8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported)

October 20, 2016

INTERNATIONAL SHIPHOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Commission file number  –  001-10852

Delaware	36-2989662
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

601 Poydras Street, Suite 1850	New Orleans, LA	70130
(Address of principal executive offices)		(Zip Code)

(251) 243-9100

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 1.01. Entry into a Material Definitive Agreement.

As previously reported by International Shipholding Corporation (the “Company”), on July 31, 2016, the Company and certain of its direct and indirect subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

Asset Purchase Agreement

On October 28, 2016, the Company and certain of its subsidiaries (the “Sellers”) entered into a “stalking horse” Asset Purchase Agreement (the “Asset Purchase Agreement”) with J Line Corporation, a Marshall Islands corporation (the “Buyer”), pursuant to which the Buyer agreed to purchase certain contracts, agreements, and notes receivable financing certain vessels owned by third parties relating to the Company’s provision of logistical and seaborne transportation services in Southeast Asia (the “Specialty Business Assets”) from the Sellers for $18.0 million, subject to adjustments for certain expenses.  Erik L. Johnsen, the Chairman of the Board, Chief Executive Officer, and President of the Company, and R. Christian Johnsen, the Secretary of the Company and the brother of Erik L. Johnsen, are officers of the Buyer and Erik L. Johnsen and Erik F. Johnsen, a former Chairman of the Board and the father of Erik L. Johnsen, are both significant stockholders of the Buyer.

The Buyer paid a $1.8 million deposit into escrow in connection with the execution of the Asset Purchase Agreement.  The deposit may be retained by the Sellers if (i) the closing has not occurred by March 31, 2017 as a result of delays or a material breach by the Buyer and the Sellers terminate the Asset Purchase Agreement or (ii) the Sellers are ready, willing and able to proceed with the closing and the Buyer does not pay the adjusted purchase price as required by the Asset Purchase Agreement and the Sellers terminate the Asset Purchase Agreement.  If the parties are not able to close by the closing date for any reason other than the Buyer’s material breach of the Asset Purchase Agreement, then (i) the deposit will be returned to the Buyer upon the termination of the Asset Purchase Agreement and (ii) the Company will reimburse the Buyer for up to $500,000 of the Buyer’s reasonable, documented out-of-pocket costs and expenses actually incurred in connection with the negotiation, preparation and performance of the Asset Purchase Agreement (the “Expense Reimbursement”).

The Sellers and the Buyer have made customary representations, warranties and covenants in the Asset Purchase Agreement. The closing of the transactions contemplated by the Asset Purchase Agreement is subject to the satisfaction or waiver of customary closing conditions and the entry of a sale order by the Bankruptcy Court approving the sale as provided in the Asset Purchase Agreement.

The Asset Purchase Agreement is intended to constitute a “stalking horse” bid that is subject to higher and better bids by third parties at an auction tentatively scheduled to be held on December 15, 2016 at the New York offices of Akin Gump Strauss Hauer & Feld LLP in accordance with bidding procedures to be approved by the Bankruptcy Court.  Any asset purchase agreement between the Sellers and the successful bidder at the auction for the Specialty Business Assets is also subject to Bankruptcy Court approval.  A hearing of the Bankruptcy Court has been scheduled for November 10, 2016 to request entry of an order approving, among other things, the Expense Reimbursement, the bidding procedures for the auction, and the scheduling of a sale hearing to approve the sale of the Specialty Business Assets with respect to a bid that is accepted by the Debtors.

The description of the Asset Purchase Agreement is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.

Item 7.01. Regulation FD Disclosure.

On October 20, 2016, the Company filed a Monthly Operating Report for the month of September 2016 with the Bankruptcy Court.  The Monthly Operating Report is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference.

Cautionary Statement Regarding the Monthly Operating Report

The Company cautions investors and potential investors not to place undue reliance on the information contained in the Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court. The Monthly Operating Report was not audited or reviewed by an independent registered public accounting firm and was not prepared in accordance with generally accepted accounting principles in the United States. The Monthly Operating Report is in a format prescribed by applicable bankruptcy laws and remains subject to future adjustment and reconciliation. Therefore, the Monthly Operating Report does not necessarily contain all information required in filings pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or may present such information differently from the presentation of information in Exchange Act reports. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the Monthly Operating Report is complete. The Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in Exchange Act reports, and such information might not be indicative of the Company’s financial condition or operating results for the period that would be reflected in the Company’s financial statements or in its Exchange Act reports. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results.

Item 8.01. Other Events.

Amendments to DIP Credit Facility

On September 12, 2016, the Company and the other Debtors party thereto, as borrowers, SEACOR Capital Corp, as administrative agent, collateral agent, security trustee and a lender, and DVB BANK SE, as a lender, entered into a second amendment to the Debtor-In-Possession Credit Agreement (as amended, the “DIP Credit Facility”), dated August 4, 2016, among the same parties that, among other things, increased the default interest rate from 14% to 16%.  On October 18, 2016, the same parties entered into a third amendment to the DIP Credit Facility that, among other things, increased the committed amount under the DIP Credit Facility from $16.0 million to $18.1 million.

Cautionary Note Regarding the Company’s Common Stock

The Company cautions that trading in the Company’s common stock during the pendency of the Chapter 11 case is highly speculative and poses substantial risks. Trading prices for the Company’s common stock may bear little or no relationship to the actual recovery, if any, to be received by holders of the Company’s common stock in the Chapter 11 case.

Cautionary Note Regarding Forward-Looking Statements

Certain statements and information included herein may constitute “forward-looking statements,” as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, relating to future events. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events will differ materially from such predictions as a result of certain risk factors.   Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the ability to consummate the sale of the assets as contemplated by the Asset Purchase Agreement; the ability to confirm and consummate a plan of reorganization; risks attendant to the Chapter 11 process, including the effects thereof on the Debtors’ business and on the interests of various constituents, the length of time that the Debtors might be required to operate in Chapter 11 and the continued availability of operating capital during the pendency of the Chapter 11 proceedings; risks associated with third party motions in any Chapter 11 case, which may interfere with the ability to confirm and consummate a plan of reorganization; potential adverse effects on the Debtors’ liquidity or results of operations; increased costs to execute the restructuring; effects on the market price of the Company’s common stock; and the risk factors and known trends and uncertainties as described in the Company’s Annual Report on Form 10-K.  Readers are cautioned not to place undue reliance on forward-looking statements, which speak only to management’s plans, assumptions and expectations as of the date of this Current Report on Form 8-K. The Company disclaims any duty to update or alter any forward-looking statements, except as required by applicable law.

