
Notes Receivable		1,628		3,204
Material and Supplies Inventory		8,134		9,760
Assets Held for Sale		6,778		6,976
Total Current Assets		76,569		85,494
Investment in Unconsolidated Entities		22,697		21,837
Vessels, Property, and Other Equipment, at Cost:
Vessels		519,953		520,026
Building		1,780		1,354
Land		623		623
Leasehold Improvements		26,348		26,348
Construction in Progress		4,495		2,371
Furniture and Equipment		10,574		10,461
		563,773		561,183
Less -  Accumulated Depreciation		(192,618)		(186,450)
		371,155		374,733
Other Assets:
Deferred Charges, Net of Accumulated Amortization		28,960		28,657
Intangible Assets, Net of Accumulated Amortization		24,416		25,042
Due from Related Parties		1,567		1,660
Notes Receivable		25,361		24,455
Goodwill		2,735		2,735
Assets Held for Sale		32,486		48,701
Other		4,614		4,843
		120,139		136,093
TOTAL ASSETS	$	590,560	$	618,157

The accompanying notes are an integral part of these statements.

5

INTERNATIONAL SHIPHOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(All Amounts in Thousands Except Share Data)

	March 31, 2015		December 31, 2014
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Maturities of Long-Term Debt	$	22,412	$	23,367
Accounts Payable and Other Accrued Expenses		47,805		52,731
Total Current Liabilities		70,217		76,098
Long-Term Debt, Less Current Maturities		203,631		219,521
Other Long-Term Liabilities:
Incentive Obligation		4,456		4,644
Other		48,970		50,284
TOTAL LIABILITIES		327,274		350,547
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 March 31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014, Respectively		316		316
Common Stock, $1.00 Par Value, 20,000,000 Shares Authorized, 7,309,757 and 7,301,657 Shares Outstanding at March 31, 2015 and December 31, 2014, Respectively		8,753		8,743
Additional Paid-In Capital		140,952		140,960
Retained Earnings		151,466		159,134
Treasury Stock 1,388,078  Shares at March 31, 2015 and  December 31, 2014		(25,403)		(25,403)
Accumulated Other Comprehensive Loss		(13,048)		(16,390)
TOTAL STOCKHOLDERS' EQUITY		263,286		267,610
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	590,560	$	618,157

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 Share Data)

(Unaudited)

	Three Months Ended March 31,
		2015		2014
Cash Flows from Operating Activities:
Net Loss	$	(4,501)	$	(3,217)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
Depreciation		5,727		6,905
Amortization of Deferred Charges		4,840		4,286
Amortization of Intangible Assets		626		1,029
Deferred Tax		-		(905)
Non-Cash Share Based Compensation		2		447
Equity in Net (Income) Loss of Unconsolidated Entities		(893)		108
Loss on Sale of Assets		68		-
Loss on Extinguishment of Debt		95		-
Loss on Foreign Currency Exchange		45		84
Loss on Derivatives		2,810		14
Other Reconciling Items, net		(838)		(1,387)
Changes in operating assets and liabilities, net of acquisitions:
Deferred Drydocking Charges		(5,515)		(1,775)
Accounts Receivable		(878)		3,620
Inventory and Other Current Assets		3,906		2,006
Other Assets		-		(500)
Accounts Payable and Accrued Liabilities		(3,839)		(2,020)
Other Long-Term Liabilities		250		(1,197)
Net Cash Provided by Operating Activities		1,905		7,498
Cash Flows from Investing Activities:
Purchases of and Capital Improvements to Property and Equipment		(3,250)		(5,884)
Investment in Unconsolidated Entities		-		(5,814)
Net Change in Restricted Cash Account		1,003		2,499
Cash Proceeds from the State of Louisiana		122		-
Cash Proceeds from Sale of Assets		16,355		-
Cash Proceeds from Receivable Settlement		3,890		-
Proceeds from Payments on Note Receivables		670		1,062
Net Cash Provided by (Used In) Investing Activities		18,790		(8,137)
Cash Flows from Financing Activities:
Proceeds from Line of Credit		5,000		8,000
Payments on Line of Credit		(2,500)		(8,000)
Principal Payments on Long Term Debt		(19,384)		(4,755)
Additions to Deferred Financing Charges		(28)		(62)
Dividends Paid		(3,133)		(3,119)
Net Cash Used In Financing Activities		(20,045)		(7,936)
Net Increase (Decrease) in Cash and Cash Equivalents		650		(8,575)
Cash and Cash Equivalents at Beginning of Period		21,133		20,010
Cash and Cash Equivalents at End of Period	$	21,783	$	11,435
Supplemental disclosure of non-cash investing activities:
Additions to vessels, property, plant and equipment included in accounts payable and other accrued expenses	$	823	$	-

The accompanying notes are an integral part of these statements.

7

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2015

NOTE 1 - BASIS OF PRESENTATION

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 recommend 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, 2014.  The condensed consolidated balance sheet as of December 31, 2014 included in this report has been derived from the audited financial statements at that date.

The foregoing 2015 interim results are not necessarily indicative of the results of operations for the full year 2015.  Management believes that it has made all adjustments necessary, consisting only of normal recurring adjustments, for a fair statement of the information presented.

The accompanying financial statements include the accounts of International Shipholding Corporation and its majority owned subsidiaries.  Intercompany accounts and transactions have been eliminated in consolidation.  Our policy is to consolidate all subsidiaries 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 interest and have the ability to exercise significant influence over their 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.  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 previously reported amounts have been reclassified to conform to the 2015 presentation.  Specifically, drydock amortization, which was previously included in voyage expense, is now included in amortization expense, and miscellaneous depreciation expense, which was previously included in voyage expense and administrative and general expense, is now included in other depreciation expense in the Condensed Consolidated Statements of Operations and other tables herein (see Note 6 – Goodwill, Other Intangible Assets, and Deferred Charges).

NOTE 2 – 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) loss of extinguishment of debt, (vii) other income from vessel financing, (viii) investment income, and (ix) 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.

8

The following table presents information about segment profit and loss for the three months ended March 31, 2015 and 2014:

RESULTS OF OPERATIONS

three MONTHS ENDED MARCH 31, 2015

COMPARED TO THE three MONTHS ENDED MARCH 31, 2014

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	24,595		$	14,247		$	1,868		$	-		$	10,571		$	-	$	51,281
Variable Revenue		-			7,533			1,255			7,785			185			(13)		16,745
Total Revenue from External Customers		24,595			21,780			3,123			7,785			10,756			(13)		68,026
Voyage Expenses		18,590			17,020			2,580			6,886			7,557			(422)		52,211
Amortization Expense		3,828			715			61			285			298			-		5,187
Loss (Income) of Unconsolidated Entities		-			-			(635)			74			(332)			-		(893)
Gross Voyage Profit	$	2,177		$	4,045		$	1,117		$	540		$	3,233		$	409	$	11,521
Gross Voyage Profit Margin		9	%		19	%		36	%		7	%		30	%		-		17	%
2014
Fixed Revenue	$	29,100		$	15,615		$	1,526		$	-		$	8,702		$	-	$	54,943
Variable Revenue		-			3,941			3,590			7,926			2,248			46		17,751
Total Revenue from External Customers		29,100			19,556			5,116			7,926			10,950			46		72,694
Voyage Expenses		21,209			16,663			3,566			6,846			9,476			(327)		57,433
Amortization Expense		3,667			535			77			160			724			-		5,163
Loss of Unconsolidated Entities		-			-			80			28			-			-		108
Gross Voyage Profit	$	4,224		$	2,358		$	1,393		$	892		$	750		$	373	$	9,990
Gross Voyage Profit Margin		15	%		12	%		27	%		11	%		7	%		-		14	%

9

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

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Revenues	$	68,026	$	72,694
Voyage Expenses		52,211		57,433
Amortization Expense		5,187		5,163
Net (Income) Loss of Unconsolidated Entities		(893)		108
Gross Voyage Profit		11,521		9,990
Vessel Depreciation		5,543		6,721
Other Depreciation		184		184
Gross Profit		5,794		3,085
Other Operating Expenses:
Administrative and General Expenses		5,022		5,449
Loss on Sale of Other Assets		68		-
Less:  Net Income (Loss) of Unconsolidated Entities		893		(108)
Total Other Operating Expenses		5,983		5,341
Operating Loss	$	(189)	$	(2,256)

NOTE 3 – LOSS ON SALE OF ASSETS

During the first quarter of 2015, we sold a 36,000 dead weight ton Handysize vessel and its related equipment.  We received $16.4 million, net of commissions and other costs to sell, and recorded a loss on sale of asset of approximately $68,000 during the quarter.  This vessel was included in Assets Held for Sale at December 31, 2014.  Additionally, we paid off related debt of approximately $13.5 million and recorded a loss on extinguishment of debt of approximately $95,000.

NOTE 4 - INVENTORY

Our inventory consists of three major classes: spare parts, fuel, and warehouse 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 cost method of accounting.  We have broken down the inventory balances as of March 31, 2015 and December 31, 2014 by major class in the following table:

(All Amounts in Thousands)		March 31,		December 31,
Inventory Classes		2015		2014
Spare Parts Inventory	$	3,296	$	3,253
Fuel Inventory		2,320		3,967
Warehouse Inventory		2,518		2,540
Total	$	8,134	$	9,760

10

NOTE 5 – UNCONSOLIDATED ENTITIES

The following table summarizes our equity in net income (loss) of unconsolidated entities for the three months ended March  31, 2015 and 2014, respectively:

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Oslo Bulk, AS	$	515	$	(62)
Oslo Bulk Holding Pte. Ltd (formerly Tony Bulkers)		120		(18)
Terminales Transgolfo,  S.A. de C.V.		(74)		(28)
Saltholmen Shipping Ltd		251		-
Brattholmen Shipping Ltd		81		-
Total Equity in Net Income (Loss) of Unconsolidated Entities	$	893	$	(108)

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 operationsunder the caption: "Equity in Net Income (Loss) of Unconsolidated Entities (Net of Applicable Taxes).”

During 2014, we invested approximately $5.8 million cash and $2.1 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.

For additional information on our investment in these and other unconsolidated entities, see Note E – Unconsolidated Entities to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

NOTE 6 – GOODWILL, OTHER INTANGIBLE ASSETS, AND DEFERRED CHARGES

Amortization expense for intangible assets was approximately $0.6 million and $1.0 million for the three months ended March 31, 2015 and 2014, respectively.  Amortization expense for deferred charges was approximately $4.8 million and $4.3 million for the three months ended March 31, 2015 and 2014, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred chargesfor the three months endedMarch 31, 2015:

(All Amounts in Thousands)			Balance at										Balance at
	Amortization		December 31,		Cash						Non-Cash		March 31,
	Period		2014		Additions		Disposals		Amortization		Reclassifications		2015
Indefinite Life Intangibles
Goodwill		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	57	$	-	$	-	$	(1)	$	-	$	56
Trade names - UOS	144 months		1,357		-		-		(34)		-		1,323
Customer Relationships - FSI	240 months		375		-		-		(5)		-		370
Customer Relationships - UOS	144 months		23,253		-		-		(586)		-		22,667
Total Definite Life Intangibles		$	25,042	$	-	$	-	$	(626)	$	-	$	24,416
Deferred Charges
Drydocking Costs	various	$	25,238	$	5,515	$	-	$	(4,560)	$	(831)	$	25,362
Financing Charges and Other	various		3,419		28		(95)		(280)		526		3,598
Total Deferred Charges		$	28,657	$	5,543	$	(95)	$	(4,840)	$	(305)	$	28,960

11

NOTE 7 – ASSETS HELD FOR SALE

As a result of continued evaluation of our strategic alternatives, during the fourth quarter of 2014, we committed to a plan to sell three Handysize vessels and one Jones Act Tug-Barge unit that was inactive.  Upon approval of this plan, we classified the Handysize vessels and their related equipment as Long Term Assets Held for Sale, valued at approximately $48.7 million at December 31, 2014.  During the first quarter of 2015, we sold one of the Handysize vessels and its equipment and paid off related debt.  At March 31, 2015, the remaining two Handysize vessels held for sale were valued at approximately $32.5 million.  At such date, we owed approximately $27.0 million under debt incurred to purchase these two vessels, which we plan to pay off if and when we sell such vessels.  The Tug-Barge unit and inventory related to the Handysize vessels are classified as Short Term Assets Held for Sale, and were valued at approximately $6.8 million at March 31, 2015 and $7.0 million at December 31, 2014.  As a result of these classifications, there was no depreciation expense related to these assets during the first quarter of 2015.If weak dry bulk markets continue to put downward pressure on charter rates or we elect to market other vessels for sale, we might incur additional impairment charges in the future.

During 2014, the Company adopted ASU 2014-8 which changed the definition of discontinued operations.  In accordance with this guidance, we determined that the assets held for sale did not represent a strategic shift that would have a major effect on our operations and financial results.  As such, we did not report the financial results related to these assets as discontinued operations.

NOTE 8 – INCOME TAXES

We recorded a tax provision of $39,000 on our $5.4 million loss before taxes and equity in net income of unconsolidated entities for the three months ended March 31, 2015.  For the first three months of 2014 we recorded an income tax benefit of $882,000 on our $4.0 million of loss before equity in net income of unconsolidated entities. These provision amounts represent our qualifying U.S. flag operations, which continue to be taxed under the “tonnage tax” provisions rather than the normal U.S. corporate income tax provisions, state income taxes paid, and foreign income tax withholdings or refunds.  We established a valuation allowance against deferred income tax assets in 2014 because, based on available information, we could not conclude that it was more likely than not that the full amount of deferred income tax assets generated primarily by NOL carryforwards and AMT credits would be realized through the generation of taxable income in the near future. We have and will continue to evaluate the need for a valuation allowance on a quarterly basis.  We recorded an increase in our valuation allowance of $730,000 for the three months ending March 31, 2015.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2014, including Note J - Income Taxes to the consolidated financial statements included therein.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Commitments

Investment in newbuilding Handysize 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.  As a result of this bankruptcy, we collected $4.2 million on January 6, 2015, $3.9 million of which represented a return of our deposit and $0.3 million of which we recognized as interest income.

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 we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability.

For further information on our commitments and contingencies, see Note K – Commitment and Contingencies to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

12

NOTE 10 – 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 March 31, 2015 and 2014:

(All Amounts in Thousands)		Pension Plan				Postretirement Benefits
		Three Months Ended March 31,				Three Months Ended March 31,
Components of net periodic benefit cost:		2015		2014		2015		2014
Service cost	$	171	$	154	$	8	$	3
Interest cost		359		381		118		145
Expected return on plan assets		(638)		(655)		-		-
Amortization of prior service cost		(1)		(1)		26		25
Amortization of Net Loss		111		63		37		88
Net periodic benefit cost (benefit)	$	2	$	(58)	$	189	$	261

We contributed $150,000 to our pension plan for the three months ended March 31, 2015.  We expect to contribute an additional $450,000 before December 31, 2015.

NOTE 11 – 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 a liability of $7.1 million in the aggregate for all of our contracts as of March 31, 2015 (see table below).  As of March 31, 2015, we were expecting to refinance our Yen-based credit facility with a U.S. dollar facility.  Interest payable under the Yen-based loan was fixed after we entered into a variable-to-fixed interest rate swap in 2009.  Due to our determination at March 31, 2015 that it was more likely than not that the Yen-based loan would be refinanced, the interest rate swap became totally ineffective at March 31, 2015.  As a result, we recorded a $2.8 million charge to derivative loss on our condensed consolidated statement of operations with the offset to other comprehensive loss.  For more information on the refinancing of the Yen-based facility, see Note 20 – Subsequent Event.  The unrealized loss related to our derivative instruments included in accumulated other comprehensive loss, net of taxes, was $0.6 million and $3.7 million as of March 31, 2015 and December 31, 2014, respectively.

The notional and fair value amounts of our derivative instruments as of March 31, 2015 were as follows:

(All Amounts in Thousands)			Liability Derivatives
	Current Notional		Balance Sheet	Fair
	Amount		Location	Value
Interest Rate Swaps - L/T	$	36,594	Other Liabilities	$	(2,757)
Foreign Exchange Contracts		1,800	Current Liabilities		(182)
Foreign Exchange Contracts		28,219	Other Liabilities		(4,154)
Total Derivatives designated as hedging instruments	$	66,613		$	(7,093)

13

The effect of derivative instruments designated as cash flow hedges on our condensed consolidated statement of operations for the three months ended March 31, 2015 were as follows:

(All Amounts in Thousands)			Location of	Amount of		Gain (Loss)
	Gain (Loss)		Gain (Loss)	Gain (Loss)		Recognized in
	Recognized		Reclassified from	Reclassified from		Income from
	in OCI*		AOCI** to Income	AOCI to Income		Ineffective Portion
Interest Rate Swaps	$	243	Interest Expense	$	484	$	49
De-Designation of Interest Rate Swaps		2,859			-		(2,859)
Foreign Exchange Contracts		(3)	Other Revenues		99		-
Total	$	3,099		$	583	$	(2,810)

*Other Comprehensive (Loss) Income

**Accumulated Other Comprehensive Income

Foreign Currency Contracts 

From time to time, we enter into foreign exchange contracts to hedge certain firm foreign currency purchase commitments.  During 2014, we entered into three forward purchase contracts for Mexican Pesos, which expire in December 2015, two for $900,000 U.S. Dollar equivalents at an average exchange rate of 13.6007 and 13.7503, respectively, and another for $600,000 U.S. Dollar equivalents at an exchange rate of 14.1934.  Our Mexican Peso foreign exchange contracts cover approximately 85% of our projected Peso exposure. 

Over the past couple of years, we have entered into and extended several forward foreign exchange contracts in order to limit our exposure to fluctuations in the Yen and to provide us with the option to fully pay off our current Yen Facility at an approximate exchange rate of 102.25 to $1.00.  The contracts that remain in effect and related agreements with the lender provided us with the option to convert the Yen Facility into a USD-based Facility with the lender at this fixed exchange rate, but otherwise on the same terms and with the same collateral.  These particular forward foreign exchange contracts do not qualify for hedge accounting treatment and have thus been accounted for as economic hedges.  Please refer to Note 20 – Subsequent Event for information related to the settlement of these hedging contracts.

The following table summarizes the remaining notional values as of March 31, 2015, of these contracts:

(All Amounts in Thousands)
			Amount Available
Transaction Date	Type of Currency		in Dollars	Effective Date	Expiration Date
May-14	Yen	$	28,219	Jan-15	Dec-15
Sep-14	Peso		675	Jan-15	Dec-15
Oct-14	Peso		675	Jan-15	Dec-15
Dec-14	Peso		450	Jan-15	Dec-15
		$	30,019

NOTE 12 – LONG TERM DEBT

We have up to a $95.0 million senior secured credit facility (“Credit Facility”) which is comprised of a term loan facility in the principal amount of $45.0 million and a revolving credit facility (“LOC”) in the principal amount of up to $50.0 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 subject to certain financial requirements.  As of March 31, 2015, we had $41.0 million of borrowings and $7.6 million of letters of credit outstanding under our LOC, leaving approximately $1.4 million of additional 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 the Company’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.

14

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 stipulating as of March 31, 2015 that we maintain a consolidated leverage ratio of 5.0 to 1.0, an EBITDAR to fixed charges ratio of at least 1.05 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, minus impairment losses, plus 50% of our consolidated net income earned after December 31, 2011, excluding impairment loss, 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).

During the first quarter of 2015, we paid off approximately $13.5 million in debt in connection with the sale of one of our Handysize vessels.  Additionally, we wrote off approximately $95,000 of unamortized loan costs associated with the debt instrument which is reflected in loss on extinguishment of debt on our condensed consolidated statement of operations.

We guarantee two separate loan facilities of two separate shipping companies in which one of our wholly-owned subsidiaries has indirect ownership interests.  With respect to one of the two loan facilities of these shipping companies, in which our wholly-owned subsidiary indirectly owns a 25% interest, we guarantee 5% of the amount owed under the loan facility.  As of March 31, 2015 and December 31, 2014, this guarantee obligation equated to approximately $3.6 million, respectively.  The amount of this guarantee reduces semi-annually by approximately $165,000 through December 2018.  Under the second facility, in which our wholly-owned subsidiary indirectly owns approximately 23.7% of the borrower, we guarantee only $1.0 million of the approximately $11.0 million loan facility.  This second guarantee is non-amortizing and is scheduled to expire in December 2018.  In December 2017, we anticipate that this guarantee will be reduced from $1.0 million to $510,000 as a result of a scheduled payment of a portion of the facility.

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

(All Amount in Thousands)	Interest Rate					Total Principal Due
	March 31,		December 31,		Maturity	March 31,		December 31,
Description of Secured Debt	2015		2014		Date	2015		2014
Notes Payable – Variable Rate 1	2.7703	%	2.7471	%	2018	$	11,166	$	12,025
Notes Payable – Variable Rate	2.675-2.714	%	2.7312-2.7324	%	2018		26,986		41,400
Notes Payable – Variable Rate	2.5219	%	2.5050	%	2017		8,584		9,144
Notes Payable – Variable Rate 1	2.7561	%	2.7350	%	2018		15,080		15,394
Notes Payable – Variable Rate 2	3.6100	%	3.6100	%	2020		24,020		24,812
Notes Payable – Variable Rate 3	4.0100	%	3.9900	%	2018		41,063		41,906
Notes Payable – Fixed Rate 4	4.3500	%	4.3500	%	2020		37,019		37,759
Notes Payable – Variable Rate 5	2.9220	%	2.9195	%	2021		21,120		21,943
Note Payable - Mortgage 6							5		5
Line of Credit 3	3.9700	%	3.9100	%	2018		41,000		38,500
							226,043		242,888
			Less: Current Maturities				(22,412)		(23,367)
						$	203,631	$	219,521

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch in June 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 in June 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 15  

in August 2020.  This loan requires us to pre-fund a one-third portion of the upcoming quarterly scheduled debt payment, which, at March 31, 2015, constituted $0.4 million and is included as restricted cash on the balance sheet.

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.

Effective September 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 approximately $11.3 million in deferred gains resulting from the September 2014 vessel purchase and refinancing transactions.  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 to require us to maintain (i) 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 (ii) a minimum fixed charge coverage ratio of 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). 

During the first quarter of 2015, there was concern that we would be unable to meet all of our required debt covenants. As such, we received waivers from our lenders and lessors for certain covenants contained in our financing and lease agreements.  We received permission from certain lenders and lessors to incur up to $15 million in additional indebtedness for general corporate purposes.  We also received from certain lenders and lessors permission to incur additional indebtedness in connection with the refinancing of a foreign currency loan facility and our payoff of a related foreign currency interest rate swap.   We received from certain lenders and lessors a restatement of the fixed charge coverage ratio to a minimum 1.05 to 1.0 for the fiscal year 2015, 1.15 to 1.0 beginning with the quarter ending March 31, 2016, and 1.20 to 1.0 beginning with the quarter ending June 30, 2016 and for all periods thereafter.  The manner in which this fixed charge coverage ratio is determined and calculated differs under our various loan or lease agreements.  Two other lenders provided short-term relief by agreeing to amend, for 2015 only, the manner in which the leverage ratio will be calculated under the relevant agreement.  As a result of these waivers and concessions granted early this year, we were in compliance with all of our debt covenants as of March 31, 2015.

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 for the next twelve months, but we cannot assure you of this.

In addition to the restrictions under our 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.

During the second quarter of 2015, the Company refinanced its Yen-based credit facility and settled the related interest rate swap and foreign exchange contracts. For more information on the refinance, see Note 20 – Subsequent Event.

Liquidity and Covenant Compliance

Beginning in the fourth quarter of fiscal year 2014, we commenced a plan to evaluate our liquidity and capital resource needs for fiscal year 2015.  Our plan included the reduction of our quarterly cash dividend on common stock and the identification of five non-performing assets that were approved for sale by our Board of Directors during the fourth quarter of 2014 and classified as Assets Held for Sale on our December 31, 2014 balance sheet.  Additionally, in the fourth quarter of 2014, we completed the renewal of our contract with TEC.  As a result of this contract renewal and the impairment recorded on one of our assets held for sale, we evaluated the recoverability of our deferred tax assets and concluded that it is more likely than not that we will not recognize the benefits of our federal tax attributes and therefore, recorded a valuation allowance on our deferred tax assets during the fourth quarter of 2014. We recorded an increase in this valuation allowance of $730,000 for the three months ended March 31, 2015.

One of our held for sale assets was sold prior to December 31, 2014 and on March 5, 2015, we finalized the sale of one of the four remaining held for sale assets.  We are actively marketing the remaining three assets.  The estimated proceeds from the remaining three assets held for sale are an integral part to our compliance with our minimum liquidity requirements.  Additionally, to generate

16

additional liquidity, we could sell unencumbered vessels in our fleet and defer capital expenditures and dry docking costs that are not required until 2016.

We are also currently in discussions with our creditors to refinance certain unencumbered assets for approximately $12.0 million, and we believe this will be executed by the end of the second quarter of 2015. In addition to this amendment, we are also in the process of obtaining bank financing for approximately $6.9 million which will go towards the construction and renovation of our future corporate office in New Orleans.  We anticipate closing this financing by the end of the second quarter of 2015. In addition to the $6.9 million in bank financing, we have received approximately $4.6 million in incentives from the State of Louisiana and expect to receive another $0.6 million of incentives during 2015 which will offset part of the cost of constructing the new corporate office.  The remaining cost of approximately$6.9 million to complete the construction of the building will be funded by cash on hand.  If we are unsuccessful in refinancing certain unencumbered assets, we could re-market our requests with other interested parties, seek loan refinancing to further monetize asset values on other vessels, or attempt to access the equity markets under our current open shelf registration. The timing and success of our financing activities cannot be assured.

Failure to execute our plan could impact our ability to be in compliance with our quarterly debt covenants in 2015 and 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.  Moreover, because our debt obligations are represented by separate agreements with different lenders, in some cases any breach of these covenants or any 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).  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 our debt obligations under multiple lending agreements.  The acceleration of any or all amounts due under our debt agreements or the loss of the ability to borrow under our revolving credit facility or other debt agreements could have a material adverse effect on our business, financial condition, results of operations and cash flows.  In the event of non-compliance with our debt covenants, we would seek to amend the covenants, obtain waivers from each of our lenders in order to cure any instances of non-compliance, or sell vessels that are currently unencumbered by debt or that serve as collateral against our outstanding debt obligations.  The disposition of one or more of these vessels would provide us with additional liquidity and capital resources that could be used to pay down the balances owed under our current debt obligations.

NOTE 13 – OTHER LONG TERM LIABILITIES

Other Long Term Liabilities as of March 31, 2015 and December 31, 2014 were $49.0 million and $50.3 million, respectively.

(All Amounts in Thousands)	March 31,		December 31,
	2015		2014
Deferred Gains, net of Amortization	$	16,970	$	17,917
Pension and Post Retirement		12,221		12,497
Alabama Lease Incentive		5,452		5,739
Insurance Reserves		5,319		4,941
Derivatives		6,911		7,050
Deferred Tax Liability		235		408
Other		1,862		1,732
	$	48,970	$	50,284

NOTE 14 – 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.  RSUs are granted in a combination of time based and performance based units. These awards are granted under the International Shipholding Corporation 2011 Stock Incentive Plan (the “Plan”), which was approved by our stockholders in 2011.  In the first quarter of 2015, we granted 8,100 unrestricted shares to its outside directors and 42,650 RSUs to key executive personnel. Additionally, during the first quarter of 2015, our key executive personnel forfeited 37,700 shares from certain performance based RSUs granted in 2012 and 2014 and modified awards originally granted in 2013. Our total compensation expense related to these plans was approximately $2,000 and $447,000 for the three months ended March 31, 2015 and 2014, respectively, which is reflected in administrative and general expenses.

17

NOTE 15 – STOCKHOLDERS’ EQUITY

A summary of the changes in Stockholders’ equity for the three months ended March 31, 2015, is as follows:

(All Amounts in Thousands)	Stockholders'
	Equity
Balance at December 31, 2014	$	267,610
Net Loss		(4,501)
Common Stock Dividends*		(1,862)
Preferred Stock Dividends		(1,305)
Unrealized Foreign Currency Translation Gain		(61)
Net Change in Fair Value of Derivatives		240
De-Designation of Interest Rate Swap		2,859
Net Change in Funding Status of Defined Benefit Plan		304
Issuance of stock-based compensation		2
Balance at March 31, 2015	$	263,286

*Includes approximately $34,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Stock Repurchase Program

On January 25, 2008, our Board 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 our Board of Directors otherwise provides, this authorization will remain open indefinitely, or until we reach the approved 1,000,000 share limit. As of March 31, 2015, the maximum number of shares that may yet be purchased under the Plan was 285,377 shares.

Dividend Payments

The payment of dividends to common stockholders and preferred stockholders is 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.

During the three months ended March 31, 2015, we paid cash dividends on our common stock as follows:

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	19-Feb-15	4-Mar-15	$	0.25	$	1,828

During the three months ended March 31, 2015, we paid cash dividends on our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Series	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	29-Jan-15	A	30-Jan-15	$	2.375	$	594
7-Jan-15	29-Jan-15	B	30-Jan-15	$	2.250	$	711
						$	1,305

18

NOTE 16 – LOSS PER SHARE

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of the conversion of restricted stock units. We had net losses attributable to common stockholders for the three months ending March 31, 2015 and 2014; therefore, the impact of any incremental shares issuable under our outstanding restricted stock units because the net loss with respect to such shares would have been anti-dilutive.

NOTE 17 – 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 March 31, 2015 and December 31, 2014, segregated by the above-described levels of valuation inputs:

(All Amounts in Thousands)	March 31, 2015
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,093)	$	-	$	(7,093)
(All Amounts in Thousands)	December 31, 2014
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,348)	$	-	$	(7,348)

The carrying amounts of our accounts receivable, accounts payable and accrued liabilities approximated their fair value at March 31, 2015 and December 31, 2014. We estimated the fair value of our variable rate long-term debt at March 31, 2015, including current

19

maturities, to equal approximately $227.9 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 18 – NEW ACCOUNTING PRONOUNCEMENTS

In February 2015, the FASB issued ASU 2015-02 “Amendments to the Consolidation Analysis”. The amendments in ASU 2015-02 affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The adoption of ASU 2015-02 is not expected to have material impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 “Simplifying the Presentation of Debt Issuance Costs”. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. ASU 2015-03 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. Management is currently in the process of evaluating the impact of this amendment.