Exchange Act Reports

The Company has suspended the filing of its regular periodic reports on Form 10-K and Form 10-Q with the SEC.  The Company, however, intends to furnish copies of the Monthly Operating Reports that are required to be submitted to the Bankruptcy Court under cover of Current Reports on Form 8-K and to continue to file Forms 8-K disclosing material developments concerning the Company.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
2.1*	Asset Purchase Agreement, effective as of October 28, 2016, by and among International Shipholding Corporation, LCI Shipholdings, Inc., Gulf South Shipping PTE Ltd., Marco Shipping Company (PTE) Ltd., N.W. Johnsen & Co., Inc., MPV Netherlands C.V., MPV Netherlands Coöperatief U.A., MPV Netherlands V.B., as Sellers, and J Line Corporation, as Buyer
99.1	Monthly Operating Report

* Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of these Exhibits and Schedules is included after the signature pages to the Asset Purchase Agreement. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedule to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities 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
	By:	/s/ Manuel G. Estrada
		Manuel G. Estrada
		Vice President and Chief Financial Officer
Date:    November 3, 2016

EXHIBIT INDEX

Exhibit No.	Description
2.1*	Asset Purchase Agreement, effective as of October 28, 2016, by and among International Shipholding Corporation, LCI Shipholdings, Inc., Gulf South Shipping PTE Ltd., Marco Shipping Company (PTE) Ltd., N.W. Johnsen & Co., Inc., MPV Netherlands C.V., MPV Netherlands Coöperatief U.A., MPV Netherlands V.B., as sellers, and J Line Corporation, as buyer
99.1	Monthly Operating Report

* Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of these Exhibits and Schedules is included after the signature pages to the Asset Purchase Agreement. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedule to the SEC upon request.

EX-2.1

Exhibit 2.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into effective as of this 28^th day of October 2016 (the “Effective Date”), by and among INTERNATIONAL SHIPHOLDING CORPORATION, a Delaware corporation (“ISH”), LCI SHIPHOLDINGS, INC., GULF SOUTH SHIPPING PTE LTD., MARCO SHIPPING Company (PTE) LTD., N.W. JOHNSEN & CO., Inc. (collectively, the “Debtor Sellers”) and MPV NETHERLANDS C.V., MPV NETHERLANDS COÖPERATIEF U.A., and MPV NETHERLANDS V.B. (collectively, the “Non-Debtor Sellers” and collectively with Debtor Sellers, “Sellers”), and J LINE CORPORATION, a Marshall Islands corporation, or its assigns (“Buyer”).¹  Buyer and Sellers may be referred to herein individually as a “Party” and collectively as the “Parties”.  For purposes of this Agreement, the term “Affiliates” shall mean with respect to either Party hereto, any other company or legal entity which is controlled by, controls such Party, or is under common control of such Party, and the terms “control,” “controls,” “controlled” and words or phrases of similar import mean the power to direct the management and policies of an entity, whether through the ownership of voting securities, by contract, or otherwise.

WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, pursuant to the terms and conditions of this Agreement, certain Acquired Assets (as defined below);

WHEREAS, on July 31, 2016 (the “Petition Date”), Debtor Sellers and certain of their Affiliates (collectively, the “Debtors”) each filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code styled In re: International Shipholding Corporation, et. al., Chapter 11 Case No 16-12220(the “Bankruptcy Cases”), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”);

WHEREAS, the Parties intend to effectuate the transactions contemplated by this Agreement through a sale of the Acquired Assets free and clear of all liens and encumbrances, other than Permitted Liens (as defined below), pursuant to Sections 105, 362, 363 and 365 of Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”); and

WHEREAS, Sellers’ ability to consummate the transactions contemplated by this Agreement is subject to, among other things, the entry of an order by the Bankruptcy Court (the “Sale Order”).

NOW, THEREFORE, for and in consideration of the premises and the mutual agreements contained herein, Buyer and Sellers hereby agree as follows:

¹ Buyer anticipates using multiple affiliated entities to take title to assets.  Identity of such affiliates will be determined prior to the Closing Date.

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ARTICLE I

SALE AND PURCHASE

Section 1.1            Acquired Assets.  Subject to the entry of the Sale Order by the Bankruptcy Court and Section 1.2, and in accordance with the terms and conditions of this Agreement, Sellers agree to sell and assign to Buyer, and Buyer agrees to purchase and acquire from Seller, all of Seller’s right, title and interest in and to the following (collectively, the “Acquired Assets”), as more specifically described in Exhibits A and B attached hereto:

(a)           all of Sellers’ rights under each of the contracts, agreements or arrangements, written or oral (each, a “Contract”) set forth on Exhibit A hereto (collectively, the “Assigned Contracts”);²

(b)           all of Sellers’ rights, title and interest in and to the assets set forth on Exhibit B;³

(c)           to the extent transferable using commercially reasonable efforts, all rights of Sellers under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors to the extent relating to products sold, or services provided, to Sellers in respect of the Acquired Assets other than any warranties, representations and guarantees pertaining to any Excluded Assets; and

(d)           all goodwill of, and other intangible rights of Sellers in, the Acquired Assets.

Section 1.2            Excluded Assets.  Notwithstanding the foregoing, the term “Acquired Assets” shall not include any assets of Sellers, other than the Acquired Assets, including the following (collectively, the “Excluded Assets”):

(a)           any equipment, tools, supplies or spare parts owned by a third party;

(b)          any asset of Sellers that would otherwise constitute an Acquired Asset but for the fact that it is consumed, conveyed, leased or otherwise disposed of, in the ordinary course of Sellers’ business prior to the Closing Date (as defined below) not in violation of this Agreement;

(c)           the certificates of incorporation or, as applicable, formation, qualifications to conduct business as a foreign corporation or, as applicable, limited liability company, taxpayer and other identification numbers, seals, stock transfer books, blank stock certificates, corporate books and records of internal corporate or limited liability company proceedings, tax and accounting records, work papers and other records relating to the organization or maintenance of corporate or limited liability company existence of Sellers and any other records that Sellers are required by law to retain; provided, however, that copies of the foregoing items shall be provided by Sellers to Buyer following the Closing Date upon Buyer’s request at Buyer’s sole expense;

² Assigned Contracts listed on Exhibit A hereto that are related to the Seller’s Specialty business may be added or deleted at any time prior to the Closing Date (as defined herein).

³ Additional assets listed on Exhibit B hereto that are related to the Seller’s Specialty business may be added or deleted at any time prior to the Closing Date (as defined herein).

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(d)           the rights of Sellers under this Agreement and all consideration payable or deliverable to Sellers under this Agreement;

(e)           the capital stock or other equity interests of any Seller;

(f)            any Contract not used solely in the operation or ownership of the Acquired Assets (collectively, the “Excluded Contracts”);

(g)           any Contract that terminates or expires prior to the Closing Date in accordance with its terms or in the ordinary course of business of Sellers;

(h)           all rights (including rights under insurance policies), claims or causes of action with respect to or arising in connection with Excluded Assets;

(i)            all rights (including rights under insurance policies), claims or causes of action arising from or related to facts or circumstances occurring or existing on or prior to the Closing Date;

(j)            all rights, recoveries, refunds and rights of set-off against third parties arising from or related to facts or circumstances occurring or existing on or prior to the Closing Date;

(k)           all deposits (including, with respect to the Excluded Assets, customer deposits and security deposits (whether maintained in escrow or otherwise) for rent, electricity, telephone or otherwise) and prepaid charges and expenses of Sellers that relate exclusively to the Excluded Assets;

(l)            any other tangible or intangible assets not used exclusively in connection with the ownership or operation of the Acquired Assets; and

(m)          the assets set forth on Schedule 1.2(m).

Section 1.3            Assumed Liabilities.  Upon the terms and subject to the conditions of this Agreement, Buyer agrees, effective at the Effective Time, to assume, pay, perform and discharge the following Liabilities (as defined below) (such Liabilities, the “Assumed Liabilities”):

(a)           any and all amounts due and owing in order to cure any defaults under the Assigned Contracts that are required to be cured under the Bankruptcy Code (such amounts, the “Cure Amounts”) due and owing under the Assigned Contracts;

(b)           all of Sellers’ Liabilities under the Assigned Contracts;

(c)           all Liabilities relating to amounts required to be paid by Buyer hereunder;

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(d)           all Transfer Taxes (as defined below) and all Liabilities relating to Taxes (as defined below) imposed on the Acquired Assets that are attributable to any Tax period or year, or portion thereof, that begins on or after the Closing Date (each, a “Post-Closing Tax Period”); and

(e)           all Liabilities relating to or arising from Buyer’s ownership, possession or use of the Acquired Assets from and after the Closing Date.

As used herein, the term “Liability” or “Liabilities” means all liabilities and obligations of any kind and nature, whether known or unknown, express or implied, primarily or secondarily, direct or indirect, absolute, accrued, contingent or otherwise and whether due or to become due.

Section 1.4            Excluded Liabilities.  Except as specifically set forth in Section 1.3, Buyer shall not assume or be liable for any of the Liabilities of Sellers (except to the extent they constitute Assumed Liabilities) set forth below (collectively, the “Excluded Liabilities”):

(a)           all Liabilities of Sellers that relate to any of the Excluded Assets (including under any Excluded Contracts);

(b)           all Liabilities of Sellers for Taxes, other than Transfer Taxes, for any Tax period or year, or portion thereof, that ends before the Closing Date (each, a “Pre-Closing Tax Period”);

(c)           all Liabilities for any legal, accounting, investment banking, brokerage or similar fees or expenses incurred by any Seller or any predecessor of any Seller in connection with, resulting from or attributable to the Bankruptcy Cases or the transactions contemplated by this Agreement or otherwise;

(d)           all indebtedness of any Seller;

(e)           all Liabilities of Sellers related to the right to or issuance of any capital stock or other equity interest of any Seller, including any stock options or warrants;

(f)           all Liabilities of Sellers resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of any person or ownership, lease or license of any properties or assets or any properties or assets previously used by Sellers at any time, or other actions, omissions or events occurring prior to the Closing (as defined below) and which (A) constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of any rule, regulation, treaty or other similar authority or (B) relate to any and all claims, disputes, demands, actions, Liabilities, damages, suits in equity or at law, administrative, regulatory or quasi-judicial proceedings, accounts, costs, expenses, setoffs, contributions, attorneys’ fees or causes of action of whatever kind or character (“Proceeding”) against Sellers, whether past, present, future, known or unknown, liquidated or unliquidated, accrued or unaccrued, pending or threatened;

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(g)           any Liability arising out of any proceeding commenced against Sellers after the Closing and arising out of, or relating to, any occurrence or event happening prior to, on or after the Closing (except that Purchaser shall be liable for all Cure Amounts);

(h)           all accounts payable of Sellers arising prior to the Closing Date (except that Buyer shall be liable for all Cure Amounts);

(i)            any Liability under any Excluded Contract; and

(j)            any Liability of Sellers under this Agreement or any related agreement executed in connection herewith.

ARTICLE II

CONSIDERATION

Section 2.1            Sale Price.  Subject to the terms and conditions hereof, the purchase price for the Acquired Assets is EIGHTEEN MILLION DOLLARS ($18,000,000.00) (the “Purchase Price”), which shall be paid as provided in Section 2.2 and Section 2.3.

Section 2.2            Deposit.  Upon execution of this Agreement and simultaneously therewith, the execution and delivery of the Addendum to the Escrow Agreement (as defined below), on the Effective Date, Buyer shall pay into the escrow account at The Bank of New York Mellon, a New York banking corporation (the “Escrow Agent” and such account, the “Escrow Account”), a deposit equal to 10% of the Purchase Price (such amount, together with all interest earned thereon, the “Deposit”) amounting to ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000.00).  The Deposit shall be held pursuant to the terms of the escrow agreement (the “Escrow Agreement”) and the addendum thereto to be entered into by Buyer, Sellers and the Escrow Agent (the “Addendum to the Escrow Agreement”), each substantially in the form attached hereto as Exhibit D.  The Parties shall equally share the costs related with the Escrow Account.