Management reviewed all other significant newly issued accounting pronouncements and concluded that they are either not applicable to our business or that we do not expect their future adoption to have a material effect is expected on our condensed consolidated financial statements.

NOTE 19 – CHANGE IN ACCOUNTING ESTIMATE

Based on company policy, we review the reasonableness of our salvage values every three years based on the most recent three year average price of scrap steel per metric ton. In the first quarter of 2015, we reviewed and adjusted the salvage values based on changes in the market value of scrap steel. This adjustment resulted in a decrease in salvage values of approximately $0.6 million. The impact of this adjustment on depreciation expense for the first quarter of 2015, as well as for future periods, was immaterial.

NOTE 20 – SUBSEQUENT EVENT

On April 24, 2015, we entered into a new loan agreement with DVB Bank SE in the amount of $32.0 million by refinancing our 2010 built PCTC. We received the loan proceeds on April 24, 2015 and applied them as follows: (i) $28.1 million to pay off an outstanding Yen facility in the amount of 2.9 billion Yen and the related Yen forward contract and (ii) $2.9 million to settle a Yen denominated interest rate swap.  Under the new DVB loan agreement, interest will be payable at a fixed rate of 4.16% with the principal being paid quarterly over a five-year term based on an amortization of ten years with a final quarterly balloon payment of $16.8 million due on April 22, 2020.  As part of the settlement of the interest rate swap, we recorded a derivative loss of $2.8 million in the first quarter of 2015, which was previously classified as an unrecognized loss in Other Accumulated Comprehensive Income. We anticipate additional losses in the second quarter of 2015 of approximately $0.5 million as a result of the early debt payoff and related derivative settlement.

20

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.

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.

21

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;

· 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 in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014.

Due to these uncertainties, we cannot assure that we will attain our anticipated results, that our judgments or assumptions will prove correct, or that unforeseen developments will not occur.  Accordingly, you are cautioned not to place undue reliance upon any of our forward-looking statements, which speak only as of the date made.  Additional risks that we currently deem immaterial or that are not presently known to us could also cause our actual results to differ materially from those expected in our forward-looking statements.  We undertake no obligation to update or revise for any reason any forward-looking statements made by us or on our behalf, 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 such forward-looking statement, and is based upon, among other things, the existing industry and competitive conditions, regulatory environment and 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.

22

Executive Summary

Overview of First Quarter 2015

Overall Strategy

The company operates a diversified fleet of U.S. and foreign flag vessels that provide international and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term contracts. Our business strategy consists of identifying growth opportunities as market needs change, utilizing our extensive experience to meet those needs, 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

In spite of the weak dry bulk rates and unexpected off-hire days in our UOS Gulf of Mexico service, gross voyage profit increased from $10.0 million in the first quarter of 2014 to $11.5 million for the same period in 2015. Stronger than expected supplemental cargoes, improved results from our equity investments and settlement of a prior year claim more than offset the weaker market conditions. Our total fixed revenues decreased from $54.9 million in the first quarter of 2014 to $51.3 for the first three months of 2015, primarily due to an increase in off-hire days in our UOS Gulf of Mexico service. Our variable revenues decreased by $1.0 million year over year, principally due to lower dry bulk rates from our Handysize and Supramax vessels, partially offset by our supplemental cargoes.

As previously disclosed in our 2014 Form 10-K, we have marketed for sale our three Handysize vessels and one laid up tug-barge unit and incurred certain impairment charges in connection therewith.  In the first quarter of 2015, we sold one of the Handysize vessels and generated approximately $2.9 million in cash after the settlement of the related debt. We plan to continue to market the remaining vessels for sale. If weak dry bulk markets continue to put downward pressure on vessel values or we elect to market other vessels for sale, we might incur additional impairment charges in the future.

In the first quarter of 2015, we received approximately $4.2 million from the cancellation of a shipbuilding contract due to failure of the shipyard to comply with the contract terms. Also during the first quarter of 2015, we received from the U.S. Military Sealift Command (“MSC”) approximately $0.9 million in settlement of MSC’s early termination in 2012 of its time charter of our ice-strengthened multi-purpose vessel, which we have successfully redeployed under a long-term bareboat charter.

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 aggregate fair value of the vessels in each of our segments (based upon projected segment undiscounted cash flows) exceed each of our segment vessels’ aggregate carrying amounts. Based on our most recent assessment, we determined that no impairments existed as of March 31, 2015.  As of this date, the total aggregated fair value of the vessels that we own, based on the appraisal of each vessel, was $456.9 million, as compared to the total aggregated net book value of $389.5 million.

Consolidated Financial Performance – First Quarter 2015 vs. First Quarter 2014

Overall, our net loss increased from $3.2 million in the first quarter of 2014 to a net loss of $4.5 million in the first quarter of 2015. Excluding the impact of a $2.8 million derivative loss in the first quarter of 2015 due to the early settlement of an interest rate swap in connection with the refinancing of our Yen-based facility to a USD-based facility and a $1.4 million gain from the settlement of MSC’s contract termination, our net loss for the first quarter of 2015 would have been $3.1 million. Operating income improved from a loss of $2.3 million in 2014 to approximately breakeven in 2015. Our tax expense increased year over year by approximately $0.9 million due to recognition of a valuation allowance on our deferred tax assets beginning at December 31, 2014.  Our investment in unconsolidated entities improved by $1.0 million and was due to improved results from our interest in mini-bulkers and results from the Chemical and Asphalt Tankers that began service in the middle of 2014. Other items of note include: 

§ Increase in consolidated gross voyage profit of $1.5 million primarily due to increases in our Specialty segment results.

§ Decrease in administrative and general expenses due to lower stock incentive expenses.

§ Improved results from our existing equity investments as well as additional income from investments that began service in the second half of 2014.

§ Increase of $0.5 million in interest cost due to financing of a 2007 PCTC purchased in the third quarter of 2014.

§ Total cash available of $21.8 million.

§ Decrease in total debt of $16.8 million from December 31, 2014 to March 31, 2015 primarily due to the payoff of debt related to the Handysize vessel that was sold in the first quarter of 2015.

23

Segment Performance – First Quarter 2015 vs. First Quarter 2014

Jones Act

§ Decrease in gross voyage profit of $2.0 million primarily due to increased off-hire days and lower voyage freight rates in our UOS Gulf of Mexico service.

Pure Car Truck Carriers

§ Increase in gross voyage profits of $1.7 million primarily due to stronger supplemental cargoes.

Dry Bulk Carriers

§ Decrease in gross voyage profits of $0.3 million.

§ Results driven by lower dry bulk rates partially offset by the performance from our Capesize vessel’s medium term time charter contract and unconsolidated entities.

Rail-Ferry

§ Decrease in gross voyage profits of $0.4 million was driven by lower northbound cargo volume.

Specialty Contracts

§ Increase in gross voyage profits of $2.5 million primarily due to the above-described MSC claim settlement and our recent investment in two unconsolidated entities owning two Asphalt and two Chemical Tankers.

Financial Discipline & Balance Sheet

§ Total cash of $21.8 million at March 31, 2015.

§ Cash generated by operating activities of $1.9 million for the three months ended March 31, 2015.

§ Working capital of $6.4 million at March 31, 2015.

§ Approximately $1.4 million of borrowing capacity available on our line of credit at March 31, 2015.

24

The following table lists the 54 vessels in our operating fleet as of March 31, 2015, 20 of which are owned by our wholly-owned subsidiaries:

							Bareboat			Deadweight
				Year	Business		Charter/	Operating	Partially	Carrying
		Vessels		Built	Segment (1)	Owned	Leased	Contracts	Owned	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/ALABAMA 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/LOUISIANA ENTERPRISE	ATB TUG/BARGE UNIT	1973/1984	Jones Act	X				33,529
6		COASTAL 202/FLORIDA ENTERPRISE	ITB TUG/BARGE UNIT	1977	Jones Act	X				33,220
7		TEXAS ENTERPRISE	BULK CARRIER	1981	Jones Act	X				37,061
8		MISSISSIPPI 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				18,090
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 WAVE	HANDYSIZE BULK CARRIER	2011	Dry Bulk	X				35,916
21		BULK AUSTRALIA	CAPESIZE BULK CARRIER	2003	Dry Bulk	X				170,578
22		BULK AMERICAS	SUPRAMAX  BULK CARRIER	2012	Dry Bulk	X				57,959
23		OSLO BULK 1	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
24		OSLO BULK 2	MINI BULK CARRIER	2010	Dry Bulk				X	8,028
25		OSLO BULK 3	MINI BULK CARRIER	2010	Dry Bulk				X	8,029
26		OSLO BULK 4	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
27		OSLO BULK 5	MINI BULK CARRIER	2010	Dry Bulk				X	8,040
28		OSLO BULK 6	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
29		OSLO BULK 7	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
30		OSLO BULK 8	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
31		OSLO BULK 9	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
32		OSLO BULK 10	MINI BULK CARRIER	2011	Dry Bulk				X	8,040
33		OSLO BULK 11	MINI BULK CARRIER	2008	Dry Bulk				X	8,000
34		SEA CARRIER	MINI BULK CARRIER	2010	Dry Bulk				X	9,300
35		OSLO CARRIER 2	MINI BULK CARRIER	2010	Dry Bulk				X	9,300
36		OSLO CARRIER 3	MINI BULK CARRIER	2011	Dry Bulk				X	9,300
37		SEA STEAMER	MINI BULK CARRIER	2011	Dry Bulk				X	9,300
38		OSLO MERCHANT	MINI BULK CARRIER	2004	Dry Bulk				X	16,300
39		BOW TRAJECTORY	CHEMICAL TANKER	2014	SP				X	50,510
40		BOW TRIBUTE	CHEMICAL TANKER	2014	SP				X	50,510
41		ASPHALT SPRING	ASPHALT TANKER	2007	SP				X	6,726
42		ASPHALT SUMMER	ASPHALT TANKER	2007	SP				X	6,654
43		MAERSK ALABAMA	CONTAINER VESSEL	1998	SP		X			17,525
44		MAERSK CALIFORNIA	CONTAINER VESSEL	1992	SP		X			25,375
45		MARINA STAR 2	CONTAINER VESSEL	1982	SP			X		13,193
46		MARINA STAR 3	CONTAINER VESSEL	1983	SP			X		13,193
47		TERRITORY TRADER	CONTAINER VESSEL	1991	SP			X		3,183
48		FLORES SEA	MULTI-PURPOSE VESSEL	2008	SP			X		11,151
49		SAWU SEA	MULTI-PURPOSE VESSEL	2008	SP			X		11,184
50		OCEAN HERO	TANKER	2011	SP			X		13,543
51		OCEAN PREMIER	TANKER	2011	SP		X			19,382
52		OCEAN GIANT	MULTI-PURPOSE HEAVY LIFT DRY CARGO VESSEL	2012	SP		X			19,382
53		OCEAN GLOBE	MULTI-PURPOSE HEAVY LIFT DRY CARGO VESSEL	2011	SP		X			19,382
54		OSLO WAVE	ICE STRENGTHENED MULTI-PURPOSE VESSEL	2000	SP	X				17,381
						20	8	6	20	1,182,126
	(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

25

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 loss.

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Revenues	$	68,026	$	72,694
Voyage Expenses		52,211		57,433
Amortization Expense		5,187		5,163
Net (Income) Loss of Unconsolidated Entities		(893)		108
Gross Voyage Profit		11,521		9,990
Vessel Depreciation		5,543		6,721
Other Depreciation		184		184
Gross Profit		5,794		3,085
Other Operating Expenses:
Administrative and General Expenses		5,022		5,449
Loss on Sale of Other Assets		68		-
Less:  Net Income (Loss) of Unconsolidated Entities		893		(108)
Total Other Operating Expenses		5,983		5,341
Operating Loss	$	(189)	$	(2,256)

26

RESULTS OF OPERATIONS

three MONTHS ENDED MARCH 31, 2015

COMPARED TO THE three MONTHS ENDED MARCH 31, 2014

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	24,595		$	14,247		$	1,868		$	-		$	10,571		$	-	$	51,281
Variable Revenue		-			7,533			1,255			7,785			185			(13)		16,745
Total Revenue from External Customers		24,595			21,780			3,123			7,785			10,756			(13)		68,026
Voyage Expenses		18,590			17,020			2,580			6,886			7,557			(422)		52,211
Amortization Expense		3,828			715			61			285			298			-		5,187
Loss (Income) of Unconsolidated Entities		-			-			(635)			74			(332)			-		(893)
Gross Voyage Profit	$	2,177		$	4,045		$	1,117		$	540		$	3,233		$	409	$	11,521
Gross Voyage Profit Margin		9	%		19	%		36	%		7	%		30	%		-		17	%
2014
Fixed Revenue	$	29,100		$	15,615		$	1,526		$	-		$	8,702		$	-	$	54,943
Variable Revenue		-			3,941			3,590			7,926			2,248			46		17,751
Total Revenue from External Customers		29,100			19,556			5,116			7,926			10,950			46		72,694
Voyage Expenses		21,209			16,663			3,566			6,846			9,476			(327)		57,433
Amortization Expense		3,667			535			77			160			724			-		5,163
Loss of Unconsolidated Entities		-			-			80			28			-			-		108
Gross Voyage Profit	$	4,224		$	2,358		$	1,393		$	892		$	750		$	373	$	9,990
Gross Voyage Profit Margin		15	%		12	%		27	%		11	%		7	%		-		14	%

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.

27

Revenues and Gross Voyage Profits

The following table shows the breakout of revenues by segment between fixed and variable for the three months ended March 31, 2015 and 2014:

28

Segment Revenue and Expense

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

Jones Act

Revenue and gross voyage profit decreased by $4.5 million and $2.0 million, respectively, when comparing the first quarter of 2015 to the first quarter of 2014. These reductions were primarily due to (i) an increase in non-operating days subject to offset by a claim relating to an improperly maintained ship channel and (ii) a reduction in voyage freight rates from our new agreement with Tampa Electric Company, which took effect in mid-November 2014 and resulted in a reduction of revenue of $3.9 million. Voyage expense as a percentage of revenue was comparable year over year.

Pure Car Truck Carriers

Revenue increased by $2.2 million when comparing the first quarter of 2015 to the first quarter of 2014. The increase in revenue and related increase in gross voyage profit was attributable to higher supplemental cargo in 2015 basis volume levels for specialized niche requirements returning to historical levels in recent months.

Dry Bulk Carriers

Revenue decreased by $2.0 million and gross voyage profit decreased by $0.3 million in the first quarter of 2015 from the first quarter of 2014. This decrease is due to lower Handysize and Supramax results as a result of lower dry bulk rates.  The decrease was partially offset by the results of our Capesize vessel, which is on a fixed time charter through the end of 2015, and improvements in the results of our investment in mini-bulker vessels.

Rail-Ferry

Revenue and voyage expense remained relatively unchanged for the first quarter of 2015 compared to the first quarter of 2014. An increase in drydock amortization expense and loss of unconsolidated entities resulted in a reduction of gross voyage profit of $0.4 million.

Specialty Contracts

Revenue decreased by $0.2 million while gross voyage profit increased by $2.5 million when comparing the first quarter of 2015 to the first quarter of 2014. The improved gross voyage results were due to the settlement of a prior year MSC claim that reduced segment expenses and improved results from our equity investments in two Chemical and two Asphalt Tankers that began service in the second half of 2014.

Depreciation Expense

Depreciation Expense was $5.7 million and $6.9 million for the three months ended March 31, 2015 and 2014, respectively. The $1.2 million decrease was primarily related to classifying certain assets as Assets Held for Sale and selling one vessel in the fourth quarter of 2014, slightly offset by an increase in depreciation expense related to the purchase of the PCTC vessel in the third quarter of 2014.

29

Administrative and General Expense

Administrative and General Expensewas $5.0 million and $5.4 million for the three months ended March 31, 2015 and 2014, respectively.  The following table shows the significant components of administrative and general expenses for the first quarter of 2015 and 2014:

(All Amounts in Thousands)	Three Months Ended March 31,
	2015		2014
Wages and Benefits	$	2,924	$	2,905
Executive Stock Compensation(1)		2		447
Professional Services		805		645
Office Building Expense		410		362
System Hardware and Software		72		125
Other		809		965
TOTAL	$	5,022	$	5,449

(1) The expenses we incurred in connection with grants of annual incentive stock awards to senior management during the first quarter of 2015 were almost completely offset by the impact of forfeitures of incentive awards granted in earlier periods.  See Note 14 – Stock Based Compensation.

Loss on Sale of Other Assets

During the first quarter of 2015, we sold a 36,000 dead weight ton Handysize vessel and its related equipment.  We received $16.4 million, net of commissions and other costs to sell, and recorded a loss on sale of asset of approximately $68,000 during the quarter.

Other Income and Expense

Interest Expensewas $2.7 million and $2.1 million for the three months ended March 31, 2015 and 2014, respectively.This increase was primarily attributable to the financing of a 2007 PCTC purchased back from our Lessor in the third quarter of 2014.

Derivative Loss was $2.8 million for the three months ended March 31, 2015 compared to $14,000 for the same period 2014. This increase in loss is primarily due to the early settlement of an interest rate swap in connection with the refinancing of our Yen-based facility to a USD-based facility. For more information, see Note 11 – Derivative Instruments.

Loss on Extinguishment of Debt was $0.1 million in the first quarter of 2015 as a result of writing off unamortized loan costs associated with the debt on the sale of one of our Handysize vessels.

Other Income from Vessel Financing was $445,000 and $489,000 in the first quarter of 2015 and 2014, respectively. The decrease was 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 $45,000 in the first quarter of 2015 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 119.72 Yen to 1 USD at December 31, 2014 compared to 120.13 Yen to 1 USD at March 31, 2015, net of the impact of our foreign forward exchange contracts that we have entered into to limit our exposure to fluctuations in the value of the Yen.  For more information on these arrangements, see Note 11 – Derivative Instruments.

Income Taxes

We recorded a tax provision of $39,000 on our $5.4 million loss before taxes and equity in net income of unconsolidated entities for the three months ended March 31, 2015.  For the first three months of 2014 we recorded an income tax benefit of $882,000 on our $4.0 million of loss before equity in net income of unconsolidated entities. These provision amounts represent our qualifying U.S. flag operations, which continue to be taxed under the “tonnage tax” provisions rather than the normal U.S. corporate income tax provisions, state income taxes paid, and foreign income tax withholdings or refunds.  We established a valuation allowance against deferred income tax assets in 2014 because, based on available information, we could not conclude that it was more likely than not that the full amount of deferred income tax assets generated primarily by NOL carryforwards and AMT credits would be realized through the generation of taxable income in the near future. We have and will continue to evaluate the need for a valuation allowance on a quarterly basis.  We recorded an increase in our valuation allowance of $730,000 for the three months ending March 31, 2015.

30

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2014, including Note J - Income Taxesto the consolidated financial statements included therein.

Equity in Net Income of Unconsolidated Entities

Equity in net income from unconsolidated entities, net of taxes, was $0.9 million for the three months ended March 31, 2015 compared to a net loss of $0.1 million for the same period 2014. The increase is primarily due to our 30% investment in entities owning two Asphalt and two Chemical Tankers, which began service in the second half of 2014, coupled with improved results from our interest in mini-bulkers.

31

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 was $6.4 million and $9.4 million at March 31, 2015 and December 31, 2014, respectively. The $3.0 million decrease in working capital was primarily driven bya decrease in accounts receivable and other current assets that was partially offset by a decrease in current liabilities. Total current liabilities of $70.2 million as of March 31, 2015 included $22.4 million of current maturities of long-term debt.

Restricted Cash

As of March 31, 2015, we had approximately $0.4 million of cash classified as restricted cash, which represents pre-funding of the upcoming quarterly scheduled debt payment on the PCTC bank debt we incurred in the third quarter of 2014.

As of December 31, 2014, we had $1.4 million of cash classified as restricted cash of which $1.0 million related to certain UOS performance guarantees and $0.4 million was required escrow of upcoming debt payments.

Net Cash Provided by Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2015 was $1.9 million after adjusting our net loss of $4.5 million for non-cash items such as depreciation, deferred charges, amortization, and non-cash stock based compensation, which was partially offset by increases in deferred drydock charges and a decrease in accounts payable and accrued expenses of $5.5 million and $3.8 million, respectively, a decrease in inventory and other current assets of $3.9 million, and various other items specified in our condensed consolidated statements of cash flows. 

Net Cash Provided by Investing Activities

Net cash provided by investing activities of $18.8 million for the three months ended March 31, 2015 primarily consisted of $16.4 million in cash proceeds received from the sale of our Handysize vessel and $3.9 million in cash proceeds from the collection of a receivable which had previously been classified as a cash outflow from investing activities as it was related to capital expenditures, slightly offset by $3.3million of capital outlays.

Net Cash Used in Financing Activities

Net cash used in financing activities of $20.0 million for the three months ended March 31, 2015 was primarily due to dividends paid of $3.1 million and principal payments on long term debt of $19.4 million slightly offset by net proceeds of $2.5 million of borrowings from our line of credit.The principal payment of $19.4 million includes the early prepayment of $13.5 million for the debt associated with the sale of our Handysize vessel.

32

Capital Expenditures

Our capital expenditures relate primarily to the purchase of vessels and capital improvements that enhance the value or safety of our vessels.

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. We are also currently incurring capital expenditures to construct an office building which, upon completion, will serve as our new headquarters office. 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. For the three months ended March 31, 2015, our total cash paid for capital expenditures was  $8.8 million, of which $5.5 million related to drydock, $2.4 million related to construction of our new corporate office in New Orleans, and $0.9 million related to other corporate investments.

Based on our current plans and strategies, we estimate expected capital improvements to vessels and drydock expenditures to be within the $35.0 million and $40.0 million range for the year, excluding approximately $11.6 million to complete the corporate office in New Orleans, LA.

Debt and Lease Obligations

Debt Obligations

We have up to a $95.0 million senior secured credit facility (“Credit Facility”) which is comprised of a term loan facility in the principal amount of $45.0 million and a revolving credit facility (“LOC”) in the principal amount of up to $50.0 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 up to $50.0 million may be advanced subject to certain financial requirements.  As of March 31, 2015, we had $41.0 million of borrowings and $7.6 million of letters of credit outstanding under our LOC, leaving approximately $1.4 million of additional 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.

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 stipulating as of March 31, 2015 that we maintain a consolidated leverage ratio of 5.0 to 1.0, an EBITDAR to fixed charges ratio of at least 1.05 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, minus impairment losses, plus 50% of our consolidated net income earned after December 31, 2011, excluding impairment loss, 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 and future terms of these covenants, amendments to our covenants, and our compliance with these covenants, see “– Debt Covenants” below.

On September 30, 2014 and March 31, 2015, we amended the Credit Facility and our other loan agreements in the manner discussed below under the heading “– Debt Covenants.”

During the first quarter of 2015, we paid off approximately $13.5 million in debt in connection with the sale of one of our Handysize vessels.  Additionally, we wrote off approximately $95,000 of unamortized loan costs associated with the debt instrument which is reflected in loss on extinguishment of debt on our condensed consolidated statement of operations.

We guarantee two separate loan facilities of two separate shipping companies in which one of our wholly-owned subsidiaries has indirect ownership interests.  With respect to one of the two loan facilities of these shipping companies, in which our wholly-owned subsidiary indirectly owns a 25% interest, we guarantee 5% of the amount owed under the loan facility.  As of March 31, 2015 and December 31, 2014, this guarantee obligation equated to approximately $3.6 million, respectively.  The amount of this guarantee reduces semi-annually by approximately $165,000 through December 2018.  Under the second facility, in which our wholly-owned subsidiary indirectly owns approximately 23.7% of the borrower, we guarantee only $1.0 million of the approximately $11.0 million loan facility.  This second guarantee is non-amortizing and is scheduled to expire in December 2018.  In December 2017, we anticipate that this guarantee will be reduced from $1.0 million to $510,000 as a result of a scheduled payment of a portion of the facility.

33

We owe various sums under several other credit agreements.  For information on these other credit agreements, see Note 12 – Long Term Debt.

Lease Obligations

As of March 31, 2015, we held six vessels under operating contracts and eight 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 Pure Car Truck Carriers that operate under our PCTC segment, (iii) two Multi-Purpose vessels, two Tankers, five Container vessels, and two Heavy Lift vessels, 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 the lessor’s 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.

We also conduct certain of our operations from leased office facilities.  In 2013, we executed a five year lease agreement for office space in Tampa, Florida housing our UOS 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 two year lease agreement for our Shanghai, China office space. This lease is effective October 1, 2013 through September 30, 2015.

We plan to relocate our corporate headquarters from Mobile, Alabama to New Orleans, Louisiana in the first quarter of 2016 after we complete renovations of a new facility in downtown New Orleans. Our renovation and relocation costs will be partially offset by approximately $10.3 million in incentives offered by the State of Louisiana. We are planning to sublease our Mobile office lease in later part of 2015.   If a lessee cannot be secured we may incur a potential cash outlay of approximately $3.1 million.  In late 2014, we signed an eighteen month lease agreement for temporary office space in New Orleans which will hold our employees until the completion of the corporate office building.

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, 2014 under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations and Other Commitments.” 

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.

Effective September 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 approximately $11.3 million in deferred gains resulting from the September 2014 vessel purchase and refinancing transactions.  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 to require us to maintain (i) 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 (ii) a minimum fixed charge coverage ratio of 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). 

During the first quarter of 2015, there was concern that we would be unable to meet all of our required debt covenants. As such, we received waivers from our lenders and lessors for certain covenants contained in our financing and lease agreements.  We received permission from certain lenders and lessors to incur up to $15 million in additional indebtedness for general corporate purposes.  We also received from certain lenders and lessors permission to incur additional indebtedness in connection with the refinancing of a foreign currency loan facility and our payoff of a related foreign currency interest rate swap.   We received from certain lenders and lessors a restatement of the fixed charge coverage ratio to a minimum 1.05 to 1.0 for the fiscal year 2015, 1.15 to 1.0 beginning with the quarter ending March 31, 2016, and 1.20 to 1.0 beginning with the quarter ending June 30, 2016 and for all periods thereafter.  The manner in which this fixed charge coverage ratio is determined and calculated differs under our various loan or lease agreements.  Two other lenders provided short-term relief by agreeing to amend, for 2015 only, the manner in which the leverage ratio will be calculated under the relevant agreement.  Additionally, we received from one of our lenders in 2015, relief under our loan to value ratio test.  As a result of these waivers and concessions granted early this year, we were in compliance with all of our debt covenants as of March 31, 2015.

34

Liquidity and Covenant Compliance

Beginning in the fourth quarter of fiscal year 2014, we commenced a plan to evaluate our liquidity and capital resource needs for fiscal year 2015.  Our plan included the reduction of our quarterly cash dividend on common stock and the identification of five non-performing assets that were approved for sale by our Board of Directors during the fourth quarter of 2014 and classified as Assets Held for Sale on our December 31, 2014 balance sheet.  Additionally, in the fourth quarter of 2014, we completed the renewal of our contract with TEC.  As a result of this contract renewal and the impairment recorded on one of our assets held for sale, we evaluated the recoverability of our deferred tax assets and concluded that it is more likely than not that we will not recognize the benefits of our federal tax attributes and therefore, recorded a valuation allowance on our deferred tax assets during the fourth quarter of 2014. We recorded an increase in this valuation allowance of $730,000 for the three months ended March 31, 2015.

One of our held for sale assets was sold prior to December 31, 2014 and on March 5, 2015, we finalized the sale of one of the four remaining held for sale assets.  We are actively marketing the remaining three assets.  The estimated proceeds from the remaining three assets held for sale are an integral part to our compliance with our minimum liquidity requirements.  Additionally, to generate additional liquidity, we could sell unencumbered vessels in our fleet and defer capital expenditures and dry docking costs that are not required until 2016.

We are also currently in discussions with our creditors to refinance certain unencumbered assets for approximately $12.0 million, and we believe this will be executed by the end of the second quarter of 2015. In addition to this amendment, we are also in the process of obtaining bank financing for approximately $6.9 million which will go towards the construction and renovation of our future corporate office in New Orleans.  We anticipate closing this financing by the end of the second quarter of 2015. In addition to the $6.9 million in bank financing, we have received approximately $4.6 million in incentives from the State of Louisiana and expect to receive another $0.6 million of incentives during 2015 which will offset part of the cost of constructing the new corporate office.  The remaining cost of approximately$6.9 million to complete the construction of the building will be funded by cash on hand.  If we are unsuccessful in refinancing certain unencumbered assets, we could re-market our requests with other interested parties, seek loan refinancing to further monetize asset values on other vessels, or attempt to access the equity markets under our current open shelf registration. The timing and success of our financing activities cannot be assured.

Failure to execute our plan could impact our ability to be in compliance with our quarterly debt covenants in 2015 and 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.  Moreover, because our debt obligations are represented by separate agreements with different lenders, in some cases any breach of these covenants or any 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).  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 our debt obligations under multiple lending agreements.  The acceleration of any or all amounts due under our debt agreements or the loss of the ability to borrow under our revolving credit facility or other debt agreements could have a material adverse effect on our business, financial condition, results of operations and cash flows.  In the event of non-compliance with our debt covenants, we would seek to amend the covenants, obtain waivers from each of our lenders in order to cure any instances of non-compliance, or sell vessels that are currently unencumbered by debt or that serve as collateral against our outstanding debt obligations.  The disposition of one or more of these vessels would provide us with additional liquidity and capital resources that could be used to pay down the balances owed under our current debt obligations

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 for the next twelve months, but we cannot assure you of this.

35

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 three months ended March 31, 2015:  

				Required at
		Actual		March 31, 2015
Net Worth (thousands of dollars) (1)	$	260,551	$	255,000
Working Capital (thousands of dollars) (2)	$	6,352	$	1
Interest Expense Coverage Ratio (minimum) (3)		4.29		2.50
EBITDAR to Fixed Charges Ratio (minimum) (4)		1.08		1.08
EBITDAR to Fixed Charges Ratio (minimum) (4) Foreign		1.27		1.15
Total Indebtedness to EBITDAR Ratio (maximum) (5)		4.53		5.00
Total Indebtedness to EBITDAR Ratio (maximum) (5) Foreign		3.92		4.50
Minimum Liquidity (6)	$	22,793	$	20,000

1. Defined as total stockholders’ 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.  We currently believe that we will be able to attain all of our financial covenants through the end of the next twelve months based upon (i) current conditions, (ii) the assumption that we will generate cash through vessel sales or alternative transactions and (iii) our expectations that our financial performance will stabilize or improve marginally in the near term.  Because we cannot necessarily control future conditions or asset sales, we cannot assure you that we are able to attain all of our financial covenants in future periods, but cannot assure you of this.  Our ability to attain our financial covenants after December 31, 2015 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 I of our Form 10-K for the year ended December 31, 2014.