Section 2.3            Closing.

(a)          The closing of the purchase and sale of the Acquired Assets (the “Closing”) shall occur following entry of the Sale Order by the Bankruptcy Court approving the sale as provided in this Agreement and satisfaction or waiver (in respect of any conditions that are subject to waiver) of the other conditions to Closing set forth in Section 9.1, Section 9.2 and Section 9.3 (the “Closing Date”).  The Closing shall take place at the offices of Akin Gump Strauss Hauer & Feld LLP, located at One Bryant Park, New York, New York or at another location to be agreed upon by the Parties.  If the Closing has not occurred by March 31, 2017 (the “Outside Closing Date”), as a result of delays or a material breach by Buyer under this Agreement, Sellers shall have the right to terminate this Agreement pursuant to Section 12.1 and (a) may market the Acquired Assets and enter into a purchase agreement with a third party and (b) retain the Deposit.  In such case, Buyer relinquishes all its rights to the Deposit.  As used herein, the term “Business Day” means a day on which National Association banks are required to be open for business in the United States.

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(b)           At the Closing, Buyer shall pay directly to Sellers an amount equal to the Purchase Price (i) less the Deposit and (ii) adjusted upward or downward, as appropriate, in an amount to be agreed between the Buyer and Sellers prior to Closing, to take into account any expenses prepaid by Sellers related to the Acquired Assets and any accrued expenses related to the Acquired Assets such as amounts accrued to cover regulatory dry docking expenses (the “Closing Payment”) and Buyer and ISH shall direct the Escrow Agent to release the full amount of the Deposit to Sellers.  If Sellers are ready, willing and able to proceed with the Closing and Buyer does not pay the Closing Payment, as required herein, Sellers shall have no obligation to close the sale of the Acquired Assets to Buyer as contemplated hereunder and Sellers may terminate this Agreement as provided in Section 12.1(d), market the Acquired Assets and enter into a purchase agreement with a third party and retain the Deposit.  In such case, Buyer relinquishes all rights to the Deposit.

(c)           Delivery of the Acquired Assets shall be at their respective locations or at other locations at the time of Closing to be agreed upon by the Parties.

(d)           If the Parties are not able to close by the Closing Date for any reason other than Buyer’s material breach of this Agreement, upon the termination of this Agreement in accordance with its terms, Buyer and ISH shall direct the Escrow Agent to return the Deposit to Buyer and, in addition, shall pay the reasonable, documented out-of-pocket costs and expenses actually incurred by Buyer (including reasonable, documented out-of-pocket attorney's fees) in connection with the negotiation, preparation and performance of this Agreement and the transaction contemplated hereby in an amount not to exceed $500,000 (the “Expense Reimbursement”).

Section 2.4            Wire Instructions.  All payments to Sellers hereunder are to be made in US Dollars in immediately available funds wired in accordance with instructions provided by Sellers.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.1            THE SALE OF THE ACQUIRED ASSETS IS MADE “AS IS, WHERE IS AND WITH ALL FAULTS” AND EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 3.4(F), SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) CONCERNING CLASSIFICATION, VALUE, DESIGN, OPERATION, MERCHANTABILITY, QUALITY, CONDITION OR SEAWORTHINESS OF THE ACQUIRED ASSETS OR THE FITNESS OF THE ACQUIRED ASSETS FOR ANY INTENDED PURPOSE OR USE.

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Section 3.2            BUYER MAKES A FULL WAIVER OF WARRANTY AS TO THE SEAWORTHNESS, REDHIBITION AND CONDITION OF THE ACQUIRED ASSETS (ENVIRONMENTAL AND OTHERWISE), AND ACKNOWLEDGES AND AGREES THAT THIS SALE IS BEING MADE ON AN “AS IS, WHERE IS AND WITH ALL FAULTS” BASIS EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 3.4(F).  BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS RELYING SOLELY ON ITS OWN INSPECTION OF THE ACQUIRED ASSETS AND NOT ON ANY WARRANTIES AND REPRESENTATIONS (VERBAL OR WRITTEN) FROM OR ON BEHALF OF SELLERS AT ANY TIME AS TO THE CONDITION OF THE ACQUIRED ASSETS IN ANY RESPECT, AND THE PURCHASE PRICE TAKES INTO CONSIDERATION THE CONDITION OF THE ACQUIRED ASSETS.  BUYER WAIVES ALL WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION OR SEAWORTHNESS OF THE ACQUIRED ASSETS, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL OR ENVIRONMENTAL CONDITION THEREOF, OR AS TO THE ABSENCE OF REDHIBITORY OR LATENT DEFECTS OR ANY VICES (WHETHER APPARENT, EASILY DISCOVERABLE OR HIDDEN, KNOWN OR UNKNOWN), OR AS TO FITNESS FOR ORDINARY USE OR A PARTICULAR PURPOSE OR ITS SUITABILITY OR CAPACITY, AND BUYER HEREBY RELEASES SELLERS FROM ANY LIABILITY THEREFOR, AND PARTICULARLY FOR ANY CLAIM OR CAUSE OF ACTION FOR REDHIBITION OR FOR REDUCTION OF PURCHASE PRICE.  BUYER ACKNOWLEDGES THAT THE FOREGOING WAIVERS HAVE BEEN CALLED TO BUYER’S ATTENTION AND READ AND EXPLAINED TO BUYER AND THAT SAID WAIVERS ARE A MATERIAL AND INTEGRAL CONSIDERATION FOR THIS SALE.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER HEREBY SPECIFICALLY ACKNOWLEDGES AND AGREES THAT UPON AND AFTER EXECUTION OF THE SALE CONTEMPLATED BY THIS AGREEMENT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER SHALL HAVE NO RECOURSE WHATSOEVER AGAINST SELLERS FOR ANY DEFECTS IN THE ACQUIRED ASSETS, WHETHER SUCH DEFECTS ARE LATENT, VISIBLE OR HIDDEN.