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 dividend 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 I of our Form 10-K for the year ended December 31, 2014.

Pension Obligations

We contributed $150,000 to our pension plan during the three months ended March 31, 2015.  We expect to contribute an additional $450,000 before December 31, 2015.

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.

36

On January 7, 2015, 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, 2015, which was paid on January 30, 2015. Additionally, the Board of Directors declared a dividend of $0.25 per share of common stock to common stockholders of record as of February 19, 2015, which was paid on March 4, 2015.

On April 2, 2015, 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, 2015, which was paid on April 30, 2015. Additionally, on April 29, 2015, the Board of Directors declared a dividend of $0.05 per share of common stock to common stockholders of record as of May 15, 2015, payable on June 3, 2015.

If we do not pay our preferred stock dividends for two periods (whether consecutive or not), the per annum rate will increase by an additional 2.00% per $100.00 stated liquidation preference, or $2.00 per annum on and after the day following such second dividend payment date.

Holders of our equity securities have no contractual or other legal right to receive dividends.  See Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014.

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 treatment that could in the aggregate increase our operating costs.

Other Matters

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 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.

New Accounting Pronouncements

See Part I, Item 1, Financial Statements – Note 18 – New Accounting Pronouncements.

37

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 March 31, 2015 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 $227.9 million as of March 31, 2015.We pay variable interest on all of our long-term debt, except with respect to the debt we incurred in 2014 to finance the repurchase of our 2007 PCTC and our variable-to-fixed interest rate swap described below.  Accordingly, a hypothetical 10% increase in interest rates for the three months ending March 31, 2015 would have increased our interest expense by approximately $111,000 although it would not materially impact the fair value of our long-term debt.

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 March 31, 2015, we had one interest rate swap applicable to 11% 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. In the second quarter of 2015, we refinanced the Yen-based credit facility and settled the related interest rate swap.  See Note 11 – Derivative Instruments and Note 20 – Subsequent Event.

Commodity Price Risk

As of March 31, 2015, 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 2015. We estimate that a 20% increase in the average price of fuel for the period January 1, 2015 through March 31, 2015 would have resulted in an increase of approximately $208,000 in our fuel costs for the same period, and in a corresponding decrease of approximately $0.03 in our basic and diluted earnings per share based on the shares of our common stock outstanding for the three months ended March 31, 2015. 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 the redelivery of fuel under time charters and 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 2014. These contracts mature in December 2015. The fair value of these contracts at March 31, 2015 is a liability of approximately $4.3 million. A hypothetical 10% adverse change in exchange rates at March 31, 2015 would have increased this liability to an aggregate liability of approximately $4.8 million.  Included in this liability is a foreign contract related to the Yen-based credit facility of $4.2 million.  In the second quarter of 2015, we refinanced the Yen-based credit facility and settled the related foreign currency contracts.  See Note 11 – Derivative Instruments and Note20 – Subsequent Event.

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 March 31, 2015 in providing reasonable assurance that they have been timely alerted of material information required to be disclosed in this report.  During the firstquarter of 2015, 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. 

38

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 9 – Commitments and Contingencies.  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, 2014.

Item 1A – Risk Factors

For information regarding certain risks relating to our operations, any of which could negatively affect our business, financial condition, operating results or prospects, see Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014.

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.

We did not purchase any shares in the first quarter of 2015.  As of March 31, 2015, we had 285,377 shares available to be purchased under our 2008 repurchase plan.

Item 6 – Exhibits

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 dated July 28, 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).
10.1*	Ninth Amendment to the Credit Agreement, dated March 30, 2015, 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.
10.2*	Third Amendment to the Credit Agreement, dated April 7, 2015, to the Credit Agreement, dated as of August 25, 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.
10.3*	Fourth Amendment to Credit Agreement and Consent Agreement, dated as of April 14, 2015, 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.
10.4*	Fourth Amendment to the Credit Agreement, dated April 20, 2015, 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.
10.5*	Fourth Amendment to the Credit Agreement, dated April 20, 2015, 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.

39

10.6*	Third Amendment to the Credit Agreement, dated March 30, 2015, to the Credit Agreement, dated as of August 26, 2014, by and among LCI Shipholdings, Inc. (assigned to 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.
10.7*	Fourth Amendment to the Credit Agreement, dated April 20, 2015, to the Credit Agreement, dated as of August 26, 2014, by and among LCI Shipholdings, Inc. (assigned to 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.
10.8	International Shipholding Corporation 2015 Stock Incentive Plan (filed with the SEC on March 12, 2015 as Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A and incorporated by reference herein).
31.1*	Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
*filed with this report

SIGNATURE

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:   May 8, 2015

40

EX-10.1

Exhibit 10.1

AMENDMENT NO. 9

TO

FACILITY AGREEMENT PROVIDING FOR A

SENIOR SECURED TERM LOAN

OF ¥5,102,500,000

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

IN 1ERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

Dated as of March 30, 2015

AMENDMENT NO. 9 TO LOAN AGREEMENT

THIS AMENDMENT NO. 9 TO LOAN AGREEMENT (this "Amendment") is dated as of March 30, 2015, 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, as guarantor (the "Guarantor"), (3) DNB Capital LLC 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 Article 11 of the Facility Agreement, as defined below, the "Lenders" and each a "Lender"), and (4) DNB BANK ASA, NEW 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, Amendment No. 6 thereto dated as of August 26, 2014, Amendment No. 7 dated as of October 31, 2014 and Amendment No. 8 dated as of November 25, 2014 (the "Original Agreement" and as further amended hereby, the "Facility Agreement").

WITNESSETH THAT:

WHEREAS, the Guarantor has informed the Creditors that the Guarantor intends to incur up to Fifteen Million United States Dollars (US$15,000,000) of additional Indebtedness (the "Additional Domestic Debt") for general corporate purposes, either under an existing credit facility or by a new credit facility pursuant to which the Guarantor would be a borrower, a co-borrower or a guarantor of the Additional Domestic Debt;

WHEREAS, the Guarantor has informed the Creditors that the covenant contained in Sections 9.2(m) of the Original Agreement will, absent a waiver from the Lenders, be breached upon the incurrence of the Additional Domestic Debt by the Guarantor, as a borrower, a co-borrower or a guarantor; 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, 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.Waiver/Consent. 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 consent to the incurrence of the Additional Domestic Debt and waive any breach of Section 9.2(m) of the Facility Agreement solely in connection with the incurrence of Additional Domestic Debt. Solely, based upon information provided to us in that request letter dated March 11, 2015, 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.

6.The Secured Parties shall provide copies of the final documentation in respect of the Additional Domestic Debt.

7.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(c) of the Original Agreement is hereby amended and restated in its entirety as follows:

"(c) 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 Fifty-Four Million Eight Hundred Eighty Thousand Dollars ($254,880,000) plus fifty percent (50%) of all Consolidated Net Income of the Guarantor and the Subsidiaries earned after March 31, 2015

plus one hundred percent (100%) of the proceeds of all issuances of equity interests (common or preferred) of the Guarantor and the Subsidiaries (on a consolidated basis) received after March 31, 2015 (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);"; and

(c)Section 9.3(f) of the Original Agreement is hereby amended and restated in its entirety as follows:

"(f) Minimum Consolidated Fixed Charge Coverage Ratio. Maintain a Consolidated Fixed Charge Coverage Ratio of at least (i) 1.05:1.00, beginning with the fiscal quarter ending March 31, 2015 through the fiscal quarter ending December 31, 2015, (ii) 1.15:1.00, for the fiscal quarter ending March 31, 2016, (iii) 1.20:1.00, for the fiscal quarter ending June 30, 2016 and (iv) 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;".

8.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.

9.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; and

(b)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.

10.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.

11.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.

12.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.

13.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]

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: Vice President and Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

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/ Anders Platou

Name: Anders Platou

Title: Senior Vice President

DNB CAPITAL LLC,

as Lender

By: /s/ Cathleen Buckley

Name: Cathleen Buckley

Title: Senior Vice President

By: /s/ Anders Platou

Name: Anders Platou

Title: Senior Vice President

EX-10.2

Exhibit 10.2

THIRD AMENDMENT TO LOAN AGREEMENT

THIS THIRD AMENDMENT (this "Amendment"), dated as of April 7, 2015, to that certain LOAN AGREEMENT dated as of August 25, 2014 (as previously amended, the "Loan Agreement") 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 SH1PHOLDING 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 requested that Lender agree to amend the Minimum Fixed Charge Coverage Ratio required under in Section 6.10(e) of the Loan Agreement to not less than (A) 1.05:1.00 beginning with the Fiscal Quarter ending March 31, 2015 through the Fiscal Quarter ending December 31, 2015, (B) 1.15:1.00 for the Fiscal Quarter ending March 31, 2016, (C) 1.20:1.00 for the Fiscal Quarter ending June 30, 2016, and (D) 1.25:1.00 as of each Fiscal Quarter end thereafter; and

WHEREAS, Lender has agreed to amend the Minimum Fixed Charge Coverage Ratios for the designated accounting periods as requested, provided that Borrower and Guarantor execute an amendment to the Loan Agreement reflecting the changes to the ratios 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 amendment to the Loan Agreement is 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 6.10 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, (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, minus (B) the Specified Impairment Losses, plus (C) 50% of all Consolidated Net Income of Parent and its Subsidiaries, including Borrower, earned after December 31, 2011 (eliminating any effect on Consolidated Net Income in any applicable period as a result of the Specified Impairment Losses) plus (D) 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) 1.05:1.00 beginning with the Fiscal Quarter ending March 31, 2015 through the Fiscal Quarter ending December 31, 2015, (D) 1.15:1.00 for the Fiscal Quarter ending March 31, 2016, (E) 1.20:1.00 for the Fiscal Quarter ending June 30, 2016, and (F) 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, as previously amended, 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, as previously amended. Capitalized terms not otherwise defined herein that are defined in the Loan Agreement, as previously amended, 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, as previously amended, remain in full force and effect. The Loan Agreement, as previously amended, and as further amended by this Amendment, and all Loan Documents related thereto, 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 Third Amendment to Loan Agreement to be effective 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:

INTERNATIONAL SHIPHOLDING CORPORATION

By: /s/ David Drake

Name: David Drake

Title: Vice President and Treasurer

Lender:

CITIZENS ASSET FINANCE, INC.

(f/k/a RBS Asset Finance, Inc.)

By: /s/ Janet Melancon

Name: Janet Melancon

Title: Vice President

EX-10.3

Exhibit 10.3

FOURTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT AGREEMENT (the "Agreement") dated as of April 14, 2015 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 STEAMSHIP CORPORATION, a New York corporation ("Waterman"), COASTAL CARRIERS, INC., a Delaware corporation ("Coastal"), N.W. JOHNSEN & CO., INC., a New York corporation ("NWJ"), LMS SHIPMANAGEMENT, 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 MCDEVITT, 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") and collateral 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 Required Lenders amend the Credit Agreement and grant certain consents under 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. Notwithstanding Section 8.8 of the Credit Agreement, the Required Lenders hereby consent to non-compliance by the Borrowers with the minimum Consolidated Fixed Charge Coverage Ratio in Section 8.8(a)(v) of the Credit Agreement for the Fiscal Quarter ending March 31, 2015, and the non-compliance by the Borrowers with such financial covenant for such Fiscal Quarter shall not constitute an Event of Default under the Credit Agreement.

Except as expressly provided herein, the above consent shall not modify or affect the Loan Parties' obligations to comply fully with the terms of Sections 8.8 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 8.8 of the Credit Agreement or any other duty, term, condition or covenant contained in 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.

2.Amendments to Credit Agreement.

a.The following definition is hereby added to Section 1.1 of the Credit Agreement in appropriate alphabetical order: "Fourth Amendment Effective Date" shall mean April 14, 2015.

b.The definition of "Permitted Refinancing" in Section 1.1 of the Credit Agreement is hereby amended by inserting the following at the end thereof:

provided that, notwithstanding the foregoing, the refinancing of the Indebtedness of East Gulf Shipholding, Inc. to DNB Bank ASA and secured by the GLOVIS COUNTESS vessel, shall be deemed to be a "Permitted Refinancing" notwithstanding the failure to comply with clause (e) of this definition so long as (i) all other conditions to such Permitted Refinancing in this definition shall be satisfied with respect thereto, (ii) the aggregate principal amount of such Indebtedness after giving effect to such refinancing shall not exceed $32,000,000, and (iii) such refinancing shall be consummated on or prior to the last date of the Fiscal Quarter ending June 30, 2015.

c.Section 8.1 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (k) thereof; (ii) renumbering clause (1) as the new clause (m) thereof, and (iii) inserted a new clause (1) thereof as follows:

(1) Indebtedness incurred after the Fourth Amendment Effective Date but prior to June 30, 2015, in an aggregate amount not to exceed $15,000,000, to be used for general corporate purposes;

d.Section 8.2(k) of the Credit Agreement is hereby amended and restated in its entirety as follows:

(k) Liens on the BALI SEA vessel, the BANDA SEA vessel and/or (after the release thereof as Collateral in accordance with the Credit Agreement) the GREEN POINT vessel to secure Indebtedness permitted by Section 8.1(1), in each case, so long as such vessel is not a United States flagged vessel;

e.Section 8.5 of the Credit Agreement is hereby amended by replacing the reference to "Sections 8.1(b), 8.1(d), 8.1(h) and 8.1(i)" in clause (2) thereof and replacing it with a reference to "Sections 8.1(b), 8.1(d), 8.1(h), 8.1(i) and 8.1(l)".

3.Conditions Precedent. This Agreement shall be effective upon satisfaction of the following 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; and

b.the Administrative Agent shall have received payment of all fees due to the Lenders on the date hereof and 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 the Administrative 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 (i) 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 documents 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: Vice President and Treasurer

ENTERPRISE SHIP COMPANY, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

SULPHUR CARRIERS, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

C.G. RAILWAY, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

CENTRAL GULF LINES, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

WATERMAN STEAMSHIP CORPORATION

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

COASTAL CARRIERS, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

N.W. JOHNSON & CO., INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

LMS SHIPMANAGEMENT, INC.

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

U.S. UNITED OCEAN SERVICES, LLC

By: Coastal Carriers, Inc., its sole member

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

MARY ANN HUDSON, LLC

By: U.S. United Ocean Services, LLC, its sole member

By: Coastal Carriers, Inc., its sole member

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

SHEILA MCDEVITT, LLC

By: U.S. United Ocean Services, LLC, its sole member

By: Coastal Carriers, Inc., its sole member

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

TOWER, LLC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Authorized Representative

FRASCATI SHOPS, INC

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

ADMINISTRATIVE AGENT AND COLLATERAL AGENT:

REGIONS BANK, as Administrative Agent and Collateral Agent

By: /s/ Edward E. Midyett

Name: Edward E. Midyett

Title: Senior Vice President

LENDERS:

REGIONS BANK, as a Lender

By: /s/ Edward E. Midyett

Name: Edward E. Midyett

Title: Senior Vice President

CAPITAL ONE BANK, N.A., as a Lender

By: /s/ Kyle Fontanille

Name: Kyle Fontanille

Title: AVP

BRANCH BANKING AND TRUST COMPANY, as a Lender

By: /s/ Robert M. Searson

Name: Robert M. Searson

Title: Senior Vice President

WHITNEY BANK, as a Lender

By: /s/ Phillip E. Gordillo

Name: Phillip E. Gordillo

Title: Senior Vice President

EX-10.4

AMENDMENT NO. 4

TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF 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 April 20, 2015

AMENDMENT NO, 4 TO LOAN AGREEMENT

THIS AMENDMENT NO. 4 TO LOAN AGREEMENT (this "Amendment") is dated as of April [16], 2015, 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 a "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 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) 1NG BANK NY., London branch, as facility agent (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, Amendment No. 2 thereto dated as of November 4, 2014 and Amendment No. 3 thereto dated as of November 17, 2014 (the "Original Agreement" and as further amended hereby, the "Facility Agreement").

WITNESSETH THAT:

WHEREAS, the Guarantor has informed the Creditors that the Guarantor intends to incur up to Fifteen Million United States Dollars (US$15,000,000) of additional Indebtedness (the "Additional Domestic Debt") for general corporate purposes, either under an existing credit facility or by a new credit facility pursuant to which the Guarantor would be a borrower, a co-borrower or a guarantor of the Additional Domestic Debt;

WHEREAS, the Guarantor has informed the Creditors that the Guarantor intends to refinance that certain Yen denominated term loan facility made to the Guarantor's subsidiary, East Gulf Shipholding, Inc. ("EGS") and guaranteed by the Guarantor by incurring indebtedness up to the principal amount of US$32,000,000 (the "Additional EGS Debt");

WHEREAS, the Guarantor has informed the Creditors that the covenant contained in Sections 9.2(m) of the Original Agreement will, absent a waiver from the Lenders, be breached upon (i) the incurrence of the Additional Domestic Debt by the Guarantor, as a borrower, a co-borrower or a guarantor and (ii) the incurrence and the related guarantee of the Additional EGS Debt;

WHEREAS, pursuant to that certain Senior Secured Term Loan Facility

Agreement dated as of August 2, 2010, entered into by and among EGS, as borrower, the Guarantor, the banks and financial institutions listed on Schedule I thereto (the "EGS Lenders"),

as lenders, and the Agents, as amended, supplemented or otherwise modified from time to time, the EGS Lenders made available to EGS a loan in the original principal amount of US$55,200,000 (the "ING/EGS Facility");

WHEREAS, the Guarantor has informed the Creditors that it is the intent of the Guarantor to cross-collateralize the Facility and the ING/EGS Facility in order to provide additional credit support to each such credit facility by having all collateral provided under each such credit facility secure the obligations under the other credit facility on a pari passu basis in a manner satisfactory to the Lenders (such transaction, the "Cross-Collateralization Transaction"); 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, 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.Waiver/Consent. Subject to the Security Parties' continued compliance with the provisions contained herein and in the Facility Agreement, the Creditors hereby consent to

the incurrence of the Additional Domestic Debt and the guarantee of the Additional EGS Debt by the Guarantor and waive any breach of Section 9.2(m) of the Facility Agreement solely in connection with the incurrence of Additional Domestic Debt and the guarantee of the Additional EGS Debt by the Guarantor. Based upon information provided to us in that request letter dated March 11, 2015, 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.

6.Final Documentation. The Security Parties shall provide to the Facility Agent copies of the final documentation in respect of the Additional Domestic Debt and the Additional EGS Debt no later than July 31, 2015. In respect of the Additional Domestic Debt, the Security Parties shall provide to the Facility Agent (i) copies ofan executed termsheet and (ii)evidence of bank credit approvals which are subject only to documentation, in each case, no later than

June 30, 2015.

7.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)The following definitions shall be added to Section 1.1 of the Original Agreement in their respective alphabetical order:

'Cross Collateralization Transaction' shall mean the cross-collateralization of the Facility and the 1NG/EGS Facility in order to provide additional credit support to each such credit facility by having all collateral provided under each such credit facility secure the obligations under the other credit facility on a pari passu basis in a manner satisfactory to the Lenders;" and

"`ING/EGS Facility' shall mean that certain Senior Secured Term Loan Facility Agreement dated as of August 2, 2010, entered into by and among East Gulf Shipholding, Inc., as borrower, the Guarantor, as guarantor, the banks and fmancial institutions listed on Schedule I thereto, as lenders, and the Agents, as amended, supplemented or otherwise modified from time to time, pursuant to which the lenders thereto made available to East

Gulf Shipholding, Inc. a loan in the original principal amount of US$55,200,000;";

(c)The definition of "Required Percentage" in Section 1.1 shall be deleted in its entirety and replaced with the following:

"'Required Percentage' shall mean (i) one hundred thirty five percent (135%) from the Closing Date until June 20, 2013, (ii) one hundred forty percent (140%) from June 21, 2013 until June 20, 2014, (iii) one hundred forty five percent (145%) from June 21, 2014 through March 31, 2015, (iv) one hundred twenty five percent (125%) from April 1, 2015 through September 30, 2015, (iv) one hundred thirty percent (130%) from October 1, 2015 through March 31, 2016, (v) one hundred fifty percent (150%) from April 1, 2016 through June 20, 2017, and (vi) one hundred fifty five (155%) at all times thereafter;

(d)A new Section 8.1(q) is hereby inserted into the Original Agreement as follows:

"(q) Cross-Collateralization Transaction. The Cross-Collateralization Transaction has not been consummated in a manner and on terms and conditions satisfactory to the Lenders within 45 days after the date of "Amendment No. 4 to this Agreement"; and

(e)Section 9.3(a) of the Original Agreement is hereby amended and restated in its entirety as follows:

"(a) Consolidated Indebtedness to Consolidated EBITDAR Ratio. Maintain, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than (i) 4.50 to 1.00 through the fiscal quarter ending June 30, 2015, (ii) 5.00 to 1.00 through the fiscal quarter ending December 31, 2015, (iii) 4.50 to 1.00 through the fiscal quarter ending March 31, 2016, and (iv) 4.25 to 1.00 at all times thereafter,

provided that, in the event that one, but not both, of the Vessels under and as defined in the ING/EGS Facility is sold to a person or entity that is not a Subsidiary of the Guarantor, the Guarantor shall maintain after such sale,

on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than (i) 4.50 to 1.00 through the fiscal quarter ending June 30, 2015, (ii) 4.75 to 1.00 through the fiscal quarter ending December 31, 2015, (iii) 4.50 to 1.00 through the fiscal quarter ending March 31, 2016 and (iv) 4.25 to 1.00 at all times thereafter;

provided further, that in the event that both Vessels under and as defined in the ING/EGS Facility are sold to a person or entity that is not a Subsidiary of the Guarantor, the Guarantor shall maintain after such sale, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than 4.50 to 1.00 through the fiscal quarter ending March 31, 2016 and 4.25 to 1.00 at all times thereafter; provided still further, that in the event that both vessels under and as defined in the ING/EGS Facility are sold to a person or entity that is not a Subsidiary of the Guarantor and any other vessel owned by any Subsidiary of the Guarantor is sold to a person or entity that is not a Subsidiary of the Guarantor, and the ratio of Consolidated Indebtedness to Consolidated EBITDAR is equal to or less than 4.10 to 1.00, the Guarantor shall maintain, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than 4.25 to 1.00 at all times thereafter,

in each case, as 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.".

8.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.

9.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 dulyexecuted and delivered this Amendment to the Facility Agent;

(b)Corporate Authority. The Facility Agent shall have received the followingdocuments 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 attorney-in-fact or attorneys-in-fact to execute the same on its behalf;

ii.certificate of the jurisdiction of incorporation of each Security Party as to good standing thereof, and

iii.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, (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 and (C) the copies of its certificate or articles of incorporation and by-laws or similar constituent documents thereof attached to its Certificate delivered in connection with its entering into Amendment No. 1 to the Facility Agreement have not been amended or rescinded and remain in full force and effect as of the day hereof.

(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 receivedpayment in full of all interest, fees and expenses (including reasonable legal fees) due under or in connection to the Original Agreement and this Amendment, including but not limited to a fee in the amount of 0.1% of the outstanding principal balance under the Facility, equal to US$26,246.00, payable to the Agent for distribution to the Lenders.

10.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.

11.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 Stateof New York.

12.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.

13.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]

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by duly authorized representative on the day and year first above written.

DRY BULK AMREICAS LTD.,

AS BORROWER

BY:/s/D.B.  DRAKE

NAME: D.B.DRAKE

TITLE: ATTORNEY IN FACT

DRY BULK AUSTRLIA LTD.,

AS BORROWER

BY:/s/ D.B. DRAKE

NAME: D.B.DRAKE

TITLE: ATTORNEY IN FACT

INTERNATIONAL SHIPHOLDING CORPORATION

AS GUARANTOR

BY:/s/ D.B. DRAKE

NAME: D.B. DRAKE

TITLE: VICE PRESIDENT AND TREASURER

ING BANK N. V., LONDON BRANCH

AS Facility Agent, Security Trustee and Lender

BY: /s/ A. BYRNE

NAME: ADAM BYRNE

TITLE: MANAGING DIRECTOR

BY: /s/ RORY HUSSEY

NAME: RORY HUSSEY

TITLE: MANAGEING DIRECTOR

EX-10.5

Exhibit 10.5

AMENDMENT NO. 4

TO

FACILITY AGREEMENT PROVIDING FOR A

SENIOR SECURED TERM LOAN

OF 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 April 20, 2015

AMENDMENT NO. 4 TO LOAN AGREEMENT

THIS AMENDMENT NO. 4 TO LOAN AGREEMENT (this "Amendment") is dated as of April [16], 2015, 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, as guarantor (the "Guarantor"), (3) the 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) ING BANK N.V., London branch, 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 Term 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, Amendment No. 2 thereto dated as of November 4, 2014 and Amendment No. 3 thereto dated as of November 17, 2014 (the "Original Agreement" and as further amended hereby, the "Facility Agreement").

WITNESSETH THAT:

WHEREAS, the Guarantor has informed the Creditors that the Guarantor intends to incur up to Fifteen Million United States Dollars (US$15,000,000) of additional Indebtedness (the "Additional Domestic Debt") for general corporate purposes, either under an existing credit facility or by a new credit facility pursuant to which the Guarantor would be a borrower, a co-borrower or a guarantor of the Additional Domestic Debt;

WHEREAS, the Guarantor has informed the Creditors that the Guarantor intends to refinance that certain Yen denominated term loan facility made to the Borrower, and guaranteed by the Guarantor by incurring indebtedness up to the principal amount of US$32,000,000 (the "Additional EGS Debt");

WHEREAS, the Guarantor has informed the Creditors that the covenant contained in Sections 9.2(m) of the Original Agreement will, absent a waiver from the Lenders, be breached upon (i) the incurrence of the Additional Domestic Debt by the Guarantor, as a borrower, a co-borrower or a guarantor and (ii) the incurrence and the related guarantee of the Additional EGS Debt;

WHEREAS, pursuant to that certain Senior Secured Term Loan Facility Agreement dated as of June 20, 2011, entered into by and among Dry Bulk Americas Ltd. and Dry Bulk Australia Ltd., each a corporation organized and existing under the laws of the British Virgin Islands, as joint and several borrowers (the "Dry Bulk Borrowers"), the Guarantor, the banks and financial institutions listed on Schedule I thereto (the “Dry Bulk Lenders"), as lenders, and the Agents, as amended, supplemented or otherwise modified from time to time, the Dry Bulk Lenders made available to the Dry Bulk Borrowers a loan in the original principal amount of US$47,500,000 (the ING/Dry Bulk Facility");

WHEREAS, the Guarantor has informed the Creditors that it is the intent of the Guarantor to cross-collateralize the Facility and the ING/Dry Bulk Facility in order to provide additional credit support to each such credit facility by having all collateral provided under each such credit facility secure the obligations under the other credit facility on a pari passu basis in a manner satisfactory to the Lenders (such transaction, the "Cross-Collateralization Transaction"); 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, 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.Waiver/Consent. Subject to the Security Parties' continued compliance with the provisions contained herein and in the Facility Agreement, the Creditors hereby consent to the incurrence of the Additional Domestic Debt and the guarantee of the Additional EGS Debt by the Guarantor and waive any breach of Section 9.2(m) of the Facility Agreement solely in connection with the incurrence of Additional Domestic Debt and the guarantee of the Additional EGS Debt by the Guarantor. Based upon information provided to us in that request letter dated March 11, 2015, 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.

6.Final Documentation. The Security Parties shall provide to the Facility Agent copies of the final documentation in respect of the Additional Domestic Debt and the Additional EGS Debt no later than July 31, 2015. In respect of the Additional Domestic Debt, the Security Parties shall provide to the Facility Agent (i) copies of an executed term sheet and (ii) evidence of bank credit approvals which are subject only to documentation, in each case, no later than June 30, 2015.

7.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)The following definitions shall be added to Section 1.1 of the Original Agreement in their respective alphabetical order:

'Cross Collateralization Transaction' shall mean the cross-collateralization of the Facility and the ING/Dry Bulk Facility in order to provide additional credit support to each such credit facility by having all collateral provided under each such credit facility secure the obligations under the other credit facility on a pari passu basis in a manner satisfactory to the Lenders;" and

"`ING/Dry Bulk Facility' shall mean that certain Senior Secured Term Loan Facility Agreement dated as of June 20, 2011, entered into by and among Dry Bulk Americas Ltd. and Dry Bulk Australia Ltd., as joint and several borrowers, the Guarantor, as guarantor, the banks and financial institutions listed on Schedule I thereto, as lenders, and the Agents, as amended, supplemented or otherwise modified from time to time, pursuant to which the lenders thereto made available to Dry Bulk Americas Ltd. and Dry Bulk Australia Ltd., as borrowers, a loan in the original principal amount of US$47,500,000;

(c)The definition of "Required Percentage" in Section 1.1 shall be deleted in its entirety and replaced with the following:

"'Required Percentage' shall mean (i) one hundred thirty five percent (135%) from the first Delivery Date until the second anniversary of the Initial Advance, (ii) one hundred forty percent (140%) from the second anniversary of the Initial Advance until the third anniversary thereof, (iii) one hundred forty five percent (145%) from the third anniversary of the Initial Advance until the fourth anniversary thereof, (iv) one hundred fifty percent (150%) from the fourth anniversary of the Initial Advance until the sixth anniversary thereof, and (v) one hundred fifty five percent (155%) from the sixth anniversary of the Initial Advance and thereafter; provided, that notwithstanding the foregoing, the Required Percentage shall be (x) one hundred twenty five percent (125%) from April 1, 2015 through September 30, 2015 and (y) one hundred thirty percent (130%) from October 1, 2015 through March 31, 2016;"

(d)A new Section 8.1(p) is hereby inserted into the Original Agreement as follows:

"(p) Cross-Collateralization Transaction. The Cross-Collateralization Transaction has not been consummated in a manner and on terms and conditions satisfactory to the Lenders within 45 days after the date of Amendment No. 4 to this Agreement"; and

(e)Section 9.3(a) of the Original Agreement is hereby amended and restated in its entirety as follows:

"(a) Consolidated Indebtedness to Consolidated EBITDAR Ratio. Maintain, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than (i) 4.50 to 1.00 through the fiscal quarter ending June 30, 2015, (ii) 5.00 to 1.00 through the fiscal quarter ending December 31, 2015, (iii) 4.50 to 1.00 through the fiscal quarter ending March 31, 2016, and (iv) 4.25 to 1.00 at all times thereafter, provided that, in the event that one, but not both, of the Vessels under and as defined in this Facility is sold to a person or entity that is not a Subsidiary of the Guarantor, the Guarantor shall maintain after such sale, on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDAR of not more than (i) 4.50 to 1.00 through the fiscal quarter ending June 30, 2015, (ii) 4.75 to 1.00 through the fiscal quarter ending December 31, 2015, (iii) 4.50 to 1.00 through the fiscal quarter ending March 31, 2016 and (iv) 4.25 to 1.00 at all times thereafter; in each case, as 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."