Section 3.3             Buyer hereby represents, warrants and covenants to Sellers the following as of the date hereof and as of the Closing Date:

(a)           Buyer is duly incorporated and validly existing under the laws of the Republic of the Marshall Islands and has full legal right, power and authority to enter into this Agreement and to perform its obligations hereunder.

(b)           All necessary corporate action with respect to Buyer has been taken to duly authorize the transactions contemplated by, and to execute and deliver the documents provided under, this Agreement;

(c)           This Agreement and the documents contemplated hereby have been duly executed and delivered by Buyer, and assuming the due authorization, execution and delivery by Sellers thereto, are valid and binding agreements of Buyer, enforceable against Buyer in accordance with their terms, except as such enforcement is subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors’ rights (collectively, the “Enforceability Exceptions”);

(d)           The execution and delivery of this Agreement, and completion of all transactions herein contemplated, does not:

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(i)            except as set forth on Schedule 3.3(d) (the “Required Consents”), conflict with, violate, result in a breach or right of termination or acceleration, constitute a default or require any consent or authorization under any other terms, conditions or provisions of any mortgage, indenture, agreement, loan, guarantee, note, bond, permit, license, lease, grant, patent or other undertaking or authorization, written or oral, to or by which Buyer is a party or is bound;

(ii)           conflict with, result in a breach of or require any consent under any of the terms, conditions or provisions of Buyer’s certificate of incorporation, bylaws or equivalent governing documents; or

(iii)          result in a violation by Buyer of any law, judgment, order (including executive order), award, writ, injunction or decree applicable to, or binding upon, Buyer;

(e)           Buyer has sufficient funds readily available, or written commitments from financing sources to make the necessary funds readily available, to pay the Purchase Price and consummate the transactions contemplated by this Agreement; and

Section 3.4            Sellers hereby represent, warrant and covenant to Buyer the following as of the date hereof and as of the Closing Date:

(a)           Sellers are duly incorporated and validly existing under the laws of the respective jurisdictions indicated in the Preamble, and have full legal right, power and authority to enter into this Agreement, and to perform their obligations hereunder, subject to entry of the Sale Order by the Bankruptcy Court;

(b)           All necessary corporate or limited liability company action, as applicable, has been taken to duly authorize the transactions contemplated by, and to execute and deliver the documents provided under, this Agreement;

(c)           This Agreement and the documents contemplated hereby have been duly executed and delivered by Sellers, and assuming the due authorization, execution and delivery by Buyer thereto, and subject to the Bankruptcy Court entering the Sale Order, are valid and binding agreements of Sellers, enforceable against Sellers in accordance with their terms, except as such enforcement is subject to the Enforceability Exceptions;

(d)           The execution and delivery of this Agreement, and completion of all transactions herein contemplated, does not:

(i)            conflict with, result in a breach of or require any consent under any of the terms, conditions or provisions of Sellers’ certificates of incorporation, bylaws or equivalent governing documents; or

(ii)            result in a violation by Sellers of any law, judgment, order (including executive order), award, writ, injunction or decree applicable to, or binding upon, Sellers; and

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(e)           Sellers (i) are the legal and beneficial owners of, and have good and marketable title to, the owned Acquired Assets and (ii) hold a valid leasehold interest in the leased Acquired Assets, and, as of the Closing Date, the Acquired Assets will be free and clear of all liens and any other encumbrances, claims, security interests, mortgages or pledges (collectively, “Liens”), except for Permitted Liens (as defined below), that may affect legal transfer of title to Buyer at the Closing.

As used herein, “Permitted Liens” means (a) mechanics’, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the ordinary course of business; (b) liens for Taxes, assessments, or governmental charges or levies not yet due and payable; (c) Liens securing indebtedness and (d) the Liens set forth on Schedule 3.4(e).

ARTICLE IV

PRE-CLOSING COVENANTS

Section 4.1            Conduct of Business.

(a)           Except as may be required by the Bankruptcy Court and the Chapter 11 Cases, from the date hereof until the Closing Date, Sellers shall use commercially reasonable efforts to maintain the Acquired Assets at their current respective locations (or in the case of the Vessels, shall use commercially reasonable efforts to continue to operate the Vessels in the ordinary course).

(b)           Except as may be required by the Bankruptcy Court and the Chapter 11 Cases or otherwise in the ordinary course, from the date hereof until the Closing Date, Sellers shall not sell, lease, or otherwise dispose of, or incur any Liens, other than Permitted Liens, on, any of the Acquired Assets or agree or commit to do any of the foregoing.

Section 4.2            Government Approvals.  Buyers and Sellers shall cooperate and use commercially reasonable efforts to obtain the consents, approvals or authorizations of the applicable Governmental Authorities (as defined below) set forth on Schedule 4.2 (the “Required Governmental Approvals”).  From and after the date hereof through the Closing Date, each Party shall take such actions necessary to preserve, and refrain from taking any actions that would reasonably be expected to jeopardize, the ability of the Required Governmental Approvals to be obtained.

Section 4.3            Access to Records and Properties; Confidentiality.  Intentionally omitted.

Section 4.4            Public Announcements.  The Parties agree to consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transaction contemplated hereby, provided, however, that the Sellers may file any applications, motions or other pleadings in the Bankruptcy Cases they deem necessary or appropriate, and except for any press releases and public statements the making of which may be required by applicable law or any listing agreement with any national securities exchange (including any applications, motions or other pleadings deemed necessary or appropriate by the Sellers to be filed in the Bankruptcy Cases), will not issue any press release or make any such public statement prior to such consultation.

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Section 4.5            Notice of Certain Events.  Sellers shall promptly notify Buyer of:

(a)           any notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement;

(b)           any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

(c)           any actions, suits, claims, investigations or proceedings commenced relating to the Acquired Assets.

Section 4.6            Sufficient Funds.  Buyer shall ensure that on the Closing Date, Buyer will have access to sufficient funds to pay (i) all Cure Amounts with respect to the Assigned Contracts, (ii) the Closing Payment and (iii) all other cash payment obligations of Buyer contained in this Agreement.

Section 4.7            Consents.  Sellers will use commercially reasonable efforts to receive the Required Consents.