8.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

9.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;

ii.certificate of the jurisdiction of incorporation of each Security Party as to the good standing thereof; and

iii.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, (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 and (C) the copies of its certificate or articles of incorporation and by-laws or similar constituent documents thereof attached to its Certificate delivered in connection with its entering into Amendment No. 1 to the Facility Agreement have not been amended or rescinded and remain in full force and effect as of the day hereof.

(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 (including reasonable legal fees) due under or in connection to the Original Agreement and this Amendment, including but not limited to a fee in the amount of 0.1% of the outstanding principal balance under the Facility, equal to US$26,680.00, payable to the Agent for distribution to the Lenders.

10.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.

11.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.

12.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.

13. 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]

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: Vice President and Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and 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/ Rory Hussey

Name: Rory Hussey

Title: Managing Director

EX-10.6

Exhibit 10.6

AMENDMENT NO. 3
TO

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF $38,500,000

dated August 26, 2014,

LCI SHIPHOLDINGS, INC.
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 March 30, 2015

AMENDMENT NO. 3 TO LOAN AGREEMENT

THIS AMENDMENT NO. 3 TO LOAN AGREEMENT (this "Amendment") is dated as of March 30, 2015, by and among (1) LCI SHIPHOLDINGS, 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, 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 arid is supplemental to the Senior Secured Facility Agreement dated as of August 26, 2014 as amended by an Amendment No, 1 dated as of October 28, 2014, an Amendment No. 2 dated as of November 24, 2014 and an Assignment and Assumption Agreement dated as of December 29, 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 has informed the Creditors that the Guarantor intends to incur up to Fifteen Million United States Dollars (US$15,000,000) of additional Indebtedness (the “Additional Domestic Debt”) for general corporate purposes, either under an existing credit facility or by a new credit facility pursuant to which the Guarantor would be a borrower, a co-borrower or a guarantor of the Additional Domestic Debt;

WHEREAS, the Guarantor has informed the Creditors that the covenant contained in Section 9.2(m) of the Original Agreement will, absent a waiver from the Lenders, be breached upon the incurrence of the Additional Domestic Debt by the Guarantor, as a borrower, a co-borrower or a guarantor;

WHEREAS, the Guarantor has informed the Creditors that it expects to breach the covenant set forth in Section 9.3(e) with respect to the Consolidated Tangible Net Worth in its current form; 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 rnutandis) and that the copies of its resolutions, Certificate of Incorporation and By-laws or similar constituent documents thereof attached to its Officer’s Certificate delivered in connection with, inter alia, Its entering Into the Original Agreement have not been amended or rescinded and remain in full force and effect as of the date hereof.

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.Waiver/Consent. Subject to the Security Parties’ continued compliance with the provisions contained herein and in the Facility Agreement, the Creditors hereby consent to the incurrence of the Additional Domestic Debt and waive any breach of Section 9.2(m) of the Facility Agreement solely in connection with the Incurrence of Additional Domestic Debt. Solely based upon information provided to us in that request letter dated March 11, 2015, 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.

6.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)Section 9.3(e) of the Original Agreement is hereby amended and restated in its entirety as follows:

“(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 Fifty-Four Million Eight Hundred Eighty Thousand Dollars ($254,880,000) plus fifty percent (50%) of all Consolidated Net Income of the Guarantor and the Subsidiaries earned after March 31, 2015 Is  one hundred percent (100%) of the proceeds of all issuances of equity interests (common or preferred) of the Guarantor arid the Subsidiaries (on a consolidated basis) received after March 31, 2015 (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);”.

7.No Other Amendment. All other terms and conditions of the Original Agreement shallremain 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.

8.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) 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.

9.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.

10.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,

11.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.

12.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]

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.

LCI SHIPHOLDINGS, INC.

as Borrower

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION

as Guarantor

By: /s/ D.B. Drake

Name: D.B. Drake

Title: Vice President and Treasurer

DVB BANK SE

as Facility Agent, Security Trustee and Lender

By: /s/ Felix Ulbricht

Name: Felix Ulbricht

Title: Managing Director

By: /s/ Thibaud Ollivier

Name: Thibaud Ollivier

Title: Senior Vice President

EX-10.7

Exhibit 10.7

AMENDMENT NO. 4

TO

CREDIT AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF $38,500,000

Dated August 26, 2014,

LCI SHIPHOLDINGS, INC.
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 April 20, 2015

AMENDMENT NO. 4 TO CREDIT AGREEMENT

THIS AMENDMENT NO. 4 TO CREDIT AGREEMENT (this "Amendment") is dated as of April 20, 2015, by and among (1) LCI SHIPHOLDINGS, INC., a corporation 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, 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 Term Loan Credit Agreement dated as of August 26, 2014, by and among Waterman Steamship Corporation, as original borrower ("Waterman Steamship"), the Guarantor, the Lenders and the Agents, as amended by an Amendment No. 1 dated as of October 28, 2014, by and among Waterman Steamship, the Guarantor, the Lenders and the Agents, an Amendment No. 2 dated as of November 24, 2014, by and among Waterman Steamship, the Guarantor, the Lenders and the Agents, an Omnibus Assignment and Assumption Agreement dated as of December 29, 2014, by and among Waterman Steamship, as assignor, the Borrower, as assignee, the Guarantor, the Lenders and the Agents, pursuant to which the Borrower became the borrower under said Senior Secured Term Loan Credit Agreement, and an Amendment No. 3 dated as of March 30, 2015 entered into by and among the Borrower, the Guarantor, the Lenders and the Agents (collectively, the "Original  Agreement").

WITNESSETH THAT:

WHEREAS, the Security Parties and the Creditors have agreed, inter alia, to amend the Original Agreement, whereby the Original Agreement (other than the Exhibits and the Schedules) shall with effect from the date hereof be replaced in its entirety by that certain Senior Secured Term Loan Credit Agreement attached hereto as Exhibit A (the "Facility Agreement").

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) and that the copies of its resolutions, Certificate of Incorporation and By-laws or similar constituent documents thereof attached to its Officer's Certificate delivered in connection with, inter alia, its entering into the Original Agreement have not been amended or rescinded and remain in full force and effect as of the date hereof.

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,

a) The Original Agreement (other than the Exhibits and the Schedules) is hereby amended in its entirety to read as set forth in the Facility Agreement.

b) Exhibit G-1 to the Facility Agreement is hereby deleted in its entirety;

c) a new Exhibit G-3 (GLOVISS COUNTESS Mortgage) is hereby added to the Facility Agreement in the form as attached hereto as Exhibit B; and

d) a new Exhibit N (Pari Passu Intercreditor Agreement) is hereby added to the Facility Agreement in the form as attached hereto as Exhibit C

6. 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) 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 Facility Agreement.

c) GLOVIS COUNTESS Credit Facility. The GLOVIS COUNTESS Credit Facility (as defined in the Facility Agreement) shall have become effective.

d) Legal Opinions. The Facility Agent shall have received such legal opinions as it shall reasonably require.

7. 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 Transaction Documents to the Original Agreement shall be deemed to refer to the Original Agreement as amended hereby. 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 have 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.

8. 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.

9. 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.

10. 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]

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,

LCI SHIPHOLDINGS, INC.,

as Borrower

By /s/ D.B. Drake

Name: David B. Drake

Title: Vice President and Treasurer

INTERNATIONAL SHIPHOLDING CORPORATION,

as Guarantor

By /s/ D.B. Drake

Name: David B. Drake

Title: Vice President and Treasurer

DVB BANK SE,

as Facility Agent, Security Trustee and Lender

By: /s/ Thibaud Ollivier

Name: Thibuad Ollivier

Title: Senior Vice President

By: /s/ Kartal Cona

Name: Kartal Cona

Title: Vice President

EXHIBIT A

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

TABLE OF CONTENTS

1	DEFINITIONS
	1.1	Specific Definitions	1
	1.2	Computation of Time Periods; Other Definitional Provisions	20
	1.3	Accounting Terms	20
	1.4	Certain Matters Regarding Materiality	20
2	REPRESENTATIONS AND WARRANTIES		20
	2.1	Representations and Warranties	20
3	THE FACILITY		24
	3.1	Purposes	24
	3.2	Receipt of Funds	25
	3.3	Drawdown Notice	25
	3.4	Effect of Drawdown Notice	25
4	CONDITIONS PRECEDENT		25
	4.1	Conditions Precedent to this Agreement	25
	4.2	Breakfunding Costs	30
	4.3	Satisfaction after Drawdown	30
5	REPAYMENT AND PREPAYMENT		30
	5.1	Repayment	30
	5.2	Voluntary Prepayment; No Re-borrowing	30
	5.3	Mandatory Prepayment	30
	5.4	Interest and Costs with Prepayments/Application of Prepayments	30
	5.5	Borrower’s Obligation Absolute	30
6	INTEREST AND RATE		31
	6.1	Payment of Interest; Interest Rate	31
	6.2	Maximum Interest	31
7	PAYMENTS		31
	7.1	Time and Place of Payments, No Set Off	31
	7.2	Taxes	31
	7.3	Sharing of Setoffs	32
	7.4	Computations; Banking Days	33
8	EVENTS OF DEFAULT		33
	8.1	Events of Default	33
	8.2	Application of Moneys	36
9	COVENANTS		36
	9.1	Affirmative Covenants	36

TABLE OF CONTENTS

(continued)

	9.2	Negative Covenants	42
	9.3	Financial Covenants	45
	9.4	Asset Maintenance	46
	9.5	Borrower Restructuring	46
10	ACCOUNTS		48
	10.1	General	48
	10.2	Payment of Earnings	48
	10.3	Monthly Retentions	48
	10.4	Debt Service Letter of Credit.	49
	10.5	Shortfall in Earnings	49
	10.6	Transfers from Retention Account; Application of Retentions	49
	10.7	Location of Accounts	50
	10.8	Debits for Expenses	50
	10.9	Borrower's Obligations Unaffected	50
11	GUARANTEE		50
	11.1	The Guarantee	50
	11.2	Obligations Unconditional	51
	11.3	Reinstatement	51
	11.4	Subrogation	51
	11.5	Remedies	52
	11.6	Joint, Several and Solidary Liability	52
	11.7	Continuing Guarantee	52
12	ASSIGNMENT		52
	12.1	Generally	52
	12.2	Assignment by Security Parties	52
	12.3	Assignment by Lender	55
13	ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.		56
	13.1	Illegality	56
	13.2	Increased Costs	56
	13.3	Lender's Certificate Conclusive	57
	13.4	Compensation for Losses	57
14	CURRENCY INDEMNITY		57
	14.1	Currency Conversion	57
	14.2	Change in Exchange Rate	57
	14.3	Additional Debt Due	57
	14.4	Rate of Exchange	58

TABLE OF CONTENTS

(continued)

15	FEES AND EXPENSES		58
	15.1	Fees	58
	15.2	Expenses	58
16	APPLICABLE LAW, JURISDICTION AND WAIVER		58
	16.1	Applicable Law	58
	16.2	Jurisdiction	58
	16.3	Waiver of Immunity	58
	16.4	Waiver of Jury Trial	59
17	THE AGENTS		59
	17.1	Appointment of Facility Agent	59
	17.2	Appointment of Security Trustee	59
	17.3	Distribution of Payments	59
	17.4	Holder of Interest in Note	60
	17.5	No Duty to Examine, Etc	60
	17.6	Agents as Lenders	60
	17.7	Acts of the Agent	60
	17.8	Certain Amendments	60
	17.9	Assumption regarding Event of Default	61
	17.10	Limitations of Liability	61
	17.11	Indemnification of the Facility Agent and Security Trustee	61
	17.12	Consultation with Counsel	62
	17.13	Resignation	62
	17.14	Representations of Lenders	62
	17.15	Notification of Event of Default	62
	17.16	Reversal of Redistribution	62
	17.17	Parallel Debt	62
18	NOTICES AND DEMANDS		63
	18.1	Notices	63
19	MISCELLANEOUS		64
	19.1	Right of Set-off	64
	19.2	Time of Essence	64
	19.3	Unenforceable, etc., Provisions - Effect	65
	19.4	References	65
	19.5	Further Assurances	65
	19.6	Prior Agreements, Merger	65
	19.7	Entire Agreement; Amendments	65
	19.8	Indemnification	65

TABLE OF CONTENTS

(continued)

19.9	USA PATRIOT Act Notice; OFAC and Bank Secrecy Act	66
19.10	Remedies Cumulative and Not Exclusive; No Waiver	66
19.11	Counterparts; Electronic Delivery	66
19.12	Headings	67
19.13	Disclosure	67
19.14	Pari Passu Intercreditor Agreement	67

TABLE OF CONTENTS

(continued)

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 Charterparties Assignment
F	Form of Insurances Assignment
G-1	[Intentionally Omitted]
G-2	Form of Marshall Islands First Priority Continuation Mortgage
G-3	Form of GLOVIS COUNTESS Mortgage
H-1	Classification Society Instruction Letter
H-2	Classification Society Undertaking
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
N	Form of Pari Passu Intercreditor Agreement

SENIOR SECURED TERM LOAN CREDIT AGREEMENT

THIS SENIOR SECURED TERM LOAN CREDIT AGREEMENT (this "Agreement") is made as of the 26th day of August, 2014, by and among (1) WATERMAN STEAMSHIP CORPORATION, a corporation incorporated 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 such 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 Bank”	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 4.1(s)(iii) substantially in the form set out in Exhibit 1-1 or 1-2;
“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 who directly or indirectly controls, is 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 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;
“Applicable Rate”	shall mean the rate of interest applicable to the Facility per annum, which is equal to 250 basis points (the margin) plus 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;
“Approves 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 certifying 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 (i) in relation to the Vessel, the Earnings and Charterparties Assignment and the Insurances Assignment or (ii) in relation to the GLOVIS COUNTESS, the GLOVIS COUNTESS Assignments;
“Assignment and Assumption Agreements”	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) in relation to the Vessel, (a) the notice with respect to the Earnings and Charterparties 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 Exhibit 3 thereto or (B) in relation to the GLOVIS COUNTESS, (a) the notice with respect to the GLOVIS COUNTESS Earnings and Charterparties Assignment substantially in the form set out in Exhibit 1 thereto, and (b) the notice with respect to the GLOVIS COUNTESS Insurances Assignment substantially in the form set out in Exhibit 3 thereto;

2

“Assignments”	shall mean the Earnings and Charterparties 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;
“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, or 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;
“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 Person 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, (ii) upon the Vessel Transfer pursuant to Section 12.2(b), the Ultimate Borrower or (iii) upon the Second Vessel Transfer, the EGS 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;

3

“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;
“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 I3d-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;

4

“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 periodic 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;
“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 any Transaction Document;
“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;

5

“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; (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 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, further, that, for the period of four fiscal quarters commencing with the quarter ending September 30, 2014 and ending with the quarter ending June 30, 2015, all non-cash gains and/or losses from dispositions of any assets allowed under the Regions Credit Agreement or consented to by the Required Lenders thereunder shall be excluded in the calculation of Consolidated EBITDA; 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;
“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 50% of consolidated depreciation expense

“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

6

“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) determined 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 Leverage Ratio”	shall mean, as of any date of determination, the ratio of (a) Consolidated Lease Adjusted Indebtedness as of such date to (b) Consolidated EBITDAR for the period consisting 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 9.1(d).
“Consolidated Tangible Net Worth”	shall mean, with respect to the Guarantor and its Subsidiaries, at any date for which a determination is to be made (determined on a consolidated basis without duplication in accordance with GAAP) (a) total stockholders' equity minus (b) goodwill;
“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;
“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 rate per annum equal to two percent(2%) over the Applicable Rate;

7

"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;
“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 or (ii) upon the Vessel Transfer or the Second Vessel Transfer, the bank account no. 2910053652 maintained in the name of the Ultimate Borrower or the EGS Borrower, as applicable, and in each case, with the Account Bank

8

"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 4.1(s)(i), substantially in the form set out in Exhibit E;
"EGS Borrower"	shall mean East Gulf Shipholding, Inc., a Marshall Islands corporation;
"EGS Borrower Restructuring"	shall mean, collectively, the transactions contemplated by Section 9.5 hereof and Section 9.5 of the GLOVIS COUNTESS Credit Facility;
"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 414(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;
"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;

9

“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 ERISA or the treatment of a Multiemployer Plan amendment as a termination under Section 4041A of ERISA; (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 ERISA Affiliate of any liability under Title IV of ERISA 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 ERISA 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;
"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 S7,500 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;

10

"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., Hesnes Shipping AS, 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;
"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;
"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;

11

“GAAP”	shall have the meaning ascribed thereto in Section 1.3;
“GLOVIS COUNTESS”	shall mean that certain pure car truck carrier GLOVIS COUNTESS with IMO No. 9476721;
“GLOVIS COUNTESS Assignments”	shall mean the GLOVIS COUNTESS Earnings and Charterparties Assignment and the GLOVIS COUNTESS Insurances Assignment;
“GLOVIS COUNTESS Credit Facility”	shall mean the credit facility contemplated by that certain credit agreement providing for a senior secured term loan of up to $32,000,000, dated April 10, 2015, between East Gulf Shipholding, Inc., as borrower, International Shipholding Corporation, as guarantor, and DVB Bank SE, as facility agent and security trustee and as lender, as amended, amended and restated, supplemented or otherwise modified from time to time;
“GREEN BAY-$32M Credit Facility Mortgage”	shall mean the "GREEN BAY Mortgage" as defined in the GLOVIS COUNTESS Credit Facility;
“GLOVIS COUNTESS-$32M Credit Facility Mortgage”	shall mean the "Mortgage" as defined in the GLOVIS COUNTESS Credit Facility;
“GLOVIS COUNTESS Earnings and Charterparties Assignment”	shall mean the assignment of Earnings, charterparties and requisition compensation in respect of (i) the Earnings of the GLOVIS COUNTESS from any and all sources (including requisition compensation) and (ii) any charter or other contract relating to the GLOVIS COUNTESS, substantially in the form set out in Exhibit E;
“GLOVIS COUNTESS Insurances Assignment”	shall mean the assignment in respect of the insurances over the GLOVIS COUNTESS, substantially in the form set out in Exhibit F;
“GLOVIS COUNTESS Mortgage”	shall mean the preferred Marshall Islands mortgage over the GLOVIS COUNTESS, securing the Facility, substantially in the form attached hereto as Exhibit G-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;

12

"Indemnitee"	shall have the meaning ascribed thereto in Section 19.8;
"ING Credit Agreement"	shall mean the facility agreement, dated as of August 2, 2010, providing for a senior secured term loan of up to $55,200,000 between the EGS Borrower, as borrower, and ING Bank N.V., as facility agent and security trustee and lender, as such agreement is amended, amended and restated, supplemented or otherwise modified from time to time;
"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;
"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 4.1(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;

13

“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;
"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;

14

"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 12.2(b) or the Second Vessel Transfer pursuant to Section 12.2(c), the MI Continuation Mortgage (or an assignment) executed in connection therewith;
"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 ERISA) to which any Security Party, any of their respective Subsidiaries or any ERISA 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 Borrower to the order of the Facility Agent pursuant to Section 4.1(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;
"Other EGS Vessels"	shall mean (i) the 23,054 gross registered tons and 11,349 net registered tons currently named "EGS CREST", IMO Number 9576727 and (ii) the 23,054 gross registered tons and ,349 net registered tons currently named "EGS WAVE", IMO Number 9576741;

15

"Parallel Debt"	shall have the meaning ascribed to it in Section 17.17(a);
"Pari Passu Intercreditor Agreement"	shall mean the intercreditor agreement substantially in the form set out in Exhibit N;
"PATRIOT Act"	shall have the meaning ascribed to it in Section 19.9;
"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 Borrower 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 novated from time to time;
“Proceeding”	shall have the meaning ascribed thereto in Section 8.1(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 such agreement is amended, amended and restated, supplemented or otherwise modified from time to time;

16

“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%);
“Retention Account”	shall mean (i) prior to the Vessel Transfer, the bank account no. 2910053687 maintained in the name of the Initial Borrower, (ii) upon the Vessel Transfer or the Second Vessel Transfer, the bank account no. 2910053660 maintained in the name of the Ultimate Borrower or the EGS Borrower, as applicable, and in each case, with the Account Bank;
“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 forma 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;

17

“Second Vessel Transfer”	shall mean the transfer of the ownership of the Vessel by LC1 Shipholdings to the EGS Borrower;
“Security Document(s)”	shall mean the Mortgage, the GLOVIS COUNTESS Mortgage, the Assignments, the GLOV1S COUNTESS Assignments, the Account Pledges, the Pari Passu lntercreditor Agreement, the Debt Service Letter of Credit and any other documents that may be executed as security for the Facility and the Borrower's obligations in connection therewith or to establish any form of subordination or priorities arrangement in relation 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;
“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 Contract”	shall mean (a) 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 transaction, 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 (b) 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 (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement;

18

“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 Facility) 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;
“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;
“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.

19

1.2Computation of Time Periods; Other Definitional Provisions. In this Agreement, the Note

and the other Transaction Documents, 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 Transaction Document, as applicable; references to agreements and other contractual instruments (including this Agreement, the Note and the Transaction 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 Transaction 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 Transaction 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 Reporting 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 Transaction Documents to which it is a party, and is in compliance with all statutory, regulatory and other requirements relative to such business and such 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 Transaction 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;

20

(c) Binding Obligations. This Agreement, the Note and the Transaction Documents 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 the other Transaction 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 4.1(dd), the Regions Credit Agreement and the ING 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 3.1(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 and the Second 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 or the Transaction Documents 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 or any of the Transaction Documents;

(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 or the Second Vessel Transfer, under the Marshall Islands flag, unencumbered, save and except for the Mortgage (and upon the consummation of the EGS Borrower Restructuring, the GREEN BAY-$32M Credit Facility 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;

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 suchrisks and in such amounts as are customary for companies engaged in similar businesses;

21

(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;

(l)ERISA. The execution and delivery of this Agreement and the consummation of the

transactions hereunder will not involve any "prohibited transaction" for purposes of ERISA 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 ERISA Affiliate resulting from the failure of any thereof to comply with ERISA which is reasonably likely to result in any Security Party, any of their respective subsidiaries or any ERISA Affiliate incurring any liability, fine or penalty which individually or in the aggregate could have a Material Adverse Effect. No ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding Event exists or has occurred, or is reasonably expected to exist or occur, that, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfunding Events 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 ERISA Affiliates in the aggregate in excess of $1,000,000;

(m) Chief Executive Office. The chief executive office 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 until such time as each Security Party relocates its offices to New Orleans, Louisiana with prior written notice to the Facility Agent, which is anticipated to occur in the first half of 2016;

(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, orlend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

(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 nowknowingly engaged in, and will not knowingly engage in, any dealings ortransactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of the 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 2.1(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, property damages, personal 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

23

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, 1SPS 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 other Transaction 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 and the other Transaction Documents 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;

(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) GLOVIS COUNTESS Credit Facility. All of the representations and warranties contained in Section 2 of the GLOVIS COUNTESS Credit Facility are true and correct; and

(aa)Survival. All representations, covenants and warranties made herein and in any certificate orother document delivered pursuant hereto or in connection herewith shall survive the making of the Facility and the issuance of the Note.

3.THE FACILITY

3.1 Purposes. (a) The Lenders shall, during the Availability Period, make the Facility availableto the Borrower for the purpose of partially financing the acquisition costs of the Vessel.

24

(b) Making of the Facility. Each of the Lenders, relying upon each of therepresentations 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 1 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.

3.2 Receipt of Funds. Unless the Facility Agent shall have received notice from a Lender priorto 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 Borrower and the defaulting Lender, the liability for any break funding costs as described in Section 4.3 shall be borne by the defaulting Lender. If the defaulting Lender has not paid any such break funding costs upon demand by the Facility Agent therefor, the Borrower shall pay such break funding costs upon demand by the Facility Agent and the Borrower shall be entitled to recover any such payment for break funding costs made by the Borrower from the defaulting Lender.

3.3 Drawdown Notice. The Borrower shall, by 10:00 a.m. New York City time on a day whichis 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.

3.4 Effect of Drawdown Notice. Delivery of the Drawdown Notice shall be deemed toconstitute 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 Facilityavailable to the Borrower under this Agreement shall be expressly subject to the following conditions precedent:

25

(a)Corporate Authority. The Facility Agent shall have received the following documents inform and substance satisfactory to the Facility Agent and its legal advisers:

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 bylaws or similar constituent document thereof;

(iii) copies, certified as true and complete by an officer of each of the Security Parties (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 certificate 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 Party 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 thisAgreement 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 thisAgreement from each of the Lenders.

(e)Fees. The Creditors shall have received payment in full of all fees and expenses due to eachthereof 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 issubject 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 havereceived opinions addressed to the Facility Agent from (i) Jones Walker, 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

26

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.

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 receiveddocumentation, 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) certified 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;

(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 LoanAdministration Form.

(p)Debt Service Letter of Credit. The Facility Agent shall have received the Debt ServiceLetter of Credit.

(q)Maritime Administration Approval.The Borrower shall have obtained MaritimeAdministration Approval in form and substance satisfactory to the Lenders.

(r)Vessel Documents. The Facility Agent shall have received:

27

(i) the latest survey report in respect of the Vessel;

(ii) the classification certificate 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 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); 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;

(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 Mortgage relating to its Vessel;

(vi) Manager's Undertaking from each of the Commercial Manager (unless the Borrower 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;

28

(vii) evidence that the Borrower has sent an instruction letter to the Classification Society as required under Section 9.1(z) and that the Classification Society has executed the undertaking 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 wouldresult from the making of the requested Advance.

(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 bythe administrative agent, the collateral agent, the "Required Lenders" and the loan parties under the Regions

29

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 Advancein 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 ofthis Agreement, in the event all of the Lenders elect, in their sole discretion, to make the Facility available to the Borrower 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 provisions of this Section 5 regarding application ofprepayments, the Borrower shall repay the principal of the Facility in twenty four (24) consecutive quarterly installments beginning 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 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 hereunderand under the Note shall be absolute, unconditional and irrevocable and shall be paid strictly in accordancewith the terms hereof and thereof, under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrower 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 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

31

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 1471(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 "withhold able payment," as defined in Section 1473 of the Internal Revenue Code, 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

32

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 therefor; 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

(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 performance or observance of any covenant contained in Section 9.1(b), 9.1(d), 9.1(f), 9.1(m), 9.1(n), 9.1(o), 9.1(r), 9.1(v), 9.2 (other than clauses (j), (1) and (m) thereof), 9.3, 9.4 and 9.5; 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

33

(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 property; 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

(I)Termination of Operations; Sale of Assets. Except as expressly permitted under this

Agreement or as contemplated by the EGS Borrower Restructuring 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

(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) ERISA Debt. An ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding Event shall exist or occur that, in the reasonable opinion of the Majority Lenders, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfunding Events 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 ERISA Affiliates in the aggregate in excess of $1,000,000; or

(p) Change of Control. A Change of Control has occurred; or

34

(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 Omnibus 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;

(x) EGS Borrower Restructuring. The EGS Borrower Restructuring shall not have been consummated in a manner reasonably satisfactory to the Facility Agent within ninety (90) days following the Closing Date (as defined in the GLOVISS COUNTESS Credit Facility); or

(y) GLOVIS COUNTESS Credit Facility Default. Any "Event of Default" occurs under and as defined in the GLOVIS COUNTESS Credit Facility;

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

35

(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 other Transaction 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:

( I)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 in respect of the Facility;

(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 other Transaction Documents, it will:

(a) Performance 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 other Transaction 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;

(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 other Transaction 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 ofeach fiscal year of the Guarantor, complete copies of the consolidated financial

36

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;

(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;

37

(e)Contingent Liabilities. For inclusion with each Compliance Certificate delivered in

connection with Sections 9.1(d)(i) and 9.l(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; and

(vii) provide the Facility Agent with all requested Vessel related information;

(g)Vessel Valuations. For inclusion with each Asset Maintenance Compliance Certificatedelivered 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 therefor, 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 9.1(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 infull force and effect its corporate existence in good standing and all licenses, franchises, permits and assets necessary to the conduct of its business;

(i)Books and Records. At all times keep proper books of record and account into which fulland correct entries shall be made in accordance with GAAP;

(j)Taxes and Assessments.Pay and discharge all material taxes, assessments andgovernmental 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;

38

(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 disponent 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 report;

(1)Inspection and Survey Reports. If the Lenders shall so request, the Borrower shall providethe 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;

(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, or another internationally recognized vessel technical manager approved by the Agents, such approval not to be unreasonably withheld, delayed or conditioned);

(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;

39

(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 1SSC;

(s) ERISA. Forthwith upon learning of the existence or occurrence of any ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding Event that, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfunding Events 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 ERISA Affiliates in the aggregate in excess of 5500,000, 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) Subordination of Loans. Cause all loans made to the EGS Borrower by the Guarantor, any Affiliate, parent or subsidiary of the Guarantor, and all sums and other financial obligations owed by it to the Guarantor, any Affiliate, parent or subsidiary of the Guarantor to be fully subordinated to the obligations owed under the Transaction Documents on terms acceptable to the Facility Agent';

(x) 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 4.1(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);

(z)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 case 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;

40

(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;

(aa)Classification Society Instructions and Undertaking. The Borrower shall instruct theClassification 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):

(1)to send to the Security Trustee, following receipt of a written request from theSecurity Trustee, certified true copies of all original class records held by the Classification Society in relation to the Vessel (and, upon the Second Vessel Transfer, the GLOVIS COUNTESS);

(ii)to allow the Security Trustee (or its agents), at any time and from time to time, toinspect the original class, related records and other information of the Borrower and the Vessel (and, upon the Second Vessel Transfer, the GLOVIS COUNTESS) 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 attechcom@dvbbank.com if the Classification Society:

(1) receives notification from the Borrower or any other person that the Vessel's Classification Society of the Vessel (or, upon the Second Vessel Transfer, the GLOV1S COUNTESS) 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 class of the Vessel (or, upon the Second Vessel Transfer, the GLOVIS COUNTESS) under the rules or terms and conditions of the Borrower's or the relevant 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;

(bb)GLOVIS COUNTESS Credit Facility Requirements. Comply with the terms of theGLOVIS COUNTESS Credit Facility;

41

(cc)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

(ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and reregister 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 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 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 GLOV1S COUNTESS Mortgage, the Assignments, the GLOVIS COUNTESS 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 (or in the case of the GLOVIS COUNTESS, under the terms of the GLOVIS COUNTESS 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

42

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 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.Other than as contemplated by the EGS Borrower Restructuring, 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 Wallem Ship management Hong Kong, or another internationally recognized vessel technical manager approved by the Agents, such approval not to be unreasonably withheld, delayed or conditioned);

(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. Other than as contemplated by the EGS Borrower Restructuring, materially change the nature of its business or commence any business materially different from its current business;

(i) Sale of Assets. Other than as contemplated by the EGS Borrower Restructuring, 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

43

its assets takenas 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 referred 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;

(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) with respect to the Guarantor only, 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 I 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 provision 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

44

(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;

(r) GLOVIS COUNTESS Credit Facility. Amend, or enter into any transaction that has theeffect of amending, the GLOVIS COUNTESS Credit Facility without the prior written consent of the Facility Agent.