Section 4.8            Insurance.  Sellers will use commercially reasonable efforts to keep their current insurance coverage for the Acquired Assets until the Closing.  Without limiting Sellers’ obligations under Section 6.1, Buyer understands and agrees that from and after the Closing, no insurance coverage under any insurance policy issued to Sellers or any of their Affiliates shall be made available to or cover Buyer.

Section 4.9            Alternate Transactions.  Nothing in this Agreement shall restrict Sellers’ right to pursue one or more Alternate Transactions (as defined below), including marketing Sellers’ assets (including the Acquired Assets) or providing due diligence materials, solely to the extent permitted by an order, in substantially the form attached hereto as Exhibit E, with such changes as may be reasonably acceptable to the Parties, issued by the Bankruptcy Court (the “Bidding Procedures Order”) that, among other things, establishes procedures for an auction process to solicit competing bids.

ARTICLE V

POST-CLOSING COVENANTS

Section 5.1            Sellers’ Marks.  As promptly as practicable following the Closing, but in any event no later than 30 days thereafter, Buyer shall remove, or cause to be removed any markings bearing any trademarks, trade names or logos of Sellers or any of their Affiliates or any predecessor entities of Sellers (including any variations or derivations thereof) that are not Acquired Assets, including those set forth on Schedule 5.1.

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Section 5.2            Access to Records and Properties after Closing.  Following the Closing, Buyer and Sellers agree to permit their respective representatives to have access, at reasonable times and in a manner so as not to unreasonably interfere with their normal business operations, to the books and records acquired pursuant to this Agreement (or, in the case of Buyer, books and records relating to the Excluded Assets) so as to enable Buyer and Sellers to prepare Tax, financial or court filings or reports, to respond to court orders, subpoenas or inquiries, investigations, audits or other proceedings of Governmental Authorities, to reconcile and resolve claims, to facilitate the wind-down of Sellers’ estates, if applicable, and the Bankruptcy Cases, and to prosecute and defend legal actions or for other similar purposes (other than any such actions that are between or among the Parties).  If either Party desires to dispose of any such records, such Party shall, prior to such disposition, provide the other Party with a reasonable opportunity to remove such of the records to be disposed of at the removing Party’s expense.  The Parties hereto shall cooperate with one another in the collection of historical invoices, preparation of Tax filings and similar accounting functions following Closing.  Buyer and its subsidiaries shall, and shall cause any of their assignees of the rights and obligations hereunder to, (A) permit Sellers and any successors or assigns (including a plan administrator or trustee of a liquidating trust), their counsel, financial and tax advisors, consultants and other representatives reasonable access during normal business hours and after reasonable prior written request therefor to the financial and other books and records relating to Acquired Assets (whether in documentary or data form); (B) provide information reasonably requested in connection with the preparation of any Tax returns, amended Tax returns or claims for refund by Sellers’ estate; (C) provide information reasonably requested related to the prosecution, reconciliation, investigation or resolution of any pending or potential claims or causes of action, including avoidance actions by Sellers’ estate; and (D) provide information reasonably requested related to the resolution or reconciliation of claims filed against Sellers’ bankruptcy estates.

ARTICLE VI

CERTAIN ADDITIONAL COVENANTS

Section 6.1            Transfer of Acquired Assets.  Buyer shall obtain title to and assume the risk of loss for the Acquired Assets immediately upon the Closing.  Other than as expressly set forth elsewhere in this Agreement, any costs associated with the Acquired Assets incurred before the Closing shall be for the account of Sellers, and any costs associated with the Acquired Assets incurred after the Closing shall be for the account of Buyer, including the cost, if any, to store the Acquired Assets where the Acquired Assets are currently located or to transport the Acquired Assets to the delivery point as mutually agreed by the Parties.

Section 6.2            Assigned Contracts.

(a)           Notwithstanding anything herein to the contrary, this Agreement shall not constitute an agreement to assign any Assigned Contract if, notwithstanding the provisions of Sections 363 and 365 of the Bankruptcy Code, an attempted assignment thereof, without the consent of any other person party thereto, would constitute a breach thereof (unless the restrictions on assignment would be rendered ineffective pursuant to Sections 9-406 through 9-409, inclusive, of the Uniform Commercial Code, as amended).  If, notwithstanding the provisions of Sections 363 and 365 of the Bankruptcy Code, such consent or approval is required but not obtained, neither Sellers nor Buyer shall be in breach of this Agreement nor shall the Purchase Price be adjusted or the Closing delayed; provided that Sellers shall cooperate with Buyer without further consideration, in any reasonable arrangement designed to provide Buyer with all of the benefits of or under any such Assigned Contract, including but not limited to enforcement for the benefit of Buyer of any and all rights of Sellers against any person party to the Assigned Contract arising out of the breach or cancellation thereof by such person; provided, however, that after Closing, Buyer shall be responsible for all payment and other obligations under, and for all costs of enforcing rights under, such Assigned Contract to the same extent as if such Assigned Contract had been assigned.  Any assignment to Buyer of any Assigned Contract that shall, notwithstanding the provisions of Sections 363 and 365 of the Bankruptcy Code, require the consent or approval of any person for such assignment as aforesaid shall be made subject to such consent or approval being obtained.

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(b)           Buyer shall, on or prior to the Closing, cure any and all defaults under the Assigned Contracts that are required to be cured under the Bankruptcy Code.  Sellers shall provide Purchaser with a schedule of proposed Cure Amounts at least three (3) Business Days prior to giving notice thereof to parties required to receive notice under the Bankruptcy Code and Bankruptcy Rules.

(c)           With respect to each Assigned Contract, Buyer shall provide adequate assurance of the future performance of such Assigned Contract by Buyer.  Buyer shall take such actions as may be reasonably requested by Sellers to assist Sellers in obtaining the Bankruptcy Court’s entry of the Sale Order and any other order of the Bankruptcy Court reasonably necessary to consummate the transactions contemplated by this Agreement.

Section 6.3            DNB Singapore Account.  At or prior to Closing, ISH and P.T. Amas will cause the signatories on the DNB Singapore Account to be changed as instructed by Buyer.

Section 6.4            Personally Identifiable Information.  Buyer shall honor and observe, in connection with the transactions contemplated by this Agreement, any and all policies of Sellers in effect on the Petition Date prohibiting the transfer of personally identifiable information about individuals and otherwise comply with the requirements of Section 363(b)(l)(A) of the Bankruptcy Code.