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 other Transaction Documents, it will:

(a) Maximum Consolidated Leverage Ratio. Maintain a Consolidated Leverage Ratio not greater than (i) 4.50:1.00, for the fiscal quarter ending June 30, 2015, (ii) 5.00:1.00, beginning with the fiscal quarter ending September 30, 2015 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, for the fiscal quarter ending June 30, 2016 and (v) 4.25:1.00, 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;

(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;

(c) [intentionally Omitted].

(d) Minimum Liquidity.Maintain Liquidity of not less than Twenty Million Dollars
($20,000,000) 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 Fifty-Four Million Eight Hundred Eighty Thousand Dollars ($254,880,000) plus fifty percent (50%) of all Consolidated Net Income of the Guarantor and the Subsidiaries earned after March 31, 2015 plus one hundred percent (100%) of the proceeds of all issuances of equity interests (common or preferred) of the Guarantor and the Subsidiaries (on a consolidated basis) received after March 31, 2015 (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) 1.15:1.00, for the fiscal quarter ending June 30, 2015, (ii) 1.05:1.00, beginning with the fiscal quarter ending September 30, 2015 through the fiscal quarter ending December 31, 2015, (iii) 1.15:1.00, for the fiscal quarter ending March 31, 2016, (iv) 1.20:1.00, for the fiscal quarter ending June 30, 2016 and (v) 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) MFN. 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; and

45

(i)Covenant Reset. In the event that the Borrower or the Guarantor enters into a transaction

that has a materially positive impact on the financial condition of the Borrower or the Guarantor, the Borrower and the Guarantor shall in good faith negotiate with the Lenders to amend this Agreement in order to bring the covenant levels set forth in this Section 9.3 closer to the levels that the Guarantor was subject to in other credit facilities prior to the Closing Date. If the Lenders and the Security Parties, acting in good faith, fail to agree to new covenant levels, the covenant levels set forth in Section 9.3 shall revert to the levels in effect as of December 31, 2014 under the Facility.

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.

9.5Borrower Restructuring. The Borrower and the Guarantor shall, as soon as possible after the

date of the Amendment No. 4 to this Agreement but in no event later than 90 days after the Closing Date (as defined in the GLOVISS COUNTESS Credit Facility), ensure that:

(a) The Vessel shall be transferred into the ownership of the EGS Borrower and the Other EGS Vessels shall be transferred out of the ownership of the EGS Borrower, the effect of which is that the only two vessels owned by the EGS Borrower as of that date shall be the Vessel and the GLOVIS COUNTESS;

(b) The EGS Borrower shall provide to the Facility Agent the following documents:

(i) Evidence of Vessel Transfer. copies of the bills of sale and other evidence satisfactory to it and its counsel that the transfers contemplated in clause (a) have been consummated;

(ii) Vessel Documents. evidence satisfactory to it and its counsel that the Vessel is:

(I) in the sole and absolute ownership of the EGS Borrower and duly registered

in the EGS Borrower's name in the Republic of the Marshall Islands, free of all liens and encumbrances of record other than the Mortgage and the GREEN BAY-$32M Credit Facility 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

46

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.

(iii)Charter and NYK Consent. (A) copies of the charter party, along with the relevant

addenda, entered by the EGS Borrower with Nippon Yusen Kaisha in respect of the Vessel, each certified as true and complete by an officer of the EGS Borrower, and (B) a copy of the executed and countersigned notice and acknowledgment of assignment of earnings and time charter and subordination agreement from Nippon Yusen Kaisha;

(iv)Security Documents.

(1) the GLOVIS COUNTESS Assignments;

(2) the Assignment Notices and the acknowledgements thereof in respect of (I) above (including the executed and countersigned notice and acknowledgment of assignment of earnings and time charter and subordination agreement from Hyundai Glovis Co., Ltd.);

(3) the GLOVIS COUNTESS Mortgage; and

(4) the Manager's Undertaking in respect of the GLOVIS COUNTESS from each of the Commercial Manager (unless the EGS Borrower 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;

(5) evidence that the EGS Borrower has sent an instruction letter in respect of the GLOVIS COUNTESS to the Classification Society as required under Section 9.1(aa) and that the Classification Society has executed the undertaking as required thereby; and

(6) an irrevocable power of attorney granted by the EGS 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 GLOVIS COUNTESS and obliges the master of the GLOVIS COUNTESS to adhere to the Security Trustee's instructions;

(v)Registration of the GLOVIS COUNTESS Mortgage. satisfactory evidence that the

GLOVIS COUNTESS Mortgage has been duly registered under the laws of the Republic of the Marshall Islands and constitutes a preferred mortgage lien under such jurisdiction;

(vi)Pari Passu Intercreditor Agreement. a Pari Passu Intercreditor Agreement, duly

executed by the EGS Borrower, the Guarantor, and the security trustee and the facility agent in respect of the GLOVIS COUNTESS Credit Facility;

(vii)UCC Filings. 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;

47

(viii) Legal Opinions. opinions addressed to the Facility Agent from (i) Jones Walker, L.L.P., special counsel to the EGS Borrower (including a no conflicts opinion with the other material agreements of the EGS Borrower and the Guarantor) 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 require as to all or any matters under the laws of New York and the Republic of the Marshall Islands;

(ix) ING Credit Agreement Amendment. evidence that the ING Credit Agreement is amended to provide for the change of the borrower thereunder, to reset financial covenant levels and to effect other changes relating to the EGS Borrower Restructuring in form and substance satisfactory to the Facility Agent;

(x) Consent. evidence that all third party consent, including that of Citizens Asset Finance, Inc. as lender under the credit facility entered into by LCI Shipholdings, Inc. with respect to the GREEN DALE, required or necessary to effect the transfer of the GREEN BAY to the Borrower has been obtained;

(xi) Officer's Certificate. anofficer's certificate of the EGS Borrower certifying as of the date of the GLOVIS COUNTESS Mortgage that after giving effect to the EGS Borrower Restructuring (i) the representations stated in Section 2 are true and correct as if made on that date, (ii) no Default or Event of Default has occurred and is continuing, (iii) there has not been any Material Adverse Effect since the date of the Closing Date, (iv) no third party or governmental consent (other than those already obtained) is necessary or required in order for the EGS Borrower to consummate the EGS Borrower Restructuring and (v) the conditions set forth in this Section 9.5 have been satisfied;

(xii) ING Credit Agreement. evidence that the EGS Borrower is released from all obligations under the ING Credit Agreement; and

(xiii) Miscellaneous. any other certificates, instruments or other documents (including any amendment to the GLOVIS COUNTESS Credit Facility) that the Facility Agent may reasonably require in connection with the EGS Borrower Restructuring and the GLOVIS COUNTESS.

(c)The EGS Borrower shall comply with the obligations set forth in Sections 9.5 of the

GLOVIS COUNTESS Credit Facility.

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 15th 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 the15th dayof each calendar month shall be transferred to the Retention Account, so that on the last day of each

48

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 Borrower hereby authorizes the Facility Agent and the Account Bank to make such transfer(s). 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.

(e)In the event that pursuant to Section 5.3 of the GLOVIS COUNTESS Credit

Facility, the proceeds in respect of the GLOVIS COUNTESS are applied to repay the Facility in an amount equal to the face amount of the Debt Service Letter of Credit, the Debt Service Letter of Credit may be terminated.

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 or any breach under Section 9.3 or 9.4, without prejudice to any other right the Security Trustee may have under the

49

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) the liability 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 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.

50

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 referred 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 irrevocable 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 referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor 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 Borrower 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.

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.

51

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 forthwith become due and payable by the Guarantor for purposes of Section 11.1.

11.6Joint, Several and Solidary Liability. The Guarantor's obligations and liability under this

Agreement shall be on a "solidary" 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 "solidary" 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) Corwrate Authority. The Facility Agent shall have received from the Ultimate Borrower the documents described in Section 4.1(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;

(iii) Omnibus Assignment and Assumption Agreement. The Initial Borrower 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;

52

(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, 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 novation 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 9.1(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.

(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.

53

(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 Facility 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 Mortgage. 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.

(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.

54

(c)Notwithstanding the foregoing clause (a), the Ultimate Borrower may assign its

rights and obligations under the Transaction Documents to the EGS Borrower in connection with the Second Vessel Transfer; provided, (x) before and after giving effect to the Second Vessel Transfer, no Default or Event of Default shall have occurred and be continuing and (y) the following conditions precedent shall have been satisfied:

(i) the requirements set forth in the foregoing clause (b), reasonably modified in the context of the Second Vessel Transfer; and

(ii) the Debt Service Letter of Credit to be re-issued in the name of the EGS Borrower as applicant;

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) Banking 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 Borrower 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

55

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 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:

56

(1) such Lender shall notify the Facility Agent and the Borrower of the happening of such event, and

(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.

57

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.

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 therefor 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, JURISDICTION AND WAIVER

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.

16.3 Waiver of Immunity. To the extent that any of the security parties has or hereafter may acquire any immunity from suit, jurisdiction of

58

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 respect of its obligations under this agreement or any other transaction document.

16.4 Waiver 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 in 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

59

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, forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Lenders until the date such amount is repaid to the Facility Agent or the Security Trustee, as the case may be, as calculated by the Facility Agent or Security Trustee to reflect its cost of funds.

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 connection 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 Transaction 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 Majority 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 other Transaction

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

60

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 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 other Transaction Document except as expressly provided herein or in such other Transaction 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 other Transaction Documents as the Majority Lenders shall request in writing.

17.10 Limitations 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 Transaction 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 Transaction 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.

17.11 Indemnification 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

61

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.

17.12 Consultation 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.

17.13 Resignation. 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.

17.14 Representations 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.

17.15 Notification 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.

17.16 Reversal 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 Transaction 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.

17.17 Parallel Debt.

(a)The Borrower hereby irrevocably and unconditionally undertakes, as far asnecessary 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

62

Parties from time to time due in accordance with the terms and conditions of such Principal Obligations (such payment undertaking and the obligations and liabilities which are the result thereof, its "Parallel Debt").

(b) Each of the parties hereto hereby acknowledges that (i) the Parallel Debt of the Borrower constitutes undertakings, 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.

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 17.17(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.

(c) 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

63

One Whitehall Street

New York, NY 10004

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/+ 1 917 369 2196

Attention: Christoph Clauss / Matthew Galici

christoph.clauss@dvbbank.com / matthew.galicicr@vbbank.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.

64

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 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 parties 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

65

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 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.

19.9 USA 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.

19.10 Remedies 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, 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 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.

19.11 Counterparts; 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.

66

19.12 Headings. 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.

19.13 Disclosure.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 other Transaction Documents, the Commitments, any agreement entered into by any of the Security Parties in connection with this Agreement, the Note or the other Transaction 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 other Transaction 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 other Transaction 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.

19.14 Pari Passu Intercreditor Agreement. The terms of this Agreement and the other Transaction Documents are subject to the terms of the Pari Passu Intercreditor Agreement. Where a conflict exists between this Agreement and the Intercreditor Agreement, the lntercreditor Agreement shall govern. The Creditors hereby authorize the Facility Agent and the Security Trustee to enter into the Pari Passu Intercreditor Agreement and any necessary amendment, modification or termination thereof.

[Remainder of Page Intentionally Left Blank]

67

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:

DVB BANK SE

as Mandated Lead Arranger, Facility Agent, Security Trustee and Lender

By:_________________________________________________________________________________________________

Name:

Title:

By:_________________________________________________________________________________________________

Name:

Title:

SCHEDULE I

LENDERSCOMMITMENT

DVB Bank SE$38,500,000

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

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

Grey 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 NW1 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

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, lnc, 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 Ship Management, 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 B

PREFERRED MORTGAGE
on the

Marshall Islands Flag Vessel
GLOVIS COUNTESS

EAST GULF SHIPHOLDING, INC.,
as Owner

TO

DVB BANK SE,
as Mortgagee

Dated as of April_____________________________________, 2015

THIS PREFERRED MORTGAGE (this "Mortgage") is made and given as of the_____________________________________

day of April, 2015 by EAST GULF SHIPHOLDING, [NC., 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 GLOVIS COUNTESS Official No. 3831, of 60,213 gross tons, 18,573 net tons, built in 2010 (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 August 26, 2014 (as amended, supplemented or otherwise modified from time to time, including by Amendment No. 1 dated October 28, 2014, Amendment No. 2 dated November 24, 2014, the LCI Assignment and Assumption Agreement (as defined below) dated December 29, 2014, Amendment No. 3 dated March 30, 2015, Amendment No. 4 dated April [ 1, 2015 and the EGS Assignment and Assumption Agreement (as defined below), 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) 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 (together with the Lenders, the Facility Agent and the Security Trustee, the "Creditors"), 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").

C. Pursuant to an omnibus assignment, assumption and amendment agreement, dated December 29, 2014 (the "LCI Assignment and Assumption Agreement"), among LCI SHIPHOLDINGS, INC., a corporation existing under the laws of the Republic of the Marshall Islands ("LCI"), the Guarantor, WATERMAN STEAMSHIP CORPORATION, a corporation organized and existing under the laws of the State of New York ("Waterman"), the original borrower under the Credit Agreement, and the Creditors, Waterman assigned to LCI all of its right, title, interest, and obligations in, to and under the Transaction Documents (as defined in the Credit Agreement) including, inter alia, the transfer of all the Collateral (as defined in the Credit Agreement) to LCI and whereby LCI was deemed to be the borrower for all purposes under the Credit Agreement.

D. Pursuant to an omnibus assignment, assumption and amendment

agreement, dated April , 2015 (the "EGS Assignment and Assumption Agreement", a copy
of the form of the EGS Assignment and Assumption Agreement is annexed hereto as Exhibit B), among the Guarantor, LCI, the Owner and the Creditors, LCI assigned to the Owner all of its right, title, interest, and obligations in, to and under the Transaction Documents (as defined in the Credit Agreement) including, inter alia, the transfer of all the Collateral (as defined in the Credit Agreement) to the Owner and whereby the Owner is deemed to be the borrower for all purposes under the Credit Agreement.

E. The obligation of the Owner to repay the Loan under the Credit

Agreement is evidenced by a promissory note dated April , 2015, 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 C. 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.

F. Pursuant to Section 9.5 of the Credit Agreement, the Owner has effectuated the Borrower Restructuring.

G. 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.

H. The Owner, in order to secure the payment of the Obligations, as that term is defined in subsection 1(A)(v) 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 Preferred Mortgage under and pursuant to the Maritime Law.

NOW, THEREFORE, THIS MORTGAGE WITNESSETH:

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

2

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 charterparty 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) "Intercreditor Agreement" means that certain Pari Passu Intercreditor Agreement to be entered into by the Owner, the Guarantor and DVB in its capacity as (i) facility agent under the Credit Agreement and (ii) facility agent under that certain credit agreement entered into by and among (1) the Owner, as borrower, (2) International Shipholding Corporation, as guarantor, (3) the banks and financial institutions listed on Schedule I thereto, as lenders (4) DVB, as facility agent and security trustee for the lenders and (5) DVB, as mandated lead arranger, dated as of April [ 1, 2015.

(v) "Maritime Law" means Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands;

(vi) "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;

(vii) "Person" when used herein shall have the same meaning as in the Credit Agreement;

(viii) "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;

(ix) "Security Documents" when used herein shall have the same meaning as in the Credit Agreement;

3

(x)"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;

(xi) "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

(xii) "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.

4

(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 Republic of the Marshall Islands; otherwise to be and remain in full force and effect.

2.2 The 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.

5

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.

4. Covenants Regarding Security Granted Hereunder. It is declared and agreed that:

(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

(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

6

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.

(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 therefor (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:

7

(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;

(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:

8

(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 subsection (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 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

9

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 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 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 therefor, 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 Mortgagee so long as no Event of Default has occurred

10

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 Mortgagee, 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 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 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 Mortgagee copies of all survey and inspection reports and confirmations of class issued in respect thereof;

11

(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;

(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

12

(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 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 in accordance with Section 8 hereof as if received in respect of the sale of the Vessel;

(L) [Intentionally Omitted];

(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 as otherwise provided for in the Credit Agreement, 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 and as otherwise provided for in the Credit Agreement, to pledge, charge, assign or otherwise encumber 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 or as otherwise provided for in the Credit Agreement;

(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;

13

(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 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 EAST GULF SHIPHOLDING, INC., and is subject to a preferred mortgage (the "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 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:

(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

14

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.

(B) If any Event of Default shall occur, the Mortgagee shall be entitled:

15

(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 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 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 deems advisable and to permit the brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

16

(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 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 in 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 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,

17

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 therefor.

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 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 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:

18

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 therefor.

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.

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

19

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 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, a quittance, 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, 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.

20

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.

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 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 property 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 Mortgage 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.

20. Notices. Notices and other communications under this Mortgage shall be in writing and may be given by facsimile as follows:

21

If to the Owner:

East Gulf Shipholding, 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/+ 1 917 369 2196

Attention: Christoph Clauss/Matthew Galici

Email: christoph.clauss@dvbbank.com/  matthew.galici@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

22

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 Mortgage 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.

26. Intercreditor Agreement. This Mortgage shall be subject to the terms of the Intercreditor Agreement. Where a conflict exists between this Mortgage and the Intercreditor Agreement, the Intercreditor Agreement shall govern.

[Signature Page to Follow]

23

IN WITNESS WHEREOF, the Owner has executed this Mortgage by its duly authorized representative as of the day and year first above written.

EAST GULF SHIPHOLDING, INC., as Owner

By:_____________________________________________________________________________________

Name:

Title:

ACKNOWLEDGMENT OF MORTGAGE

STATE OF NEW YORK)

ss:

COUNTY OF NEW YORK)

On the ___________day of ___________, in the year 2015, 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

ACKNOWLEDGMENT OF MORTGAGE

STATE OF NEW YORK)

: ss:

COUNTY OF NEW YORK)

On the ___________day of ___________, in the year 2015, 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

Exhibit A

Credit Agreement

Exhibit B

Assignment and Assumption Agreement

Exhibit C

Note

EXHIBIT C

PARI PASSU INTERCREDITOR AGREEMENT

DVB BANK SE,

as Glovis Countess Agent

AND

DVB BANK SE,
as Green Bay Agent

AND

EAST GULF SHIPHOLDING, INC.,
as Borrower

AND

INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor

[              ], 2015

THIS AGREEMENT is dated [], 2015 and made by and among:

(1) DVB BANK SE as facility agent and security trustee (the "Glovis Countess Agent") and lender under the Glovis Countess Credit Agreement;

(2) DVB BANK SE as facility agent and security trustee (the "Green Bay Agent") and lender under the Green Bay Credit Agreement;

(3) EAST GULF SHIPHOLDING, INC., a corporation organized and existing under the laws of the Republic of the Marshall Islands (the "Borrower"); and

(4) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Guarantor").

IT IS AGREED as follows:

1.DEFINITIONS AND INTERPRETATION

1.1Definitions

In this Agreement:

"Business Day" means any day that is not a Saturday, Sunday or other day on which banks in London, England, Frankfurt, Germany or New York, New York are authorized or required by law to remain closed.

"Cash Proceeds" means:

(a) proceeds of the Security Property which are in the form of cash; and

(b) any cash which is generated by holding, managing, exploiting, collecting, realizing or disposing of any proceeds of the Security Property which are in the form of Non-Cash Consideration.

"Controlling Agent" means the Glovis Countess Agent.

"Creditors" means the Glovis Countess Creditors and the Green Bay Creditors.

"Debt Document" means each of this Agreement, the Glovis Countess Transaction Documents and the Green Bay Transaction Documents.

"Distress Event" means any of:

(a) an Event of Default; or

(b) an Enforcement Action.

“Enforcement Action” means:

a. in relation to any Liabilities:

i. the acceleration of any Liabilities or the making of any declaration thatany Liabilities are prematurely due and payable (other than as a result of any voluntary prepayment arising under the Debt Documents);

ii. the making of any declaration that any Liabilities are payable on demand;

iii. the making of a demand in relation to a Liability that is payable on demand;

iv. the exercise of any right of set-off, account combination or payment netting against any Obligor in respect of any Liabilities other than the exercise of any such right which is otherwise expressly permitted under the Glovis Countess Credit Agreement or the Green Bay Credit Agreement to the extent that the exercise of that right gives effect to a Permitted Payment; and

v. the suing for, commencing or joining of any legal or arbitration proceedings against either Obligor to recover any Liabilities;

b. the taking of any steps to enforce or require the enforcement of any Transaction Security;

c. the entering into of any composition, compromise, assignment or arrangement with either Obligor which owes any Liabilities, or has given any Security, guarantee or indemnity or other assurance against loss in respect of the Liabilities (other than any action permitted under Clause 9 (Changes to the Parties); or

d. the petitioning, applying or voting for, or the taking of any steps (including the appointment of any liquidator, receiver, administrator or similar officer) in relation to, the winding up, dissolution, administration or reorganization of either Obligor which owes any Liabilities, or has given any Security, guarantee, indemnity or other assurance against loss in respect of any of the Liabilities, or any of such Obligor's assets or any suspension of payments or moratorium of any indebtedness of any such Obligor, or any analogous procedure or step in any jurisdiction,

except that the taking of any action falling within paragraphs (a)(v) or (d) above which is necessary (but only to the extent necessary) to preserve the validity, existence or priority of claims in respect of Liabilities, including the registration of such claims before any court or governmental authority and the bringing, supporting or joining of proceedings to prevent any loss of the right to bring, support or join proceedings by reason of applicable limitation periods shall not constitute Enforcement Action.

"Event of Default" means any event or circumstance specified as such in either the Glovis Countess Credit Agreement or the Green Bay Credit Agreement.

"Facility Agreement" means each of the Glovis Countess Credit Agreement and the Green Bay Credit Agreement.

"Final Discharge Date" means the later to occur of the Glovis Countess Discharge Date and the Green Bay Discharge Date.

"Financial Adviser" means any:

(a) independent internationally recognized investment bank;

(b) independent internationally recognized accounting firm;

(c) other independent internationally recognized professional services firm which is regularly engaged in providing valuations of businesses or financial assets or, where applicable, advising on competitive sales processes; or

(d) with respect to any vessel, an "Approved Ship Broker" as such term is definedin the Glovis Countess Credit Agreement.

"Clovis Countess Credit Agreement" means the credit agreement made by and among, inter alios, the Borrower, the Guarantor and the Glovis Countess Agent, dated April [   ], 2015, as such document is amended, amended and restated, supplemented or otherwise modified from time to time.

"Glovis Countess Creditors" means the "Creditors" as defined in the Glovis Countess Credit Agreement.

"Glovis Countess Discharge Date" means the first date on which all Glovis Countess Liabilities have been fully and finally discharged to the satisfaction of the Glovis Countess Agent, whether or not as the result of an enforcement, and the Glovis Countess Agent is under no further obligation to provide financial accommodation to the Borrower under the Debt Documents.

"Glovis Countess Liabilities" means the Liabilities owed by the Obligors to the Glovis Countess Creditors under or in connection with the Glovis Countess Transaction Documents.

"Glovis Countess Transaction Documents" has the meaning given to the term "Transaction Documents" in the Glovis Countess Credit Agreement.

"Green Bay Credit Agreement" means the credit agreement made originally by and among, inter alios, Waterman Steamship Corporation, as original borrower, the Guarantor, and the Green Bay Agent, dated August 26, 2014, as such document has been and is amended, amended and restated, supplemented or otherwise modified from time to time.

"Green Bay Creditors" means the "Creditors" as defined in the Green Bay Credit Agreement.

"Green Bay Discharge Date" means the first date on which all Green Bay Liabilities have been fully and finally discharged to the satisfaction of the Green Bay Agent, whether or not as a result of an enforcement, and the Green Bay Agent is under no further obligation to provide financial accommodation to the Borrower under the Debt Documents.

"Green Bay Liabilities" means the Liabilities owed by the Obligors to the Green Bay Creditors under or in connection with the Green Bay Transaction Documents.

"Green Bay Transaction Documents" has the meaning given to the term "Transaction Documents" in the Green Bay Credit Agreement.

"Insolvency Event" means, in relation to any Obligor:

(a) any resolution is passed or order made for the suspension of payments, winding up, dissolution, administration or reorganization of that Obligor, a moratorium is declared in relation to any indebtedness of that Obligor or an administrator is appointed to that Obligor;

(b) any composition, compromise, assignment or arrangement is made with any of its creditors;

(c) the appointment of any liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of that Obligor or any of its assets;

(d) enforcement of any Security over any assets of any Obligor; or

(e) any analogous procedure or step is taken in any jurisdiction.

"Instructing Group" means at any time the "Majority Lenders" as defined in the Glovis Countess Credit Agreement.

"Liabilities" means all present and future liabilities and obligations at any time of the Obligors to any Creditor under the Debt Documents, both actual and contingent and whether incurred solely or jointly or as principal or surety or in any other capacity together with any of the following matters relating to or arising in respect of those liabilities and obligations:

(a) any refinancing, novation, deferral or extension;

(b) any claim for breach of representation, warranty or undertaking or on an event of default or under any indemnity given under or in connection with any document or agreement evidencing or constituting any other liability or obligation falling within this definition;

(c) any claim for damages or restitution; and

(d) any claim as a result of any recovery by any Debtor of a Payment on the grounds of preference or otherwise,

and any amounts which would be included in any of the above but for any discharge, non-provability, unenforceability or non-allowance of those amounts in any insolvency or other proceedings.

"Non-Cash Consideration" means consideration in a form other than cash.

"Non-Cash Recoveries" means any amount distributed to the Controlling Agent pursuant to Clause 5.1 (Turnover by the Creditors), which are, or is, in the form of Non-Cash Consideration.

"Obligor" shall mean each of the Borrower and/or the Guarantor. "Party" means a party to this Agreement.

"Payment" means, in respect of any Liabilities (or any other liabilities or obligations), a payment, prepayment, repayment, redemption, defeasance or discharge of those Liabilities (or other liabilities or obligations).

"Permitted Payment" means a Permitted Glovis Countess Payment or a Permitted Green Bay Payment.

"Permitted Glovis Countess Payments" means the Payments permitted by Clause 3.1 (Payment of Glovis Countess Liabilities).

"Permitted Green Bay Payments" means the Payments permitted by Clause 3.2 (Payment of Green Bay Liabilities).

"Recoveries" has the meaning given to that term in Clause 7.1 (Order of Application).

"Relevant Liabilities" means Liabilities for which a payment or distribution has been received.

"Secured Obligations" means all the Liabilities and all other present and future liabilities and obligations at any time due, owing or incurred by any Obligor to any Creditor under the Debt Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.

"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

"Security Documents" means the "Security Documents" under and as defined in the Glovis Countess Credit Agreement and the "Security Documents" under and as defined in the Green Bay Credit Agreement.

"Security Property" means:

(a) the Transaction Security and all proceeds of that Transaction Security; and

(b) all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Liabilities to the Creditors and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor in favor of either Creditor.

"Taxes" has the meaning assigned to such term in the Glovis Countess Credit Agreement.

"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under or pursuant to the Security Documents.

1.2Construction

(a)Unless a contrary indication appears, a reference in this Agreement to:

(i) The "Borrower", "Guarantor", "Glovis Countess Agent", "Green Bay Agent", "Controlling Agent" or any "Creditor" or "Obligor" shall be construed to be a reference to it in its capacity as such and not in any other capacity;

(ii) any "Creditor" or "Obligor" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Debt Documents;

(iii) an "amount" includes an amount of cash and an amount of Non-Cash Consideration;

(iv) "assets" includes present and future properties, revenues and rights of every description;

(v) a  "Debt Document" or any other agreement or instrument is a reference to that Debt Document, or other agreement or instrument, as amended, novated, supplemented, extended or restated as permitted by this Agreement;

(vi) a  "distribution" of or out of the assets of an Obligor, includes a distribution of cash and a distribution of Non-Cash Consideration;

(vii) "enforcing" (or any derivation) the Transaction Security includes the appointment of an administrator (or any analogous officer in any jurisdiction) of an Obligor by a Creditor;

(viii) "indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(ix) a  "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);

(x) a  "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law one with which companies customarily comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organization; and

(xi) a provision of law is a reference to that provision as amended or reenacted.

(b)Section, Clause and Schedule headings are for ease of reference only.

2. RANKING AND PRIORITY

2.1Creditor Liabilities

Each of the Parties agrees that the Liabilities owed by the Obligors to the Creditors shall rank in right and priority of payment pari passu and without any preference between them.

2.2Transaction Security

Each of the Parties agrees, acknowledges and stipulates that all Liabilities owed by the Obligors to the Creditors are intended to be secured by the Transaction Security and that the priorities in the Transaction Security, as between the Glovis Countess Creditors and the Green Bay Creditors, shall be equal and that each shall share and be equal in priority and rights with the other, subject to the terms of this Agreement, in each case, regardless of the time, method or order of attachment or perfection of any Transaction Security, or the lien priorities which might apply as a matter of law, and in each case, notwithstanding that any Transaction Security is not actually granted or improperly granted, unperfected, avoided, a fraudulent transfer or otherwise unenforceable or ineffective.

3. CREDITOR LIABILITIES

3.1Payment of Glovis Countess Liabilities

The Obligors may make Payments of the Glovis Countess Liabilities at any time and in accordance with the Glovis Countess Transaction Documents.

3.2Payment of Green Bay Liabilities

The Obligors may make Payments of the Green Bay Liabilities at any time and in accordance with the Green Bay Transaction Documents.

4.EFFECT OF INSOLVENCY EVENT

4.1Distributions

(a) After the occurrence of an Insolvency Event in relation to either Obligor, either Creditor entitled to receive a distribution out of the assets of that Obligor in respect of Liabilities owed to that Creditor shall, to the extent it is able to do so, direct the person responsible for the distribution of the assets of that Obligor to make that distribution to the Controlling Agent (or to such other person as the Controlling Agent shall direct).

(b) The Controlling Agent shall apply distributions made to it under paragraph (a) above, including any distributions made directly to it from the assets of either Obligor, in accordance with Clause 7 (Application of Proceeds).

4.2Set-Off

To the extent that any Obligor's Liabilities are discharged by way of set off (mandatory or otherwise) after the occurrence of an Insolvency Event in relation to that Obligor, any Creditor which benefited from that set-off shall pay an amount equal to the amount of the Liabilities owed to it which are discharged by that set-off to the Controlling Agent for application in accordance with Clause 7 (Application of Proceeds).

4.3Non cash distributions

If either Creditor receives a distribution in the form of Non-Cash Consideration in respect of any of the Liabilities (other than any distribution of Non-Cash Recoveries), the Liabilities will not be reduced by that distribution until and except to the extent that the realization proceeds are actually applied towards the Liabilities.

4.4Filing of claims

After the occurrence of an Insolvency Event in relation to either Obligor, each Creditor shall be authorized to:

(a) take any Enforcement Action (in accordance with the terms of this Agreement) against that Obligor;

(b) demand, sue, prove and give receipt for any or all of that member of the Obligor's Liabilities;

(c) collect and receive all distributions on, or on account of, any or all of that Obligor's Liabilities; and

(d) file claims, take proceedings and do all other things the Controlling Agent considers reasonably necessary to recover that Obligor's Liabilities.

5.TURNOVER OF RECEIPTS

5.1Turnover by the Creditors

Subject to Clause 5.2, if at any time prior to the Final Discharge Date, any Creditor receives or recovers:

(a)any Payment or distribution of, or on account of or in relation to, any of the

Liabilities which is not either:

(i)a Permitted Payment; or

(ii)made in accordance with Clause 7 (Application of Proceeds);

(b)other than where Clause 4.2 (Set-Off) applies, any amount by way of set off in

respect of any of the Liabilities owed to it which does not give effect to a Permitted Payment;

(c)notwithstanding paragraphs (a) and (b) above, and other than where Clause 4.2

(Set-Of]) applies, any amount:

(1)on account of, or in relation to, any of the Liabilities:

(A) after the occurrence of a Distress Event; or

(B) as a result of any other litigation or proceedings against either Obligor (other than after the occurrence of an Insolvency Event in respect of that Obligor); or

(ii)by way of set off in respect of any of the Liabilities owed to it after the

occurrence of a Distress Event,

other than, in each case, any amount received or recovered in accordance with Clause 7 (Application of Proceeds);

(d)the proceeds of any enforcement of any Transaction Security except in

accordance with Clause 7 (Application of Proceeds); or

(e)other than where Clause 4.2 (Set-Off) applies, any distribution or Payment of, or

on account of or in relation to, any of the Liabilities owed by any Obligor which is not in accordance with Clause 7 (Application of Proceeds) and which is made as a result of, or after, the occurrence of an Insolvency Event in respect of that Obligor,

that Creditor will:

(i)in relation to receipts and recoveries not received or recovered by way

of set-off:

(A) hold an amount of that receipt or recovery equal to the Relevant Liabilities (or if less, the amount received or recovered) on trust for the Controlling Agent and promptly pay or distribute that amount to the Controlling Agent for application in accordance with the terms of this Agreement; and

(B) promptly pay or distribute an amount equal to the amount (if any) by which the receipt or recovery exceeds the Relevant Liabilities to the Controlling Agent for application in accordance with the terms of this Agreement; and

(ii)in relation to receipts and recoveries received or recovered by way of

set-off, promptly pay an amount equal to that recovery to the Controlling Agent for application in accordance with the terms of this Agreement.

5.2Turnover of Non-Cash Consideration

For the purposes of this Clause 5, if any Creditor receives or recovers any amount or distribution in the form of Non-Cash Consideration which is subject to Clause 5.1

(Turnover by the Creditors) the cash value of that Non-Cash Consideration shall bedetermined in accordance with Clause 7.7 (Cash value of Non-Cash Recoveries).

6. ENFORCEMENT OF TRANSACTION SECURITY

6.1Enforcement Instructions

The Transaction Security shall only be enforced by the Controlling Agent upon the instruction of the Instructing Group. No other Creditor shall have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Controlling Agent.

6.2Waiver of rights

To the extent permitted under applicable law and subject to Clause 6.1 (Enforcement Instructions) and Clause 7 (Application of Proceeds), each of the Creditors and the Obligors waives all rights it may otherwise have to require that the Transaction Security be enforced in any particular order or manner or at any particular time or that any amount received or recovered from any person, or by virtue of the enforcement of any of the Transaction Security or of any other security interest, which is capable of being applied in or towards discharge of any of the Secured Obligations is so applied.

7. APPLICATION OF PROCEEDS

7.1Order of Application

Subject to Clause 7.2 (Prospective liabilities), all amounts from time to time received or recovered by either Creditor pursuant to the terms of any Debt Document (unless such recovery is a Permitted Payment) or in connection with the realization or enforcement of all or any part of the Transaction Security (for the purposes of this Clause 7, the "Recoveries") shall be held by the Controlling Agent on trust to apply them at any time as the Controlling Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the provisions of this Clause 7), in the following order of priority:

(a) first, on a pro rata basis, in or towards the payment or reimbursement of any expenses or liabilities incurred by (i) any of the Creditors in connection with the ascertainment, protection or enforcement of their rights and remedies under the Debt Documents or (ii) the Account Bank in relation to the Earnings Account and Retention Account (as such terms are defined in the respective Facility Agreement);

(b) second, on a pro rata basis, in or towards payment of any interest owing in respect of the Facilities;

(c) third, on a pro rata basis, in or towards repayment of the principal of the Facilities;

(d) fourth, on a pro rata basis, in or towards payment of all other sums which may be owing to any of the Creditors under the Debt Documents; and

(e) fifth, the balance, if any, in payment or distribution to the relevant Obligor.

7.2Prospective liabilities

Following a Distress Event, the Controlling Agent may, in its discretion:

(a) hold any amount of the Recoveries which is in the form of cash, and any cash which is generated by holding, managing, exploiting, collecting, realizing or disposing of any Non-Cash Consideration; and

(b) hold, manage, exploit, collect and realize any amount of the Recoveries which is in the form of Non-Cash Consideration,

in each case for so long as the Controlling Agent shall think fit for later application under Clause 7.1 (Order of Application) in respect of:

(i) any sum to any Creditor; and

(ii) any part of the Liabilities,

that the Controlling Agent reasonably considers, in each case, might become due or owing at any time in the future.

7.3Investment of Cash Proceeds

Prior to the application of the proceeds of the Security Property in accordance with Clause 7.1 (Order of Application) the Controlling Agent may, in its discretion, hold all or part of any Cash Proceeds in one or more suspense or impersonal account in the name of the Controlling Agent with such financial institution (including itself) and for so long as the Controlling Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those monies in the Controlling Agent's discretion in accordance with the provisions of this Clause 7.

7.4Permitted Deductions

The Controlling Agent shall be entitled, in its discretion, (a) to set aside by way of reserve amounts required to meet and (b) to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any law or regulation to make from any distribution or payment made by it under this Agreement, and to pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties or exercising its rights, powers, authorities and discretions.

7.5Good Discharge

(a)Any distribution or payment made in respect of the Secured Obligations shall

be a good discharge, to the extent of that payment or distribution, by the Controlling Agent:

(i) in the case of a payment made in cash, to the extent of that payment; and

(ii) in the case of a distribution of Non-Cash Recoveries, as determined by Clause 7.7 (Cash value of Non-Cash Recoveries).

7.6Calculation of Amounts

For the purpose of calculating any person's share of any amount payable to or by it, the Controlling Agent shall be entitled to assume that all amounts received or recovered as a result of the enforcement or realization of the Security Property are applied in discharge of the Liabilities in accordance with the terms of the Debt Documents under which those Liabilities have arisen.

7.7Cash value of Non-Cash Recoveries

(a) The cash value of any Non-Cash Recoveries shall be determined by reference to a valuation obtained by the Controlling Agent from a Financial Adviser appointed by the Controlling Agent on such terms as it may consider appropriate.

(b) If any Non-Cash Recoveries are distributed pursuant to Clause 7 (Application of Proceeds), the extent to which such distribution is treated as discharging the Liabilities shall be determined by reference to the cash value of those Non-Cash Recoveries determined pursuant to paragraph (a) above.

8.THE CONTROLLING AGENT

8.1Authority

(a) Notwithstanding any other provision of this Agreement, nothing herein shall be construed to impose any fiduciary or other duty on the Controlling Agent to any other Party.

(b) Each Party acknowledges and agrees that the Controlling Agent shall be entitled, for the benefit of the Creditors, to sell, transfer or otherwise dispose of or deal with any Transaction Security as provided herein and the Security Documents, as applicable, without regard to any rights to which the other Creditors would otherwise be entitled as a result of the Liabilities held by such other Creditors. Without limitation of the foregoing, each Party agrees that the Controlling Agent shall not have any duty or obligation first to marshal or realize upon any type of the Transaction Security, or to sell, dispose of or otherwise liquidate all or any portion of the Transaction Security in any manner that would maximize the return to the Creditors, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Creditors from such realization, sale, disposition or liquidation. Each of the Creditors waives any claim it may now or hereafter have against the Controlling Agent or the Instructing Group arising out of any actions which the Controlling Agent or the Instructing Group take or omit to take in respect of the Transaction Security.

(c) Each of the Creditors authorizes the Controlling Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Controlling Agent under or in connection with the Debt Documents together with any other incidental rights, powers, authorities and discretions.

8.2Exclusion of liability

(a)Without limiting paragraph (b) below (and without prejudice to any other

provision of any Debt Document excluding or limiting the liability of the

Controlling Agent), the Controlling Agent will not be liable for:

(i) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Debt Document or the Security Property unless directly caused by its gross negligence or wilful misconduct;

(ii) exercising or not exercising any right, power, authority or discretion given to it by, or in connection with, any Debt Document, the Security Property or any other agreement, arrangement or document entered

into, made or executed in anticipation of, under or in connection with, any Debt Document or the Security Property;

(iii) any shortfall which arises on the enforcement or realization of the Security Property; or

(iv) without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs, losses, any diminution in value or any liability whatsoever arising as a result of:

(A) any act, event or circumstance not reasonably within its control; or

(B) the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalization, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

(b) No Party (other than the Controlling Agent) may take any proceedings against any officer, employee or agent of the Controlling Agent in respect of any claim it might have against the Controlling Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Debt Document or any Security Property.

(c) Nothing in this Agreement shall oblige the Controlling Agent to carry out:

(i) any "know your customer" or other checks in relation to any person; or

(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Creditor,

on behalf of any Creditor and each Creditor confirms to the Controlling Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Controlling Agent.

8.3Creditors' indemnity to the Controlling Agent

(a)Each Creditor shall (in the proportion that the Liabilities due to it bear to the

aggregate of the Liabilities due to all the Creditors for the time being (or, if the Liabilities due to the Creditors are zero, immediately prior to their being reduced to zero)), indemnify the Controlling Agent, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Controlling Agent's gross negligence or wilful misconduct) in acting as Controlling Agent under, or exercising any authority conferred under, the Debt Documents (unless the relevant Controlling Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Debt Document).

(b)The Obligors shall immediately on demand reimburse any Creditor for any

payment that Creditor makes to the Controlling Agent pursuant to paragraph (a) above.

9.CHANGES TO THE PARTIES

9.1Assignments and transfers

No Party may:

(a) assign any of its rights; or

(b) transfer any of its rights and obligations,

in respect of any Debt Documents or the Liabilities except as permitted by this Clause 9 or otherwise by the Debt Documents.

9.2Change of Creditor

A Creditor may assign any of its rights in respect of any Debt Documents or the Liabilities if:

(i) that assignment or transfer is in accordance with the terms of the Facility Agreement to which it is a party; and

(ii) any assignee or transferee has (if not already a Party as a Creditor (as the case may be)) acceded to this Agreement, as a Creditor.

10. NOTICES

10.1Communications in writing

Any communication to be made under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made electronically or by letter.

10.2 Addresses

The contact information (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is that identified with its name in the respective Facility Agreement.

10.3 Delivery

(a)Any communication or document made or delivered by one person to another

under or in connection with this Agreement will only be effective:

(i) if by way of electronic means, when received in legible form; or

(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

and, if a particular department or officer is specified as part of its address details provided under Clause 10.2 (Addresses), if addressed to that department or officer.

(b)Any communication or document which becomes effective, in accordance with

paragraphs (a) above, after 5:00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

11. PRESERVATION

11.1Partial invalidity

If, at any time, any provision of a Debt Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of that provision under the law of any other jurisdiction will in any way be affected or impaired.

11.2No impairment

If, at any time after its date, any provision of a Debt Document (including this Agreement) is not binding on or enforceable in accordance with its terms against a person expressed to be a party to that Debt Document, neither the binding nature nor the enforceability of that provision or any other provision of that Debt Document will be impaired as against the other party(ies) to that Debt Document.

11.3Remedies and waivers

No failure to exercise, nor any delay in exercising, on the part of any Party, any right or remedy under a Debt Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Debt Document. No election to affirm any Debt Document on the part of a Creditor shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Debt Document are cumulative and not exclusive of any rights or remedies provided by law.

11.4Waiver of defenses

The provisions of this Agreement or any Transaction Security will not be affected by an act, omission, matter or thing which, but for this Clause 11.4, would reduce, release or prejudice the subordination and priorities expressed to be created by this Agreement including (without limitation and whether or not known to any Party):

(a) any time, waiver or consent granted to, or composition with, either Obligor or other person;

(b) the release of either Obligor or any other person under the terms of any composition or arrangement with any creditor of any affiliate;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, either Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any Security;

(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of either Obligor or other person;

(e) any amendment, supplement, extension (whether of maturity or otherwise) or restatement (in each case, however fundamental and of whatsoever nature, and

whether or not more onerous) or replacement of a Debt Document or any other document or security;

(f) any unenforceability, illegality or invalidity of any obligation of any person under any Debt Document or any other document or security;

(g) any intermediate Payment of any of the Liabilities owing to the Creditors in whole or in part; or

(h) any insolvency or similar proceedings.

12. CONSENTS, AMENDMENTS AND OVERRIDE

12.1Required consents

This Agreement may be amended or waived only with the consent of each Party; provided, that the Glovis Countess Agent (for itself and on behalf of the Glovis Countess Creditors who hereby authorizes the Glovis Countess Agent) and the Green Bay Agent (for itself and on behalf of the Green Bay Creditors who hereby authorize the Green Bay Agent) may enter into an amendment, supplement, termination or other modification of this Agreement without the consent of the Obligors, so long as such amendment, supplement, termination or other modification does not impose any duty or responsibility on the Obligors that materially adversely affects them.

12.2Amendments to transaction documents

Neither Creditor shall agree to any amendment to the Facility Agreement or Debt Documents to which it is a party without the express written consent of the other Creditor.

12.3Agreement to override

Unless expressly stated otherwise in this Agreement, this Agreement overrides anything in the Debt Documents to the contrary.

13. Counterparts

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

14.Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by the laws of the State of New York.

15. Enforcement

15.1Jurisdiction

(a)The courts of the State of New York sitting in the Borough of Manhattan in

New York City or of the United States for the Southern District of such State sitting in the Borough of Manhattan in New York City have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute").

(b) The Parties agree that the courts of State of New York sitting in the Borough of Manhattan in New York City or of the United States for the Southern District of such State sitting in the Borough of Manhattan in New York City are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c) This Clause 15.1 is for the benefit of the Creditors only. As a result, no Creditor shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Creditors may take concurrent proceedings in any number of jurisdictions.

[Signature Page Follows]

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.

DVB BANK SE,

as Glovis Countess Agent and as Creditor

By:_____________________________________________________________________________________________________________

Name:

Title:

By:_____________________________________________________________________________________________________________

Name:

Title:

DVB BANK SE,

as Green Bay Agent and as Creditor

By:_____________________________________________________________________________________________________________

Name:

Title:

By:_____________________________________________________________________________________________________________

Name:

Title:

EAST GULF SHIPHOLDING, INC., as Obligor

By:___________________________________________________________________________________________________________

Name:

Title:

INTERNATIONAL SHIPHOLDING CORPORATION, as Obligor

By:___________________________________________________________________________________________________________

Name:

Title:

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: May 8, 2015

/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, 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: May 8, 2015

/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 March 31, 2015 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:  May 8, 2015

/s/ Niels M. 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 March 31, 2015 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: May 8, 2015

/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.

XML

Operating Segments (Reconciliation Of The Totals Reported For The Operating Segments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating Segments [Abstract]
Total Revenues	$ 68,026	$ 72,694
Voyage Expenses	52,211	57,433
Amortization Expense	5,187	5,163
Gross Voyage Profit	11,521	9,990
Vessel Depreciation	5,543	6,721
Other Depreciation	184	184
Gross Profit	5,794	3,085
Administrative and General Expenses	5,022	5,449
Loss on Sale of Other Assets	68
Less: Net Income (Loss) of Unconsolidated Entities	893	(108)
Total Other Operating Expenses	5,983	5,341
Operating Loss	$ (189)	$ (2,256)

XML

Derivative Instruments (Notional Amount Of Foreign Exchange Contracts) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Derivative [Line Items]
Amount Available in Dollars	$ 30,019,000
Foreign Exchange Contract 1 [Member]
Derivative [Line Items]
Transaction Date	2014-09
Amount Available in Dollars	675,000	900,000
Effective Date	2015-01
Expiration Date	2015-12
Foreign Exchange Contract 2 [Member]
Derivative [Line Items]
Transaction Date	2014-10
Amount Available in Dollars	675,000	900,000
Effective Date	2015-01
Expiration Date	2015-12
Foreign Exchange Contract 3 [Member]
Derivative [Line Items]
Transaction Date	2014-12
Amount Available in Dollars	450,000	600,000
Effective Date	2015-01
Expiration Date	2015-12
Foreign Exchange Contract 4 [Member]
Derivative [Line Items]
Transaction Date	2014-05
Amount Available in Dollars	$ 28,219,000
Effective Date	2015-01
Expiration Date	2015-12

XML

Commitments And Contingencies (Details) (USD $) In Millions, unless otherwise specified	Jan. 06, 2015	Jun. 26, 2014 item
Commitments And Contingencies [Line Items]
Deposit and interest collected	$ 4.2
Deposit reclassified to current receivable	3.9
Interest accrued on receivable from customer	0.3
U.S. Customs And Border Protection [Member]
Commitments And Contingencies [Line Items]
Number of affiliates that allegedly failed to properly report the importation of spare parts consumed by vessels		2
Amount of proposed duty		2.1
Amount of proposed penalty on assessment		$ 8.4

XML

Long Term Debt (Narrative) (Details) (USD $)	3 Months Ended			12 Months Ended	1 Months Ended
	Mar. 31, 2015 item	Dec. 31, 2014 item	Mar. 31, 2014	Dec. 31, 2014 item	Dec. 31, 2017	Sep. 30, 2015	Mar. 05, 2015 item	Sep. 24, 2013	Aug. 26, 2014	Aug. 31, 2014
Line of Credit Facility [Line Items]
Senior secured credit facility, current borrowing capacity	$ 95,000,000
Line of credit								50,000,000
Proceeds from borrowings of line of credit	5,000,000		8,000,000
Total principal due	226,043,000	242,888,000		242,888,000
Loss on Extinguishment of Debt	95,000
Number of loan facilities	2
Number of shipping companies	2
Amount of non-amortizing guarantee under second guarantee	1,000,000
Deferred gains from vessel purchase and refinancing transactions						11,300,000
Number of lenders who elected to adjust definition of EBITDA	2
Line of credit, increase	15,000,000
Number of lessors who agreed to defer the date when a more stringent leverage ratio and increased liquidity would be attained	2
Number of non-performing assets identified		5
Number of assets held for sale impairment was recorded on		1
Increase in valuation allowance	730,000
Number of held for sale assets sold prior to December 31, 2014				1
Number of held for sale assets sale was finalized for							1
Number of held for sale assets being actively marketed	3
Possible amount to refinance certain unencumbered assets	12,000,000
Possible amount of bank financing for construction and renovation of future corporate office	6,900,000
Incentives from the State of Louisiana	4,600,000
Incentives from the State of Louisiana expected to receive during 2015	600,000
Amount of remaining cost of building construction to be funded by cash on hand	6,900,000
Total amount paid off	2,500,000		8,000,000
Scenario, Forecast [Member]
Line of Credit Facility [Line Items]
Amount of non-amortizing guarantee under second guarantee					510,000
Loan Agreement [Member] | DVB Bank SE [Member]
Line of Credit Facility [Line Items]
Term loan facility principal amount									38,500,000
Loan Agreement [Member] | RBS Asset Finance [Member]
Line of Credit Facility [Line Items]
Term loan facility principal amount										23,000,000
Senior Secured Credit Facility [Member]
Line of Credit Facility [Line Items]
Term loan facility principal amount	45,000,000							45,000,000
Line of credit	50,000,000
Total principal due	41,000,000
Additional Term Loan [Member]
Line of Credit Facility [Line Items]
Proceeds from borrowings of line of credit	50,000,000
Standby Letters Of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	20,000,000							20,000,000
Swingline Loans [Member]
Line of Credit Facility [Line Items]
Line of credit	5,000,000							5,000,000
Line Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Amount Outstanding	7,600,000
Line of Credit Facility, Remaining Borrowing Capacity	1,400,000
Consolidated Leverage Ratio	5.00%
Minimum fixed charge coverage ratio	1.05%
Minimum Liquidity Amount	20,000,000
Minimum Net Worth	228,000,000
Consolidated Net Income Earned	50.00%
Percent Of The Proceeds Of Issuances Of Equity Interests Received	100.00%
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	1.20%
Future Minimum Fixed Charge Coverage Ratio after June 30, 2016	1.25%
Future fixed charge coverage ratio through fiscal year 2015	1.05%
Future fixed charge coverage ratio beginning with the quarter ending March 31, 2016	1.15%
Future fixed charge coverage ratio beginning with the quarter ending June 30, 2016 and for all periods thereafter	1.20%
Loan Facility A [Member]
Line of Credit Facility [Line Items]
Percentage of equity position	25.00%
Percentage of equity position guaranteed	5.00%
Amount of guarantee	3,600,000			3,600,000
Semi-annual reduction in guarantee through December 2018	165,000
Loan Facility B [Member]
Line of Credit Facility [Line Items]
Percentage of equity position	23.70%
Amount of non-amortizing guarantee	1,000,000
Amount of facility covered by overall bank guarantee	11,000,000
Handysize Vessel [Member]
Line of Credit Facility [Line Items]
Related debt paid off	$ 13,500,000

XML

Assets Held For Sale (Details) (USD $)	3 Months Ended
	Mar. 31, 2015 item	Dec. 31, 2014 item
Property, Plant and Equipment [Line Items]
Long Term Assets Held for Sale	$ 32,486,000	$ 48,701,000
Short Term Assets Held for Sale	6,778,000	6,976,000
Handysize Vessel [Member]
Property, Plant and Equipment [Line Items]
Number of vessels held for sale		3
Long Term Assets Held for Sale	32,500,000	48,700,000
Number of vessels sold	1
Debt incurred to purchase vessels	27,000,000
Jones Act Tug-Barge [Member]
Property, Plant and Equipment [Line Items]
Number of vessels held for sale		1
Tug-Barge Unit And Inventory Related To Handysize Vessels [Member]
Property, Plant and Equipment [Line Items]
Short Term Assets Held for Sale	6,800,000	7,000,000
Depreciation expense	$ 0

XML

Long Term Debt (Tables)

3 Months Ended

Mar. 31, 2015

Long Term Debt [Abstract]

Schedule Of Long-Term Debt

(All Amount in Thousands)	Interest Rate					Total Principal Due
	March 31,		December 31,		Maturity	March 31,		December 31,
Description of Secured Debt	2015		2014		Date	2015		2014
Notes Payable – Variable Rate 1	2.7703	%	2.7471	%	2018	$	11,166	$	12,025
Notes Payable – Variable Rate	2.675-2.714	%	2.7312-2.7324	%	2018		26,986		41,400
Notes Payable – Variable Rate	2.5219	%	2.5050	%	2017		8,584		9,144
Notes Payable – Variable Rate 1	2.7561	%	2.7350	%	2018		15,080		15,394
Notes Payable – Variable Rate 2	3.6100	%	3.6100	%	2020		24,020		24,812
Notes Payable – Variable Rate 3	4.0100	%	3.9900	%	2018		41,063		41,906
Notes Payable – Fixed Rate 4	4.3500	%	4.3500	%	2020		37,019		37,759
Notes Payable – Variable Rate 5	2.9220	%	2.9195	%	2021		21,120		21,943
Note Payable - Mortgage 6							5		5
Line of Credit 3	3.9700	%	3.9100	%	2018		41,000		38,500
							226,043		242,888
			Less: Current Maturities				(22,412)		(23,367)
						$	203,631	$	219,521

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch in June 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 in June 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.  This loan requires us to pre-fund a one-third portion of the upcoming quarterly scheduled debt payment, which, at March 31, 2015, constituted $0.4 million and is included as restricted cash on the balance sheet.

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.

XML

Other Long Term Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other Long Term Liabilities [Abstract]
Deferred Gains, net of Amortization	$ 16,970	$ 17,917
Pension and Post Retirement	12,221	12,497
Alabama Lease Incentive	5,452	5,739
Insurance Reserves	5,319	4,941
Derivatives	6,911	7,050
Deferred Tax Liability	235	408
Other	1,862	1,732
Other Long Term Liabilities	$ 48,970	$ 50,284

XML

Change In Accounting Estimate

3 Months Ended

Mar. 31, 2015

Change In Accounting Estimate [Abstract]

Change In Accounting Estimate

NOTE 19 – CHANGE IN ACCOUNTING ESTIMATE

Based on company policy, we review the reasonableness of our salvage values every three years based on the most recent three year average price of scrap steel per metric ton. In the first quarter of 2015, we reviewed and adjusted the salvage values based on changes in the market value of scrap steel. This adjustment resulted in a decrease in salvage values of approximately $0.6 million. The impact of this adjustment on depreciation expense for the first quarter of 2015, as well as for future periods, was immaterial.

XML

Employee Benefit Plans (Components Of Net Periodic Benefit Cost) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 171	$ 154
Interest cost	359	381
Expected return on plan assets	(638)	(655)
Amortization of prior service cost	(1)	(1)
Amortization of Net Loss	111	63
Net periodic benefit cost (benefit)	2	(58)
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	8	3
Interest cost	118	145
Amortization of prior service cost	26	25
Amortization of Net Loss	37	88
Net periodic benefit cost (benefit)	$ 189	$ 261

XML

Unconsolidated Entities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Payment for investment in Unconsolidated Entities		$ 5,814
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			5,800
Saltholmen Shipping Ltd. [Member] | Chemical Tankers [Member]
Schedule of Equity Method Investments [Line Items]
Number of vessels owned or operated	2
Brattholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Equity investee ownership interest			30.00%
Payment for investment in Unconsolidated Entities			$ 2,100
Brattholmen Shipping Ltd. [Member] | Asphalt Tankers [Member]
Schedule of Equity Method Investments [Line Items]
Number of vessels owned or operated	2

XML

Basis Of Presentation (Details)	3 Months Ended
	Mar. 31, 2015
Basis Of Presentation [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%

XML

Derivative Instruments (Notional And Fair Value Of Derivative Instruments) (Details) (USD $)	Mar. 31, 2015
Derivatives, Fair Value [Line Items]
Derivatives, current notional amount	$ 30,019,000
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivatives, current notional amount	66,613,000
Liability derivatives, fair value	(7,093,000)
Interest Rate Swap - LT [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivatives, current notional amount	36,594,000
Foreign Exchange Contract 1 [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivatives, current notional amount	1,800,000
Foreign Exchange Contract 2 [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivatives, current notional amount	28,219,000
Other Liabilities [Member] | Interest Rate Swap - LT [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives, fair value	(2,757,000)
Other Liabilities [Member] | Foreign Exchange Contract 2 [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives, fair value	(4,154,000)
Current Liabilities [Member] | Foreign Exchange Contract 1 [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives, fair value	$ (182,000)

XML

Stockholders' Equity (Cash Dividends Paid) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Dividends Payable [Line Items]
Total Dividend Paid	$ 1,305
Common Stock [Member]
Dividends Payable [Line Items]
Declaration Date	Jan. 07, 2015
Record Date	Feb. 19, 2015
Payment Date	Mar. 04, 2015
Per Share Amount (in dollars per share)	$ 0.25
Total Dividend Paid	1,828
Preferred Stock [Member]
Dividends Payable [Line Items]
Total Dividend Paid	1,305
9.50% Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Declaration Date	Jan. 07, 2015
Record Date	Jan. 29, 2015
Payment Date	Jan. 30, 2015
Per Share Amount (in dollars per share)	$ 2.375
Total Dividend Paid	594
9.00% Series B Preferred Stock [Member]
Dividends Payable [Line Items]
Declaration Date	Jan. 07, 2015
Record Date	Jan. 29, 2015
Payment Date	Jan. 30, 2015
Per Share Amount (in dollars per share)	$ 2.250
Total Dividend Paid	$ 711

XML

Income Taxes (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Taxes [Abstract]
Provision (benefit) for income taxes	$ 39,000	$ (882,000)
(Loss) income before taxes and equity in net loss unconsolidated entities	(5,355,000)	(3,991,000)
Increase in valuation allowance	$ 730,000

XML

Loss On Sale Of Assets

3 Months Ended

Mar. 31, 2015

Loss On Sale Of Assets [Abstract]

Loss On Sale Of Assets

NOTE 3 – LOSS ON SALE OF ASSETS

During the first quarter of 2015, we sold a 36,000 dead weight ton Handysize vessel and its related equipment.  We received $16.4 million, net of commissions and other costs to sell, and recorded a loss on sale of asset of approximately $68,000 during the quarter.  This vessel was included in Assets Held for Sale at December 31, 2014.  Additionally, we paid off related debt of approximately $13.5 million and recorded a loss on extinguishment of debt of approximately $95,000.