Section 6.5            Further Assurances.

(a)           At the request and the sole expense of the requesting party, Buyer or Sellers, as applicable, shall execute and deliver, or cause to be executed and delivered, such documents as Buyer or Sellers, as applicable, or their respective counsel may reasonably request to effectuate the purposes of this Agreement and transactions contemplated hereby.

(b)           Each party shall use commercially reasonable efforts to take, or cause to be taken, all other actions and to do, or cause to be done, all other things reasonably necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated hereby.

ARTICLE VII

EMPLOYEE MATTERS

Section 7.1            Employees.  Buyer shall be neither obligated to nor prohibited from offering employment to any employee of Sellers from and after Closing.

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ARTICLE VIII

BANKRUPTCY COURT MATTERS

Section 8.1            Motions.  Sellers shall promptly file with the Bankruptcy Court a motion or motions (the “Motion”) seeking the Bankruptcy Court’s approval of the Bidding Procedures Order and the Sale Order, in form determined by Sellers and reasonably acceptable to Buyer.  Sellers shall affix or submit to the Bankruptcy Court a true, correct and complete copy of this Agreement as an exhibit to the Motion filed with the Bankruptcy Court.  Sellers and Buyer acknowledge that this Agreement and the sale of the Acquired Assets are subject to higher or otherwise better bids at the auction to be conducted by the Sellers in accordance with the Bidding Procedures Order and Bankruptcy Court approval.  Sellers and Buyer acknowledge that to obtain Bankruptcy Court approval of this Agreement and the transactions contemplated hereby, (i) Sellers must demonstrate that they have taken reasonable steps to obtain the highest or otherwise best offer available for the Acquired Assets, and that such demonstration shall include giving notice of the transactions contemplated by this Agreement to creditors and other interested parties as required by the local rules of the Bankruptcy Court and Bidding Procedures Order, (ii) subject to receipt by Sellers of one or more higher or otherwise better bids, Sellers shall have conducted the auction in accordance with the Bidding Procedures Order, and (iii) with respect to the Assigned Contracts, Buyer must provide adequate assurance of future performance under such agreements.

Section 8.2            Procedure.  Subject to their obligations as debtors-in-possession, Sellers shall promptly make any filings, take all actions and use all commercially reasonable efforts to obtain any and all relief from the Bankruptcy Court that is necessary or appropriate to consummate the transactions contemplated by this Agreement.  Sellers agree to use commercially reasonable efforts to prosecute the entry of the Bidding Procedures Order and the Sale Order.  In the event the entry of the Bidding Procedures Order or the Sale Order shall be appealed (or if any petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or reargument shall be filed with respect to the Bidding Procedures Order, Sale Order or other such order), Sellers and Buyer shall cooperate and use their respective reasonable efforts to defend and obtain an expedited resolution of any such appeal, petition or motion.

ARTICLE IX

CONDITIONS PRECEDENT

Section 9.1            Mutual Conditions Precedent.  The obligations of Buyer and Sellers to consummate the transactions to be performed in connection with the Closing are, in all material respects, subject to satisfaction or waiver by Buyer and Sellers of the following conditions precedent (provided that the condition in Section 9.1(a) shall not be subject to waiver):

(a)           the Sale Order shall have been entered by the Bankruptcy Court and shall not be subject to a stay pending appeal;

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(b)           no preliminary or permanent injunction or other order of any court or any foreign, federal, state, local or other governmental, administrative or regulatory authority, body, agency, court, tribunal or similar entity having competent jurisdiction (a “Governmental Authority”) (other than the Bankruptcy Court) issues an order or law that prevents the consummation of the transactions contemplated hereby shall be in effect;

(c)           the Required Governmental Approvals shall have been obtained;

(d)           all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 applicable to this Agreement shall have expired or been terminated; and

(e)           Subject to Section 6.2(a), the Assigned Contracts designated hereunder as Assigned Contracts shall be so assumed, sold and assigned to Buyer by order of the Bankruptcy Court reasonably satisfactory to the Parties.

Section 9.2           Buyer’s Conditions Precedent.  The obligations of Buyer to consummate the transactions to be performed by it in connection with the Closing are, in all material respects, subject to satisfaction by Sellers or waiver by Buyer of the following conditions precedent:

(a)           The representations and warranties of Sellers set forth in Section 3.4 shall be true and correct in all respects at the Closing except where the failure of such representations and warranties to be true and correct in all respects does not have a material adverse effect with respect to the Acquired Assets;

(b)          Sellers shall have performed or complied in all material respects with all covenants and agreements they are required to perform or comply with hereunder at or prior to the Closing;

(c)           Sellers shall have obtained any other authorization, license or approval under applicable law for Sellers to consummate the transactions contemplated by this Agreement;

(d)           Sellers shall have obtained the Required Consents.

Section 9.3            Sellers’ Conditions Precedent.  The obligations of Sellers to consummate the transactions to be performed by it in connection with the Closing are, in all material respects, subject to satisfaction by Buyer or waiver by Sellers of the following conditions precedent:

(a)           The representations and warranties of Buyer set forth in Section 3.3 shall be true and correct in all material respects at the Closing except where the failure of such representations and warranties to be true and correct in all respects does not a material adverse effect on the ability of Buyer to satisfy its obligations hereunder and consummate the transactions contemplated hereby;

(b)           Buyer shall have performed or complied in all material respects with all covenants and agreements it is required to perform or comply with hereunder at or prior to the Closing; and

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(c)           Buyer shall have obtained any other authorization, license or approval under applicable law for Buyer to consummate the transactions contemplated by this Agreement.

ARTICLE X

CLOSING DELIVERABLES

Section 10.1          Documents to be Delivered by Sellers and Buyer.  On the Closing Date, representatives of Sellers and Buyer shall meet as contemplated above for the purpose of completing the sale and purchase of the Acquired Assets.

(a)           Sellers’ Deliverables. Simultaneously with the delivery of the Closing Payment and delivery of the items described in Section 10.1(b) below, Sellers shall deliver to Buyer:

(i)            joint escrow instructions to the Escrow Agent releasing the Deposit to Sellers; and

(ii)           the instruction contemplated by Section 6.3.