XML

Fair Value Measurements (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liabilities	$ (7,093,000)	$ (7,348,000)
Long-term debt, fair value	227,900,000
Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liabilities
Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liabilities	(7,093,000)	(7,348,000)
Level 3 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liabilities

XML

Unconsolidated Entities (Summarized Equity In Net Income (Loss) Of Unconsolidated Entities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	$ 893	$ (108)
Oslo Bulk, AS [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	515	(62)
Oslo Bulk Holding Pte, Ltd (formerly Tony Bulkers) [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	120	(18)
Terminales Transgolfo, S.A. DE C.V. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	(74)	(28)
Saltholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	251
Brattholmen Shipping Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Total Equity in Net Income (Loss) of Unconsolidated Entities	$ 81

XML

Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2015

Unconsolidated Entities [Abstract]

Summarized Equity In Net Income (Loss) Of Unconsolidated Entities

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Oslo Bulk, AS	$	515	$	(62)
Oslo Bulk Holding Pte. Ltd (formerly Tony Bulkers)		120		(18)
Terminales Transgolfo,  S.A. de C.V.		(74)		(28)
Saltholmen Shipping Ltd		251		-
Brattholmen Shipping Ltd		81		-
Total Equity in Net Income (Loss) of Unconsolidated Entities	$	893	$	(108)

XML

Inventory (Tables)

3 Months Ended

Mar. 31, 2015

Inventory [Abstract]

Inventory By Class

(All Amounts in Thousands)		March 31,		December 31,
Inventory Classes		2015		2014
Spare Parts Inventory	$	3,296	$	3,253
Fuel Inventory		2,320		3,967
Warehouse Inventory		2,518		2,540
Total	$	8,134	$	9,760

XML

Long Term Debt (Schedule Of Long-Term Debt) (Details) (USD $)	1 Months Ended	3 Months Ended			0 Months Ended	1 Months Ended		12 Months Ended		0 Months Ended
	Aug. 31, 2014	Mar. 31, 2015		Mar. 31, 2014	Jun. 20, 2011	Jan. 24, 2012	Nov. 30, 2011	Dec. 31, 2014		Aug. 26, 2014 item	Sep. 24, 2013
Debt Instrument [Line Items]
Total Principal Due		$ 226,043,000						$ 242,888,000
Less current maturities		(22,412,000)						(23,367,000)
Long-term debt - non-current		203,631,000						219,521,000
Proceeds from borrowings of line of credit		5,000,000		8,000,000
Line of credit											50,000,000
Bank debt owed to DnB ASA paid off	11,400,000
Notes Payable - Variable Rate 2018a [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		2.7703%	[1]					2.7471%	[1]
Maturity date		2018	[1]
Total Principal Due		11,166,000	[1]					12,025,000	[1]
Business acquisition interest in acquiree					100.00%
Proceeds from borrowings of line of credit					24,100,000
Notes Payable - Variable Rate 2018b [Member]
Debt Instrument [Line Items]
Interest rate, minimum (in hundredths)		2.675%						2.7312%
Interest rate, maximum (in hundredths)		2.714%						2.7324%
Maturity date		2018
Total Principal Due		26,986,000						41,400,000
Proceeds from borrowings of line of credit					23,300,000	12,700,000	6,100,000
Notes Payable - Variable Rate 2017 [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		2.5219%						2.505%
Maturity date		2017
Total Principal Due		8,584,000						9,144,000
Notes Payable - Variable Rate 2018c [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		2.7561%	[1]					2.735%	[1]
Maturity date		2018	[1]
Total Principal Due		15,080,000	[1]					15,394,000	[1]
Notes Payable - Variable Rate 2020 [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		3.61%	[2]					3.61%	[2]
Maturity date		2020	[2]
Total Principal Due		24,020,000	[2]					24,812,000	[2]
Interest rate swap , fixed interest rate (in hundredths)		2.065%
Effective, swaption interest rate (in hundredths)		5.565%
Notes Payable - Variable Rate 2018d [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		4.01%	[3]					3.99%	[3]
Maturity date		2018	[3]
Total Principal Due		41,063,000	[3]					41,906,000	[3]
Notes Payable - Fixed Rate 2020 [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		4.35%	[4]					4.35%	[4]
Maturity date		2020	[4]
Total Principal Due		37,019,000	[4]					37,759,000	[4]
Notes Payable - Variable Rate 2021 [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		2.922%	[5]					2.9195%	[5]
Maturity date		2021	[5]
Total Principal Due		21,120,000	[5]					21,943,000	[5]
Note Payable - Mortgage [Member]
Debt Instrument [Line Items]
Total Principal Due		5,000	[6]					5,000	[6]
Line Of Credit Facility [Member]
Debt Instrument [Line Items]
Interest rate (in hundredths)		3.97%	[3]					3.91%	[3]
Maturity date		2018	[3]
Total Principal Due		41,000,000	[3]					38,500,000	[3]
Senior Secured Credit Facility [Member]
Debt Instrument [Line Items]
Total Principal Due		41,000,000
Term loan facility principal amount		45,000,000									45,000,000
Line of credit		50,000,000
Standby Letters Of Credit [Member]
Debt Instrument [Line Items]
Line of credit		20,000,000									20,000,000
Swingline Loans [Member]
Debt Instrument [Line Items]
Line of credit		5,000,000									5,000,000
Loan Agreement [Member]
Debt Instrument [Line Items]
One third pre-month funding of upcoming quarterly debt payment, amount		400,000
ING Bank [Member]
Debt Instrument [Line Items]
Term of financing agreement in years		7 years
Number of tranches					2
DVB Bank SE [Member] | Loan Agreement [Member]
Debt Instrument [Line Items]
Term loan facility principal amount										38,500,000
Number of quarterly payments										24
Final quarterly balloon payment										20,700,000
RBS Asset Finance [Member] | Loan Agreement [Member]
Debt Instrument [Line Items]
Term loan facility principal amount	$ 23,000,000
Basis spread on variable interest rate	2.75%
Number of monthly payments	84

[1] We entered into a variable rate financing agreement with ING Bank N.V., London branch in June 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 in June 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. This loan requires us to pre-fund a one-third portion of the upcoming quarterly scheduled debt payment, which, at March 31, 2015, constituted $0.4 million and is included as restricted cash on the balance sheet.

[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.

XML

Goodwill, Other Intangible Assets, And Deferred Charges (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Goodwill And Other Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 626	$ 1,029
Amortization expense for deferred charges	$ 4,840	$ 4,286

XML

Goodwill, Other Intangible Assets, And Deferred Charges (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill, Other Intangible Assets, And Deferred Charges [Abstract]

Schedule Of Goodwill, Other Intangible Assets, And Deferred Charges

(All Amounts in Thousands)			Balance at										Balance at
	Amortization		December 31,		Cash						Non-Cash		March 31,
	Period		2014		Additions		Disposals		Amortization		Reclassifications		2015
Indefinite Life Intangibles
Goodwill		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	57	$	-	$	-	$	(1)	$	-	$	56
Trade names - UOS	144 months		1,357		-		-		(34)		-		1,323
Customer Relationships - FSI	240 months		375		-		-		(5)		-		370
Customer Relationships - UOS	144 months		23,253		-		-		(586)		-		22,667
Total Definite Life Intangibles		$	25,042	$	-	$	-	$	(626)	$	-	$	24,416
Deferred Charges
Drydocking Costs	various	$	25,238	$	5,515	$	-	$	(4,560)	$	(831)	$	25,362
Financing Charges and Other	various		3,419		28		(95)		(280)		526		3,598
Total Deferred Charges		$	28,657	$	5,543	$	(95)	$	(4,840)	$	(305)	$	28,960

XML

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2015

Employee Benefit Plans [Abstract]

Components Of Net Periodic Benefit Cost

(All Amounts in Thousands)		Pension Plan				Postretirement Benefits
		Three Months Ended March 31,				Three Months Ended March 31,
Components of net periodic benefit cost:		2015		2014		2015		2014
Service cost	$	171	$	154	$	8	$	3
Interest cost		359		381		118		145
Expected return on plan assets		(638)		(655)		-		-
Amortization of prior service cost		(1)		(1)		26		25
Amortization of Net Loss		111		63		37		88
Net periodic benefit cost (benefit)	$	2	$	(58)	$	189	$	261

XML

Operating Segments

3 Months Ended

Mar. 31, 2015

Operating Segments [Abstract]

Operating Segments

NOTE 2 – 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) loss of extinguishment of debt, (vii) other income from vessel financing, (viii) investment income, and (ix) 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 March 31, 2015 and 2014:

RESULTS OF OPERATIONS

three MONTHS ENDED MARCH 31, 2015

COMPARED TO THE three MONTHS ENDED MARCH 31, 2014

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	24,595		$	14,247		$	1,868		$	-		$	10,571		$	-	$	51,281
Variable Revenue		-			7,533			1,255			7,785			185			(13)		16,745
Total Revenue from External Customers		24,595			21,780			3,123			7,785			10,756			(13)		68,026
Voyage Expenses		18,590			17,020			2,580			6,886			7,557			(422)		52,211
Amortization Expense		3,828			715			61			285			298			-		5,187
Loss (Income) of Unconsolidated Entities		-			-			(635)			74			(332)			-		(893)
Gross Voyage Profit	$	2,177		$	4,045		$	1,117		$	540		$	3,233		$	409	$	11,521
Gross Voyage Profit Margin		9	%		19	%		36	%		7	%		30	%		-		17	%
2014
Fixed Revenue	$	29,100		$	15,615		$	1,526		$	-		$	8,702		$	-	$	54,943
Variable Revenue		-			3,941			3,590			7,926			2,248			46		17,751
Total Revenue from External Customers		29,100			19,556			5,116			7,926			10,950			46		72,694
Voyage Expenses		21,209			16,663			3,566			6,846			9,476			(327)		57,433
Amortization Expense		3,667			535			77			160			724			-		5,163
Loss of Unconsolidated Entities		-			-			80			28			-			-		108
Gross Voyage Profit	$	4,224		$	2,358		$	1,393		$	892		$	750		$	373	$	9,990
Gross Voyage Profit Margin		15	%		12	%		27	%		11	%		7	%		-		14	%

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

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Revenues	$	68,026	$	72,694
Voyage Expenses		52,211		57,433
Amortization Expense		5,187		5,163
Net (Income) Loss of Unconsolidated Entities		(893)		108
Gross Voyage Profit		11,521		9,990
Vessel Depreciation		5,543		6,721
Other Depreciation		184		184
Gross Profit		5,794		3,085
Other Operating Expenses:
Administrative and General Expenses		5,022		5,449
Loss on Sale of Other Assets		68		-
Less:  Net Income (Loss) of Unconsolidated Entities		893		(108)
Total Other Operating Expenses		5,983		5,341
Operating Loss	$	(189)	$	(2,256)

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments [Abstract]

Notional And Fair Value Of Derivative Instruments

(All Amounts in Thousands)			Liability Derivatives
	Current Notional		Balance Sheet	Fair
	Amount		Location	Value
Interest Rate Swaps - L/T	$	36,594	Other Liabilities	$	(2,757)
Foreign Exchange Contracts		1,800	Current Liabilities		(182)
Foreign Exchange Contracts		28,219	Other Liabilities		(4,154)
Total Derivatives designated as hedging instruments	$	66,613		$	(7,093)

Derivative Instruments, Effect On Other Comprehensive Income (Loss)

(All Amounts in Thousands)			Location of	Amount of		Gain (Loss)
	Gain (Loss)		Gain (Loss)	Gain (Loss)		Recognized in
	Recognized		Reclassified from	Reclassified from		Income from
	in OCI*		AOCI** to Income	AOCI to Income		Ineffective Portion
Interest Rate Swaps	$	243	Interest Expense	$	484	$	49
De-Designation of Interest Rate Swaps		2,859			-		(2,859)
Foreign Exchange Contracts		(3)	Other Revenues		99		-
Total	$	3,099		$	583	$	(2,810)

*Other Comprehensive (Loss) Income

**Accumulated Other Comprehensive Income

Notional Amount Of Foreign Exchange Contracts

(All Amounts in Thousands)
			Amount Available
Transaction Date	Type of Currency		in Dollars	Effective Date	Expiration Date
May-14	Yen	$	28,219	Jan-15	Dec-15
Sep-14	Peso		675	Jan-15	Dec-15
Oct-14	Peso		675	Jan-15	Dec-15
Dec-14	Peso		450	Jan-15	Dec-15
		$	30,019

XML

Loss On Sale Of Assets (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Property, Plant and Equipment [Line Items]
Loss on Sale of Other Assets	$ 68,000
Loss on Extinguishment of Debt	95,000
Handysize Vessel [Member]
Property, Plant and Equipment [Line Items]
Proceeds from sale of other assets	16,400,000
Weight of vessel sold	36,000
Related debt paid off	$ 13,500,000

XML

Derivative Instruments (Derivative Instruments, Effect On Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	$ 3,099	[1]
Amount of Gain (Loss) Reclassified from AOCI to Income	583
Gain/(Loss) Recognized in Income from Ineffective portion	(2,810)
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	243	[1]
Amount of Gain (Loss) Reclassified from AOCI to Income	484
Gain/(Loss) Recognized in Income from Ineffective portion	49
De-Designation Of Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	2,859	[1]
Gain/(Loss) Recognized in Income from Ineffective portion	(2,859)
Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI	(3)	[1]
Amount of Gain (Loss) Reclassified from AOCI to Income	$ 99

[1] Other Comprehensive (Loss) Income

XML

Condensed Consolidated Statements Of Operations (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Condensed Consolidated Statements Of Operations [Abstract]
Revenues	$ 68,026,000	$ 72,694,000
Operating Expenses:
Voyage Expenses	52,211,000	57,433,000
Amortization Expense	5,187,000	5,163,000
Vessel Depreciation	5,543,000	6,721,000
Other Depreciation	184,000	184,000
Administrative and General Expenses	5,022,000	5,449,000
Loss on Sale of Other Assets	68,000
Total Operating Expenses	68,215,000	74,950,000
Operating Loss	(189,000)	(2,256,000)
Interest and Other:
Interest Expense	2,668,000	2,145,000
Derivative Loss	2,810,000	14,000
Loss on Extinguishment of Debt	95,000
Other Income from Vessel Financing	(445,000)	(489,000)
Investment Income	(7,000)	(19,000)
Foreign Exchange Loss	45,000	84,000
Total Interest and Other Income	5,166,000	1,735,000
Loss Before Provision (Benefit) for Income Taxes and Equity in Net Income (Loss) of Unconsolidated Entities	(5,355,000)	(3,991,000)
Provision (Benefit) for Income Taxes	39,000	(882,000)
Equity in Net Income (Loss) of Unconsolidated Entities (Net of Applicable Taxes)	893,000	(108,000)
Net Loss	(4,501,000)	(3,217,000)
Preferred Stock Dividends	1,305,000	1,305,000
Net Loss Attributable to Common Stockholders	$ (5,806,000)	$ (4,522,000)
Loss Per Common Share:
Basic (in dollars per share)	$ (0.79)	$ (0.62)
Diluted (in dollars per share)	$ (0.79)	$ (0.62)
Weighted Average Shares of Common Stock Outstanding:
Basic (in shares)	7,308,482	7,252,075
Diluted (in shares)	7,308,482	7,252,075
Common Stock Dividends Per Share (in dollars per share)	$ 0.25	$ 0.25

XML

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
	Mar. 31, 2015	Mar. 31, 2014
Goodwill And Other Intangible Assets [Line Items]
Goodwill, Beginning Balance	$ 2,735
Goodwill, Ending Balance	2,735
Total Indefinite Life Intangibles, Beginning Balance	2,735
Total Indefinite Life Intangibles, Ending Balance	2,735
Definite Life Intangibles, Beginning Balance	25,042
Definite Life Intangibles, Amortization	(626)	(1,029)
Definite Life Intangibles, Ending Balance	24,416
Drydocking Costs, Beginning Balance	25,238
Drydocking Costs, Cash Additions	5,515
Drydocking Costs, Amortization	(4,560)
Drydocking Costs, Non-Cash Reclassifications	(831)
Drydocking Costs, Ending Balance	25,362
Financing Charges and Other, Beginning Balance	3,419
Financing Charges and Other, Cash Additions	28
Financing Charges and Other, Disposals	(95)
Financing Charges and Other, Amortization	(280)
Financing Charges and Other, Non-Cash Reclassifications	526
Financing Charges and Other, Ending Balance	3,598
Total Deferred Charges, Beginning Balance	28,657
Total Deferred Charges, Cash Additions	5,543
Total Deferred Charges, Disposals	(95)
Total Deferred Charges, Amortization	(4,840)
Total Deferred Charges, Non-Cash Reclassifications	(305)
Total Deferred Charges, Ending Balance	28,960
Trade Names [Member] | Frascati Shops, Inc. And Tower, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	240 months
Definite Life Intangibles, Beginning Balance	57
Definite Life Intangibles, Amortization	(1)
Definite Life Intangibles, Ending Balance	56
Trade Names [Member] | United Ocean Services, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	144 months
Definite Life Intangibles, Beginning Balance	1,357
Definite Life Intangibles, Amortization	(34)
Definite Life Intangibles, Ending Balance	1,323
Customer Relationships [Member] | Frascati Shops, Inc. And Tower, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	240 months
Definite Life Intangibles, Beginning Balance	375
Definite Life Intangibles, Amortization	(5)
Definite Life Intangibles, Ending Balance	370
Customer Relationships [Member] | United Ocean Services, LLC [Member]
Goodwill And Other Intangible Assets [Line Items]
Amortization period	144 months
Definite Life Intangibles, Beginning Balance	23,253
Definite Life Intangibles, Amortization	(586)
Definite Life Intangibles, Ending Balance	$ 22,667

XML

Condensed Consolidated Statements Of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities:
Net Loss	$ (4,501,000)	$ (3,217,000)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
Depreciation	5,727,000	6,905,000
Amortization of Deferred Charges	4,840,000	4,286,000
Amortization of Intangible Assets	626,000	1,029,000
Deferred Tax		(905,000)
Non-Cash Share Based Compensation	2,000	447,000
Equity in Net (Income) Loss of Unconsolidated Entities	(893,000)	108,000
Loss on Sale of Assets	68,000
Loss on Extinguishment of Debt	95,000
Loss on Foreign Currency Exchange	45,000	84,000
Loss on Derivatives	2,810,000	14,000
Other Reconciling Items, net	(838,000)	(1,387,000)
Changes in operating assets and liabilities, net of acquisitions:
Deferred Drydocking Charges	(5,515,000)	(1,775,000)
Accounts Receivable	(878,000)	3,620,000
Inventory and Other Current Assets	3,906,000	2,006,000
Other Assets		(500,000)
Accounts Payable and Accrued Liabilities	(3,839,000)	(2,020,000)
Other Long-Term Liabilities	250,000	(1,197,000)
Net Cash Provided by Operating Activities	1,905,000	7,498,000
Cash Flows from Investing Activities:
Purchases of and Capital Improvements to Property and Equipment	(3,250,000)	(5,884,000)
Investment in Unconsolidated Entities		(5,814,000)
Net Change in Restricted Cash Account	1,003,000	2,499,000
Cash Proceeds from the State of Louisiana	122,000
Cash Proceeds from Sale of Assets	16,355,000
Cash Proceeds from Receivable Settlement	3,890,000
Proceeds from Payments on Note Receivables	670,000	1,062,000
Net Cash Provided by (Used In) Investing Activities	18,790,000	(8,137,000)
Cash Flows from Financing Activities:
Proceeds from Line of Credit	5,000,000	8,000,000
Payments on Line of Credit	(2,500,000)	(8,000,000)
Principal Payments on Long Term Debt	(19,384,000)	(4,755,000)
Additions to Deferred Financing Charges	(28,000)	(62,000)
Dividends Paid	(3,133,000)	(3,119,000)
Net Cash Used in Financing Activities	(20,045,000)	(7,936,000)
Net Increase (Decrease) in Cash and Cash Equivalents	650,000	(8,575,000)
Cash and Cash Equivalents at Beginning of Period	21,133,000	20,010,000
Cash and Cash Equivalents at End of Period	21,783,000	11,435,000
Supplemental disclosure of non-cash investing activities:
Additions to vessels, property, plant and equipment included in accounts payable and other accrued expenses	$ 823,000

XML

Stockholders' Equity (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Jun. 30, 2010	Dec. 31, 2008	Mar. 31, 2015	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
Maximum number of shares that may yet be purchased			285,377

XML

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Summary Of Changes In Stockholders' Equity

(All Amounts in Thousands)	Stockholders'
	Equity
Balance at December 31, 2014	$	267,610
Net Loss		(4,501)
Common Stock Dividends*		(1,862)
Preferred Stock Dividends		(1,305)
Unrealized Foreign Currency Translation Gain		(61)
Net Change in Fair Value of Derivatives		240
De-Designation of Interest Rate Swap		2,859
Net Change in Funding Status of Defined Benefit Plan		304
Issuance of stock-based compensation		2
Balance at March 31, 2015	$	263,286

*Includes approximately $34,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Cash Dividends Paid

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	19-Feb-15	4-Mar-15	$	0.25	$	1,828

During the three months ended March 31, 2015, we paid cash dividends on our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Series	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	29-Jan-15	A	30-Jan-15	$	2.375	$	594
7-Jan-15	29-Jan-15	B	30-Jan-15	$	2.250	$	711
						$	1,305

XML

Loss Per Share

3 Months Ended

Mar. 31, 2015

Loss Per Share [Abstract]

Loss Per Share

NOTE 16 – LOSS PER SHARE

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of the conversion of restricted stock units. We had net losses attributable to common stockholders for the three months ending March 31, 2015 and 2014; therefore, the impact of any incremental shares issuable under our outstanding restricted stock units because the net loss with respect to such shares would have been anti-dilutive.

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

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)	March 31, 2015
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,093)	$	-	$	(7,093)
(All Amounts in Thousands)	December 31, 2014
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,348)	$	-	$	(7,348)

XML

New Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

NOTE 18 – NEW ACCOUNTING PRONOUNCEMENTS

In February 2015, the FASB issued ASU 2015-02 “Amendments to the Consolidation Analysis”. The amendments in ASU 2015-02 affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The adoption of ASU 2015-02 is not expected to have material impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 “Simplifying the Presentation of Debt Issuance Costs”. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. ASU 2015-03 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. Management is currently in the process of evaluating the impact of this amendment.

Management reviewed all other significant newly issued accounting pronouncements and concluded that they are either not applicable to our business or that we do not expect their future adoption to have a material effect is expected on our condensed consolidated financial statements.

XML

Basis Of Presentation

3 Months Ended

Mar. 31, 2015

Basis Of Presentation [Abstract]

Basis Of Presentation

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2015

NOTE 1 - BASIS OF PRESENTATION

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 recommend 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, 2014.  The condensed consolidated balance sheet as of December 31, 2014 included in this report has been derived from the audited financial statements at that date.

The foregoing 2015 interim results are not necessarily indicative of the results of operations for the full year 2015.  Management believes that it has made all adjustments necessary, consisting only of normal recurring adjustments, for a fair statement of the information presented.

The accompanying financial statements include the accounts of International Shipholding Corporation and its majority owned subsidiaries.  Intercompany accounts and transactions have been eliminated in consolidation.  Our policy is to consolidate all subsidiaries 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 interest and have the ability to exercise significant influence over their 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.  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 previously reported amounts have been reclassified to conform to the 2015 presentation.  Specifically, drydock amortization, which was previously included in voyage expense, is now included in amortization expense, and miscellaneous depreciation expense, which was previously included in voyage expense and administrative and general expense, is now included in other depreciation expense in the Condensed Consolidated Statements of Operations and other tables herein (see Note 6 – Goodwill, Other Intangible Assets, and Deferred Charges).

XML

Condensed Consolidated Statements Of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Condensed Consolidated Statements Of Comprehensive Loss [Abstract]
Net Loss	$ (4,501)	$ (3,217)
Other Comprehensive (Loss)/Income:
Unrealized Foreign Currency Translation Loss	(61)	(25)
Change in Fair Value of Derivatives	240	9
De-Designation of Interest Rate Swap	2,859
Change in Funding Status of Defined Benefit Plan	304	175
Comprehensive Loss	$ (1,159)	$ (3,058)

XML

Derivative Instruments

3 Months Ended

Mar. 31, 2015

Derivative Instruments [Abstract]

Derivative Instruments

NOTE 11 – 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 a liability of $7.1 million in the aggregate for all of our contracts as of March 31, 2015 (see table below).  As of March 31, 2015, we were expecting to refinance our Yen-based credit facility with a U.S. dollar facility.  Interest payable under the Yen-based loan was fixed after we entered into a variable-to-fixed interest rate swap in 2009.  Due to our determination at March 31, 2015 that it was more likely than not that the Yen-based loan would be refinanced, the interest rate swap became totally ineffective at March 31, 2015.  As a result, we recorded a $2.8 million charge to derivative loss on our condensed consolidated statement of operations with the offset to other comprehensive loss.  For more information on the refinancing of the Yen-based facility, see Note 20 – Subsequent Event.  The unrealized loss related to our derivative instruments included in accumulated other comprehensive loss, net of taxes, was $0.6 million and $3.7 million as of March 31, 2015 and December 31, 2014, respectively.

The notional and fair value amounts of our derivative instruments as of March 31, 2015 were as follows:

(All Amounts in Thousands)			Liability Derivatives
	Current Notional		Balance Sheet	Fair
	Amount		Location	Value
Interest Rate Swaps - L/T	$	36,594	Other Liabilities	$	(2,757)
Foreign Exchange Contracts		1,800	Current Liabilities		(182)
Foreign Exchange Contracts		28,219	Other Liabilities		(4,154)
Total Derivatives designated as hedging instruments	$	66,613		$	(7,093)

The effect of derivative instruments designated as cash flow hedges on our condensed consolidated statement of operations for the three months ended March 31, 2015 were as follows:

(All Amounts in Thousands)			Location of	Amount of		Gain (Loss)
	Gain (Loss)		Gain (Loss)	Gain (Loss)		Recognized in
	Recognized		Reclassified from	Reclassified from		Income from
	in OCI*		AOCI** to Income	AOCI to Income		Ineffective Portion
Interest Rate Swaps	$	243	Interest Expense	$	484	$	49
De-Designation of Interest Rate Swaps		2,859			-		(2,859)
Foreign Exchange Contracts		(3)	Other Revenues		99		-
Total	$	3,099		$	583	$	(2,810)

*Other Comprehensive (Loss) Income

**Accumulated Other Comprehensive Income

Foreign Currency Contracts 

From time to time, we enter into foreign exchange contracts to hedge certain firm foreign currency purchase commitments.  During 2014, we entered into three forward purchase contracts for Mexican Pesos, which expire in December 2015, two for $900,000 U.S. Dollar equivalents at an average exchange rate of 13.6007 and 13.7503, respectively, and another for $600,000 U.S. Dollar equivalents at an exchange rate of 14.1934.  Our Mexican Peso foreign exchange contracts cover approximately 85% of our projected Peso exposure. 

Over the past couple of years, we have entered into and extended several forward foreign exchange contracts in order to limit our exposure to fluctuations in the Yen and to provide us with the option to fully pay off our current Yen Facility at an approximate exchange rate of 102.25 to $1.00.  The contracts that remain in effect and related agreements with the lender provided us with the option to convert the Yen Facility into a USD-based Facility with the lender at this fixed exchange rate, but otherwise on the same terms and with the same collateral.  These particular forward foreign exchange contracts do not qualify for hedge accounting treatment and have thus been accounted for as economic hedges.  Please refer to Note 20 – Subsequent Event for information related to the settlement of these hedging contracts.

The following table summarizes the remaining notional values as of March 31, 2015, of these contracts:

(All Amounts in Thousands)
			Amount Available
Transaction Date	Type of Currency		in Dollars	Effective Date	Expiration Date
May-14	Yen	$	28,219	Jan-15	Dec-15
Sep-14	Peso		675	Jan-15	Dec-15
Oct-14	Peso		675	Jan-15	Dec-15
Dec-14	Peso		450	Jan-15	Dec-15
		$	30,019

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
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		7,309,757
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015

XML

Long Term Debt

3 Months Ended

Mar. 31, 2015

Long Term Debt [Abstract]

Long Term Debt

NOTE 12 – LONG TERM DEBT

We have up to a $95.0 million senior secured credit facility (“Credit Facility”) which is comprised of a term loan facility in the principal amount of $45.0 million and a revolving credit facility (“LOC”) in the principal amount of up to $50.0 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 subject to certain financial requirements.  As of March 31, 2015, we had $41.0 million of borrowings and $7.6 million of letters of credit outstanding under our LOC, leaving approximately $1.4 million of additional 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 the Company’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.

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 stipulating as of March 31, 2015 that we maintain a consolidated leverage ratio of 5.0 to 1.0, an EBITDAR to fixed charges ratio of at least 1.05 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, minus impairment losses, plus 50% of our consolidated net income earned after December 31, 2011, excluding impairment loss, 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).

During the first quarter of 2015, we paid off approximately $13.5 million in debt in connection with the sale of one of our Handysize vessels.  Additionally, we wrote off approximately $95,000 of unamortized loan costs associated with the debt instrument which is reflected in loss on extinguishment of debt on our condensed consolidated statement of operations.

We guarantee two separate loan facilities of two separate shipping companies in which one of our wholly-owned subsidiaries has indirect ownership interests.  With respect to one of the two loan facilities of these shipping companies, in which our wholly-owned subsidiary indirectly owns a 25% interest, we guarantee 5% of the amount owed under the loan facility.  As of March 31, 2015 and December 31, 2014, this guarantee obligation equated to approximately $3.6 million, respectively.  The amount of this guarantee reduces semi-annually by approximately $165,000 through December 2018.  Under the second facility, in which our wholly-owned subsidiary indirectly owns approximately 23.7% of the borrower, we guarantee only $1.0 million of the approximately $11.0 million loan facility.  This second guarantee is non-amortizing and is scheduled to expire in December 2018.  In December 2017, we anticipate that this guarantee will be reduced from $1.0 million to $510,000 as a result of a scheduled payment of a portion of the facility.

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

(All Amount in Thousands)	Interest Rate					Total Principal Due
	March 31,		December 31,		Maturity	March 31,		December 31,
Description of Secured Debt	2015		2014		Date	2015		2014
Notes Payable – Variable Rate 1	2.7703	%	2.7471	%	2018	$	11,166	$	12,025
Notes Payable – Variable Rate	2.675-2.714	%	2.7312-2.7324	%	2018		26,986		41,400
Notes Payable – Variable Rate	2.5219	%	2.5050	%	2017		8,584		9,144
Notes Payable – Variable Rate 1	2.7561	%	2.7350	%	2018		15,080		15,394
Notes Payable – Variable Rate 2	3.6100	%	3.6100	%	2020		24,020		24,812
Notes Payable – Variable Rate 3	4.0100	%	3.9900	%	2018		41,063		41,906
Notes Payable – Fixed Rate 4	4.3500	%	4.3500	%	2020		37,019		37,759
Notes Payable – Variable Rate 5	2.9220	%	2.9195	%	2021		21,120		21,943
Note Payable - Mortgage 6							5		5
Line of Credit 3	3.9700	%	3.9100	%	2018		41,000		38,500
							226,043		242,888
			Less: Current Maturities				(22,412)		(23,367)
						$	203,631	$	219,521

1. We entered into a variable rate financing agreement with ING Bank N.V., London branch in June 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 in June 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.  This loan requires us to pre-fund a one-third portion of the upcoming quarterly scheduled debt payment, which, at March 31, 2015, constituted $0.4 million and is included as restricted cash on the balance sheet.

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.

Effective September 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 approximately $11.3 million in deferred gains resulting from the September 2014 vessel purchase and refinancing transactions.  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 to require us to maintain (i) 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 (ii) a minimum fixed charge coverage ratio of 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). 

During the first quarter of 2015, there was concern that we would be unable to meet all of our required debt covenants. As such, we received waivers from our lenders and lessors for certain covenants contained in our financing and lease agreements.  We received permission from certain lenders and lessors to incur up to $15 million in additional indebtedness for general corporate purposes.  We also received from certain lenders and lessors permission to incur additional indebtedness in connection with the refinancing of a foreign currency loan facility and our payoff of a related foreign currency interest rate swap.   We received from certain lenders and lessors a restatement of the fixed charge coverage ratio to a minimum 1.05 to 1.0 for the fiscal year 2015, 1.15 to 1.0 beginning with the quarter ending March 31, 2016, and 1.20 to 1.0 beginning with the quarter ending June 30, 2016 and for all periods thereafter.  The manner in which this fixed charge coverage ratio is determined and calculated differs under our various loan or lease agreements.  Two other lenders provided short-term relief by agreeing to amend, for 2015 only, the manner in which the leverage ratio will be calculated under the relevant agreement.  As a result of these waivers and concessions granted early this year, we were in compliance with all of our debt covenants as of March 31, 2015.

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 for the next twelve months, but we cannot assure you of this.

In addition to the restrictions under our 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.

During the second quarter of 2015, the Company refinanced its Yen-based credit facility and settled the related interest rate swap and foreign exchange contracts. For more information on the refinance, see Note 20 – Subsequent Event.

Liquidity and Covenant Compliance

Beginning in the fourth quarter of fiscal year 2014, we commenced a plan to evaluate our liquidity and capital resource needs for fiscal year 2015.  Our plan included the reduction of our quarterly cash dividend on common stock and the identification of five non-performing assets that were approved for sale by our Board of Directors during the fourth quarter of 2014 and classified as Assets Held for Sale on our December 31, 2014 balance sheet.  Additionally, in the fourth quarter of 2014, we completed the renewal of our contract with TEC.  As a result of this contract renewal and the impairment recorded on one of our assets held for sale, we evaluated the recoverability of our deferred tax assets and concluded that it is more likely than not that we will not recognize the benefits of our federal tax attributes and therefore, recorded a valuation allowance on our deferred tax assets during the fourth quarter of 2014. We recorded an increase in this valuation allowance of $730,000 for the three months ended March 31, 2015.

One of our held for sale assets was sold prior to December 31, 2014 and on March 5, 2015, we finalized the sale of one of the four remaining held for sale assets.  We are actively marketing the remaining three assets.  The estimated proceeds from the remaining three assets held for sale are an integral part to our compliance with our minimum liquidity requirements.  Additionally, to generate additional liquidity, we could sell unencumbered vessels in our fleet and defer capital expenditures and dry docking costs that are not required until 2016.

We are also currently in discussions with our creditors to refinance certain unencumbered assets for approximately $12.0 million, and we believe this will be executed by the end of the second quarter of 2015. In addition to this amendment, we are also in the process of obtaining bank financing for approximately $6.9 million which will go towards the construction and renovation of our future corporate office in New Orleans.  We anticipate closing this financing by the end of the second quarter of 2015. In addition to the $6.9 million in bank financing, we have received approximately $4.6 million in incentives from the State of Louisiana and expect to receive another $0.6 million of incentives during 2015 which will offset part of the cost of constructing the new corporate office.  The remaining cost of approximately$6.9 million to complete the construction of the building will be funded by cash on hand.  If we are unsuccessful in refinancing certain unencumbered assets, we could re-market our requests with other interested parties, seek loan refinancing to further monetize asset values on other vessels, or attempt to access the equity markets under our current open shelf registration. The timing and success of our financing activities cannot be assured.

Failure to execute our plan could impact our ability to be in compliance with our quarterly debt covenants in 2015 and 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.  Moreover, because our debt obligations are represented by separate agreements with different lenders, in some cases any breach of these covenants or any 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).  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 our debt obligations under multiple lending agreements.  The acceleration of any or all amounts due under our debt agreements or the loss of the ability to borrow under our revolving credit facility or other debt agreements could have a material adverse effect on our business, financial condition, results of operations and cash flows.  In the event of non-compliance with our debt covenants, we would seek to amend the covenants, obtain waivers from each of our lenders in order to cure any instances of non-compliance, or sell vessels that are currently unencumbered by debt or that serve as collateral against our outstanding debt obligations.  The disposition of one or more of these vessels would provide us with additional liquidity and capital resources that could be used to pay down the balances owed under our current debt obligations.

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Cash and Cash Equivalents	$ 21,783	$ 21,133
Restricted Cash	391	1,394
Accounts Receivable, Net of Allowance for Doubtful Accounts	28,653	31,322
Prepaid Expenses	8,639	10,927
Deferred Tax Asset	235	408
Other Current Assets	328	370
Notes Receivable	1,628	3,204
Material and Supplies Inventory	8,134	9,760
Assets Held for Sale	6,778	6,976
Total Current Assets	76,569	85,494
Investment in Unconsolidated Entities	22,697	21,837
Vessels, Property, and Other Equipment, at Cost:
Vessels	519,953	520,026
Building	1,780	1,354
Land	623	623
Leasehold Improvements	26,348	26,348
Construction in Progress	4,495	2,371
Furniture and Equipment	10,574	10,461
Property, Plant and Equipment Total, Gross	563,773	561,183
Less - Accumulated Depreciation	(192,618)	(186,450)
Net Vessels, Property, Plant and Equipment	371,155	374,733
Other Assets:
Deferred Charges, Net of Accumulated Amortization	28,960	28,657
Intangible Assets, Net of Accumulated Amortization	24,416	25,042
Due from Related Parties	1,567	1,660
Notes Receivable	25,361	24,455
Goodwill	2,735	2,735
Assets Held for Sale	32,486	48,701
Other	4,614	4,843
Other Assets Total	120,139	136,093
TOTAL ASSETS	590,560	618,157
Current Liabilities:
Current Maturities of Long-Term Debt	22,412	23,367
Accounts Payable and Other Accrued Expenses	47,805	52,731
Total Current Liabilities	70,217	76,098
Long-Term Debt, Less Current Maturities	203,631	219,521
Other Long-Term Liabilities:
Incentive Obligation	4,456	4,644
Other	48,970	50,284
TOTAL LIABILITIES	327,274	350,547
Stockholders' Equity:
Common Stock, $1.00 Par Value, 20,000,000 Shares Authorized, 7,309,757 and 7,301,657 Shares Outstanding at March 31, 2015 and December 31, 2014, Respectively	8,753	8,743
Additional Paid-In Capital	140,952	140,960
Retained Earnings	151,466	159,134
Treasury Stock 1,388,078 Shares at March 31, 2015 and December 31, 2014	(25,403)	(25,403)
Accumulated Other Comprehensive Loss	(13,048)	(16,390)
TOTAL STOCKHOLDERS' EQUITY	263,286	267,610
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	590,560	618,157
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

XML

Goodwill, Other Intangible Assets, And Deferred Charges

3 Months Ended

Mar. 31, 2015

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 $0.6 million and $1.0 million for the three months ended March 31, 2015 and 2014, respectively.  Amortization expense for deferred charges was approximately $4.8 million and $4.3 million for the three months ended March 31, 2015 and 2014, respectively.  The following table presents the rollforward of goodwill, other intangible assets, and deferred chargesfor the three months endedMarch 31, 2015:

(All Amounts in Thousands)			Balance at										Balance at
	Amortization		December 31,		Cash						Non-Cash		March 31,
	Period		2014		Additions		Disposals		Amortization		Reclassifications		2015
Indefinite Life Intangibles
Goodwill		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Total Indefinite Life Intangibles		$	2,735	$	-	$	-	$	-	$	-	$	2,735
Definite Life Intangibles
Trade names - FSI	240 months	$	57	$	-	$	-	$	(1)	$	-	$	56
Trade names - UOS	144 months		1,357		-		-		(34)		-		1,323
Customer Relationships - FSI	240 months		375		-		-		(5)		-		370
Customer Relationships - UOS	144 months		23,253		-		-		(586)		-		22,667
Total Definite Life Intangibles		$	25,042	$	-	$	-	$	(626)	$	-	$	24,416
Deferred Charges
Drydocking Costs	various	$	25,238	$	5,515	$	-	$	(4,560)	$	(831)	$	25,362
Financing Charges and Other	various		3,419		28		(95)		(280)		526		3,598
Total Deferred Charges		$	28,657	$	5,543	$	(95)	$	(4,840)	$	(305)	$	28,960

XML

Unconsolidated Entities

3 Months Ended

Mar. 31, 2015

Unconsolidated Entities [Abstract]

Unconsolidated Entities

NOTE 5 – UNCONSOLIDATED ENTITIES

The following table summarizes our equity in net income (loss) of unconsolidated entities for the three months ended March  31, 2015 and 2014, respectively:

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Oslo Bulk, AS	$	515	$	(62)
Oslo Bulk Holding Pte. Ltd (formerly Tony Bulkers)		120		(18)
Terminales Transgolfo,  S.A. de C.V.		(74)		(28)
Saltholmen Shipping Ltd		251		-
Brattholmen Shipping Ltd		81		-
Total Equity in Net Income (Loss) of Unconsolidated Entities	$	893	$	(108)

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 operations under the caption: "Equity in Net Income (Loss) of Unconsolidated Entities (Net of Applicable Taxes).”

During 2014, we invested approximately $5.8 million cash and $2.1 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.

For additional information on our investment in these and other unconsolidated entities, see Note E – Unconsolidated Entities to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 17 – 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 March 31, 2015 and December 31, 2014, segregated by the above-described levels of valuation inputs:

(All Amounts in Thousands)	March 31, 2015
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,093)	$	-	$	(7,093)
(All Amounts in Thousands)	December 31, 2014
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Derivative Liabilities	$	-	$	(7,348)	$	-	$	(7,348)

The carrying amounts of our accounts receivable, accounts payable and accrued liabilities approximated their fair value at March 31, 2015 and December 31, 2014. We estimated the fair value of our variable rate long-term debt at March 31, 2015, including current maturities, to equal approximately $227.9 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.

XML

Other Long Term Liabilities

3 Months Ended

Mar. 31, 2015

Other Long Term Liabilities [Abstract]

Other Long Term Liabilities

NOTE 13 – OTHER LONG TERM LIABILITIES

Other Long Term Liabilities as of March 31, 2015 and December 31, 2014 were $49.0 million and $50.3 million, respectively.

(All Amounts in Thousands)	March 31,		December 31,
	2015		2014
Deferred Gains, net of Amortization	$	16,970	$	17,917
Pension and Post Retirement		12,221		12,497
Alabama Lease Incentive		5,452		5,739
Insurance Reserves		5,319		4,941
Derivatives		6,911		7,050
Deferred Tax Liability		235		408
Other		1,862		1,732
	$	48,970	$	50,284

XML

Commitments And Contingencies

3 Months Ended

Mar. 31, 2015

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Commitments

Investment in newbuilding Handysize 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.  As a result of this bankruptcy, we collected $4.2 million on January 6, 2015, $3.9 million of which represented a return of our deposit and $0.3 million of which we recognized as interest income.

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 we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability.

For further information on our commitments and contingencies, see Note K – Commitment and Contingencies to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

XML

Stockholders' Equity (Summary Of Changes In Stockholders' Equity) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Stockholders' Equity [Line Items]
Balance	$ 267,610,000
Net Loss	(4,501,000)		(3,217,000)
Common Stock Dividends	(1,862,000)	[1]
Preferred Stock Dividends	(1,305,000)
Unrealized Foreign Currency Translation Gain	(61,000)		(25,000)
Net Change in Fair Value of Derivatives	240,000		9,000
Net Change in Funding Status of Defined Benefit Plan	304,000		175,000
De-Designation of Interest Rate Swap	2,859,000
Issuance of stock-based compensation	2,000
Balance	263,286,000
Accrued dividends not paid	34,000
Preferred Stock [Member]
Stockholders' Equity [Line Items]
Preferred Stock Dividends	$ (1,305,000)

[1] Includes approximately $34,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

XML

Assets Held For Sale

3 Months Ended

Mar. 31, 2015

Assets Held For Sale [Abstract]

Assets Held For Sale

NOTE 7 – ASSETS HELD FOR SALE

As a result of continued evaluation of our strategic alternatives, during the fourth quarter of 2014, we committed to a plan to sell three Handysize vessels and oneJones Act Tug-Barge unit that was inactive.  Upon approval of this plan, we classified the Handysize vessels and their related equipment as Long Term Assets Held for Sale, valued at approximately $48.7 million at December 31, 2014.  During the first quarter of 2015, we sold one of the Handysize vessels and its equipment and paid off related debt.  At March 31, 2015, the remaining two Handysize vessels held for sale were valued at approximately $32.5 million.  At such date, we owed approximately $27.0 million under debt incurred to purchase these two vessels, which we plan to pay off if and when we sell such vessels.  The Tug-Barge unit and inventory related to the Handysize vessels are classified as Short Term Assets Held for Sale, and were valued at approximately $6.8 million at March 31, 2015 and $7.0 million at December 31, 2014.  As a result of these classifications, there was no depreciation expense related to these assets during the first quarter of 2015.If weak dry bulk markets continue to put downward pressure on charter rates or we elect to market other vessels for sale, we might incur additional impairment charges in the future.

During 2014, the Company adopted ASU 2014-8 which changed the definition of discontinued operations.  In accordance with this guidance, we determined that the assets held for sale did not represent a strategic shift that would have a major effect on our operations and financial results.  As such, we did not report the financial results related to these assets as discontinued operations.

XML

Income Taxes

3 Months Ended

Mar. 31, 2015

Income Taxes [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

We recorded a tax provision of $39,000 on our $5.4 million loss before taxes and equity in net income of unconsolidated entities for the three months ended March 31, 2015.  For the first three months of 2014 we recorded an income tax benefit of $882,000 on our $4.0 million of loss before equity in net income of unconsolidated entities. These provision amounts represent our qualifying U.S. flag operations, which continue to be taxed under the “tonnage tax” provisions rather than the normal U.S. corporate income tax provisions, state income taxes paid, and foreign income tax withholdings or refunds.  We established a valuation allowance against deferred income tax assets in 2014 because, based on available information, we could not conclude that it was more likely than not that the full amount of deferred income tax assets generated primarily by NOL carryforwards and AMT credits would be realized through the generation of taxable income in the near future. We have and will continue to evaluate the need for a valuation allowance on a quarterly basis.  We recorded an increase in our valuation allowance of $730,000 for the three months ending March 31, 2015.

For further information on certain tax laws and elections, see our Annual Report on Form 10-K filed for the year ended December 31, 2014, including Note J - Income Taxes to the consolidated financial statements included therein.

XML

Employee Benefit Plans

3 Months Ended

Mar. 31, 2015

Employee Benefit Plans [Abstract]

Employee Benefit Plans

NOTE 10 – 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 March 31, 2015 and 2014:

(All Amounts in Thousands)		Pension Plan				Postretirement Benefits
		Three Months Ended March 31,				Three Months Ended March 31,
Components of net periodic benefit cost:		2015		2014		2015		2014
Service cost	$	171	$	154	$	8	$	3
Interest cost		359		381		118		145
Expected return on plan assets		(638)		(655)		-		-
Amortization of prior service cost		(1)		(1)		26		25
Amortization of Net Loss		111		63		37		88
Net periodic benefit cost (benefit)	$	2	$	(58)	$	189	$	261

We contributed $150,000to our pension plan for the three months ended March 31, 2015.  We expect to contribute an additional $450,000 before December 31, 2015.

XML

Subsequent Event (Details)	3 Months Ended					3 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Jun. 30, 2015 Scenario, Forecast [Member] USD ($)	Apr. 24, 2015 Subsequent Event [Member] USD ($)	Apr. 24, 2015 Subsequent Event [Member] JPY (¥)	Mar. 31, 2015 New Loan Agreement [Member] DVB Bank SE [Member]	Apr. 24, 2015 New Loan Agreement [Member] DVB Bank SE [Member] Subsequent Event [Member] USD ($)
Subsequent Event [Line Items]
Term loan facility principal amount							$ 32,000,000
Amount of outstanding Yen facility paid off				28,100,000	2,900,000,000
Amount of Yen denominated interest rate swap settled				2,900,000
Fixed rate (in hundredths)							4.16%
Term for principal to be paid quarterly						5 years
Amortization period						10 years
Final quarterly balloon payment							16,800,000
Derivative Loss	2,810,000	14,000
Possible additional derivative losses			$ 500,000

XML

Change In Accounting Estimate (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Change In Accounting Estimate [Abstract]
Period between salvage value reviews	3 years
Period used to determine reasonableness of salvage values	3 years
Decrease in salvage values	$ 0.6

XML

Other Long Term Liabilities (Tables)

3 Months Ended

Mar. 31, 2015

Other Long Term Liabilities [Abstract]

Other Long Term Liabilities

(All Amounts in Thousands)	March 31,		December 31,
	2015		2014
Deferred Gains, net of Amortization	$	16,970	$	17,917
Pension and Post Retirement		12,221		12,497
Alabama Lease Incentive		5,452		5,739
Insurance Reserves		5,319		4,941
Derivatives		6,911		7,050
Deferred Tax Liability		235		408
Other		1,862		1,732
	$	48,970	$	50,284

XML

Derivative Instruments (Narrative) (Details)	3 Months Ended				3 Months Ended	12 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Mar. 31, 2015 JPY (¥)	Dec. 31, 2014 contract	Mar. 31, 2015 Other Comprehensive Income (Loss) [Member] USD ($)	Dec. 31, 2014 Other Comprehensive Income (Loss) [Member] USD ($)	Mar. 31, 2015 Foreign Exchange Contract 1 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 1 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 1 [Member] MXN	Mar. 31, 2015 Foreign Exchange Contract 2 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 2 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 2 [Member] MXN	Mar. 31, 2015 Foreign Exchange Contract 3 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 3 [Member] USD ($)	Dec. 31, 2014 Foreign Exchange Contract 3 [Member] MXN
Derivative Instruments, Gain (Loss) [Line Items]
Maximum potential future exposure on derivatives	$ 7,100,000
Derivative Loss	2,810,000	14,000
Unrealized loss related to derivative instruments included in accumulated other comprehensive loss					600,000	3,700,000
Number of forward purchase contracts				3
Notional amount of forward purchase contracts	$ 30,019,000						$ 675,000	$ 900,000		$ 675,000	$ 900,000		$ 450,000	$ 600,000
Exchange rate			102.25						13.6007			13.7503			14.1934
Projected Peso exposure represented by Mexican Peso foreign exchange contracts (in hundredths)	85.00%

XML

Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Stockholders' Equity

NOTE 15 – STOCKHOLDERS’ EQUITY

A summary of the changes in Stockholders’ equity for the three months ended March 31, 2015, is as follows:

(All Amounts in Thousands)	Stockholders'
	Equity
Balance at December 31, 2014	$	267,610
Net Loss		(4,501)
Common Stock Dividends*		(1,862)
Preferred Stock Dividends		(1,305)
Unrealized Foreign Currency Translation Gain		(61)
Net Change in Fair Value of Derivatives		240
De-Designation of Interest Rate Swap		2,859
Net Change in Funding Status of Defined Benefit Plan		304
Issuance of stock-based compensation		2
Balance at March 31, 2015	$	263,286

*Includes approximately $34,000 of dividends accrued but not paid during the period with respect to unvested equity incentive awards.

Stock Repurchase Program

On January 25, 2008, our Board 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 our Board of Directors otherwise provides, this authorization will remain open indefinitely, or until we reach the approved 1,000,000 share limit. As of March 31, 2015, the maximum number of shares that may yet be purchased under the Plan was 285,377 shares.

Dividend Payments

The payment of dividends to common stockholders and preferred stockholders is 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.

During the three months ended March 31, 2015, we paid cash dividends on our common stock as follows:

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	19-Feb-15	4-Mar-15	$	0.25	$	1,828

During the three months ended March 31, 2015, we paid cash dividends on our Series A and Series B Cumulative Perpetual Preferred Stock as follows:

(All Amounts in Thousands Except per Share Data)
Declaration Date	Record Date	Series	Payment Date		Per Share Amount		Total Dividend Paid
7-Jan-15	29-Jan-15	A	30-Jan-15	$	2.375	$	594
7-Jan-15	29-Jan-15	B	30-Jan-15	$	2.250	$	711
						$	1,305

XML

Subsequent Event

3 Months Ended

Mar. 31, 2015

Subsequent Event [Abstract]

Subsequent Event

NOTE 20 – SUBSEQUENT EVENT

On April 24, 2015, we entered into a new loan agreement with DVB Bank SE in the amount of $32.0 million by refinancing our 2010 built PCTC. We received the loan proceeds on April 24, 2015 and applied them as follows: (i) $28.1 million to pay off an outstanding Yen facility in the amount of 2.9 billion Yen and the related Yen forward contract and (ii) $2.9 million to settle a Yen denominated interest rate swap.  Under the new DVB loan agreement, interest will be payable at a fixed rate of 4.16% with the principal being paid quarterly over a five-year term based on an amortization of ten years with a final quarterly balloon payment of $16.8 million due on April 22, 2020.  As part of the settlement of the interest rate swap, we recorded a derivative loss of $2.8 million in the first quarter of 2015, which was previously classified as an unrecognized loss in Other Accumulated Comprehensive Income. We anticipate additional losses in the second quarter of 2015 of approximately $0.5 million as a result of the early debt payoff and related derivative settlement.

XML

Employee Benefit Plans (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Employee Benefit Plans [Abstract]
Contribution to pension plan	$ 150,000
Expected contribution to pension plan before December 31, 2015	$ 450,000

XML

Inventory (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Inventory [Abstract]
Spare Parts Inventory	$ 3,296	$ 3,253
Fuel Inventory	2,320	3,967
Warehouse Inventory	2,518	2,540
Inventory	$ 8,134	$ 9,760

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
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 outstanding (in shares)	7,309,757	7,301,657
Treasury Stock, (in shares)	1,388,078	1,388,078
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

XML

Inventory

3 Months Ended

Mar. 31, 2015

Inventory [Abstract]

Inventory

NOTE 4 - INVENTORY

Our inventory consists of three major classes: spare parts, fuel, and warehouse 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 cost method of accounting.  We have broken down the inventory balances as of March 31, 2015 and December 31, 2014 by major class in the following table:

(All Amounts in Thousands)		March 31,		December 31,
Inventory Classes		2015		2014
Spare Parts Inventory	$	3,296	$	3,253
Fuel Inventory		2,320		3,967
Warehouse Inventory		2,518		2,540
Total	$	8,134	$	9,760

XML

Stock Based Compensation (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,000	$ 447,000
Unrestricted Stock [Member] | Independent Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)	8,100
Restricted Stock Units (RSUs) [Member] | Key Executive Personnel [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)	42,650
Number of shares forfeited	37,700

XML

Operating Segments (Tables)

3 Months Ended

Mar. 31, 2015

Operating Segments [Abstract]

Segment Profit And Loss

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	24,595		$	14,247		$	1,868		$	-		$	10,571		$	-	$	51,281
Variable Revenue		-			7,533			1,255			7,785			185			(13)		16,745
Total Revenue from External Customers		24,595			21,780			3,123			7,785			10,756			(13)		68,026
Voyage Expenses		18,590			17,020			2,580			6,886			7,557			(422)		52,211
Amortization Expense		3,828			715			61			285			298			-		5,187
Loss (Income) of Unconsolidated Entities		-			-			(635)			74			(332)			-		(893)
Gross Voyage Profit	$	2,177		$	4,045		$	1,117		$	540		$	3,233		$	409	$	11,521
Gross Voyage Profit Margin		9	%		19	%		36	%		7	%		30	%		-		17	%
2014
Fixed Revenue	$	29,100		$	15,615		$	1,526		$	-		$	8,702		$	-	$	54,943
Variable Revenue		-			3,941			3,590			7,926			2,248			46		17,751
Total Revenue from External Customers		29,100			19,556			5,116			7,926			10,950			46		72,694
Voyage Expenses		21,209			16,663			3,566			6,846			9,476			(327)		57,433
Amortization Expense		3,667			535			77			160			724			-		5,163
Loss of Unconsolidated Entities		-			-			80			28			-			-		108
Gross Voyage Profit	$	4,224		$	2,358		$	1,393		$	892		$	750		$	373	$	9,990
Gross Voyage Profit Margin		15	%		12	%		27	%		11	%		7	%		-		14	%

Reconciliation Of The Totals Reported For The Operating Segments

(All Amounts in Thousands)	Three Months Ended March 31,
		2015		2014
Revenues	$	68,026	$	72,694
Voyage Expenses		52,211		57,433
Amortization Expense		5,187		5,163
Net (Income) Loss of Unconsolidated Entities		(893)		108
Gross Voyage Profit		11,521		9,990
Vessel Depreciation		5,543		6,721
Other Depreciation		184		184
Gross Profit		5,794		3,085
Other Operating Expenses:
Administrative and General Expenses		5,022		5,449
Loss on Sale of Other Assets		68		-
Less:  Net Income (Loss) of Unconsolidated Entities		893		(108)
Total Other Operating Expenses		5,983		5,341
Operating Loss	$	(189)	$	(2,256)

XML

Operating Segments (Segment Profit And Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 segment	Mar. 31, 2014
Segment Reporting Information [Line Items]
Number of operating segments	6
Fixed Revenue	$ 51,281	$ 54,943
Variable Revenue	16,745	17,751
Total Revenues	68,026	72,694
Voyage Expenses	52,211	57,433
Amortization Expenses	5,187	5,163
Loss (Income) of Unconsolidated Entities	(893)	108
Gross Voyage Profit	11,521	9,990
Gross Voyage Profit Margin Percentage (in hundredths)	17.00%	14.00%
External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	68,026	72,694
Jones Act [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	24,595	29,100
Voyage Expenses	18,590	21,209
Amortization Expenses	3,828	3,667
Gross Voyage Profit	2,177	4,224
Gross Voyage Profit Margin Percentage (in hundredths)	9.00%	15.00%
Jones Act [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	24,595	29,100
PCTC [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	14,247	15,615
Variable Revenue	7,533	3,941
Voyage Expenses	17,020	16,663
Amortization Expenses	715	535
Gross Voyage Profit	4,045	2,358
Gross Voyage Profit Margin Percentage (in hundredths)	19.00%	12.00%
PCTC [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	21,780	19,556
Dry Bulk Carriers [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	1,868	1,526
Variable Revenue	1,255	3,590
Voyage Expenses	2,580	3,566
Amortization Expenses	61	77
Loss (Income) of Unconsolidated Entities	(635)	80
Gross Voyage Profit	1,117	1,393
Gross Voyage Profit Margin Percentage (in hundredths)	36.00%	27.00%
Dry Bulk Carriers [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	3,123	5,116
Rail-Ferry Service [Member]
Segment Reporting Information [Line Items]
Variable Revenue	7,785	7,926
Voyage Expenses	6,886	6,846
Amortization Expenses	285	160
Loss (Income) of Unconsolidated Entities	74	28
Gross Voyage Profit	540	892
Gross Voyage Profit Margin Percentage (in hundredths)	7.00%	11.00%
Rail-Ferry Service [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	7,785	7,926
Specialty Contracts [Member]
Segment Reporting Information [Line Items]
Fixed Revenue	10,571	8,702
Variable Revenue	185	2,248
Voyage Expenses	7,557	9,476
Amortization Expenses	298	724
Loss (Income) of Unconsolidated Entities	(332)
Gross Voyage Profit	3,233	750
Gross Voyage Profit Margin Percentage (in hundredths)	30.00%	7.00%
Specialty Contracts [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	10,756	10,950
Other [Member]
Segment Reporting Information [Line Items]
Variable Revenue	(13)	46
Voyage Expenses	(422)	(327)
Gross Voyage Profit	409	373
Other [Member] | External Customers [Member]
Segment Reporting Information [Line Items]
Total Revenues	$ (13)	$ 46

XML

Stock Based Compensation

3 Months Ended

Mar. 31, 2015

Stock Based Compensation [Abstract]

Stock Based Compensation

NOTE 14 – 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.  RSUs are granted in a combination of time based and performance based units. These awards are granted under the International Shipholding Corporation 2011 Stock Incentive Plan (the “Plan”), which was approved by our stockholders in 2011.  In the first quarter of 2015, we granted 8,100 unrestricted shares to its outside directors and 42,650 RSUs to key executive personnel. Additionally, during the first quarter of 2015, our key executive personnel forfeited 37,700 shares from certain performance based RSUs granted in 2012 and 2014 and modified awards originally granted in 2013. Our total compensation expense related to these plans was approximately $2,000and $447,000 for the three months ended March 31, 2015 and 2014, respectively, which is reflected in administrative and general expenses.