(b)           Buyer’s Deliverables.  At the Closing Date, Buyer shall deliver to Sellers:

(i)            joint escrow instructions to the Escrow Agent releasing the Deposit to Sellers;

(ii)           the Closing Payment; and

(iii)          A certified copy of the resolution of the board of directors of Buyer authorizing the execution of this Agreement and the purchase of the Acquired Assets.

ARTICLE XI

INDEMNIFICATION

Section 11.1          The (a) representations and warranties of Sellers and (b) covenants and agreements of Sellers that by their terms are to be performed prior to Closing, contained in this Agreement, the MOAs or any other certificate or other writing delivered in connection herewith, shall not survive the Closing.  The covenants and agreements contained herein that by their terms are to be performed after Closing shall survive indefinitely.

Section 11.2          From and after the Closing, Buyer will defend, indemnify, and hold Sellers, their Affiliates and each of their respective officers, directors, managers, partners, employees, equityholders, agents and other representatives (the “Sellers Indemnified Parties”) harmless from and pay any and all Damages (as defined below), directly or indirectly, resulting from, relating to, arising out of, or attributable to any of the following: (i) breach of any representation or warranty by Buyer under Section 3.3 of this Agreement, (ii) breach by Buyer of any covenant or obligation of Buyer in this Agreement, and (iii) any Assumed Liability.

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Section 11.3          For the avoidance of doubt, and except as required elsewhere in this Agreement, Buyer will protect, defend, forever discharge, release, waive, indemnify and hold Sellers Indemnified Parties harmless from and against Damages and causes of actions for personal injuries, death, or property Damages of any kind and nature sustained by or purported to be sustained or brought by any person, entity or vessel, whomsoever made and howsoever arising directly or indirectly in connection with or related to this Agreement or the Acquired Assets, after the Closing Date.

Section 11.4          ALL OF THE INDEMNITIES AND ALLOCATIONS OF RISK CONTAINED IN THIS ARTICLE XI OR ELSEWHERE IN THIS AGREEMENT SHALL APPLY (TO THE EXTENT PERMITTED BY LAW), NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY PERSON OR PARTY, STRICT LIABILITY, UNSEAWORTHNESS, LIABILITY IMPOSED BY STATUTE, OR ANY OTHER BREACH OF OBLIGATION OF ANY PERSON OR ANY OTHER EVENT OR CONDITION.

Section 11.5          For purposes of this Agreement, “Damages” means all damages, losses, Liabilities, payments, amounts paid in settlement, obligations, fines, penalties, costs, and expenses (including reasonable fees and expenses of legal counsel) of any kind or nature whatsoever.

ARTICLE XII

TERMINATION

Section 12.1          Subject to Section 12.2, this Agreement may be terminated (except for the provisions referenced in Section 12.2) at any time prior to the Closing upon the occurrence of any one or more of the following:

(a)           by the mutual written agreement of the Parties;

(b)           by either Party, if (i) any law or order becomes final and effective that prohibits and makes illegal the consummation of the transactions contemplated by this Agreement, upon notification to the non-terminating Party by the terminating Party, (ii) any Governmental Authority (other than the Bankruptcy Court) issues an order, decree or ruling prohibiting the transactions contemplated by this Agreement and the MOAs, or (iii) if the Closing has not occurred by the Outside Closing Date;

(c)           by Buyer, (i) if Sellers shall have breached or failed to perform in any material respect any of their representations, warranties, covenants or other agreements contained in this Agreement the result of which causes a failure of the conditions set forth in Section 9.1 and Section 9.2 to be satisfied, or (ii) if all of the conditions set forth in Section 9.1 and Section 9.2 have been satisfied or waived, as applicable, and Sellers nevertheless refuse or fail to Close the transactions contemplated in this Agreement; provided, Sellers shall first be entitled to ten (10) days’ prior notice and the opportunity to cure, and provided furthermore that Buyer shall not be in breach in any material respect of this Agreement at such time;

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(d)           by Sellers, (i) if Buyer shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement the result of which causes a failure of the conditions set forth in Section 9.1 and Section 9.3 to be satisfied, or (ii) if all of the conditions set forth in Section 9.1 and Section 9.3 have been satisfied or waived, as applicable, and Buyer nevertheless refuses or fails to Close the transactions contemplated in this Agreement; provided, Buyer shall first be entitled to ten (10) days’ prior notice and the opportunity to cure, and provided furthermore that Buyer shall not be in breach in any material respect of this Agreement at such time;

(e)           by Sellers if Sellers execute a definitive agreement with a third party for the acquisition of all or substantially all of the Acquired Assets (an “Alternate Transaction”); or

(f)            by Sellers, if Sellers determine for any reason to terminate the sale of the Acquired Assets.

The Party exercising its rights to terminate pursuant to Section 12.1 shall give notice of such termination to the other Parties.

Section 12.2           Effect of Termination.

(a)           If a Party is entitled to terminate this Agreement in accordance with Section 12.1 then the Party so entitled to terminate this Agreement shall be entitled to the remedy for such Party set forth in Section 2.3, as such Party’s sole and exclusive remedy hereunder.

(b)           If the Agreement is terminated by a Party pursuant to Section 12.1, then except for the provisions of Section 2.3, ARTICLE XI, this Section 12.2, ARTICLE XIV, ARTICLE XV, ARTICLE XVI and ARTICLE XVII, which provisions shall survive any such termination, the Parties shall have no further Liability or obligation hereunder.

ARTICLE XIII

TAXES; BULK SALES LAWS

Section 13.1          Cooperation.  Buyer and Sellers agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating to the Acquired Assets (including access to books and records and Tax returns and related working papers dated before Closing) as is reasonably necessary for the filing of all Tax returns, the making of any election relating to Taxes, the preparation for any audit by any taxing authority, the prosecution or defense of any claims, suit or proceeding relating to any Tax, and the claiming by Buyer of any federal, state or local business tax credits or incentives that Buyer may qualify for in any of the jurisdictions in which any of the Acquired Assets are located; provided, however, that neither Buyer nor any Seller shall be required to disclose the contents of its income Tax returns to any Person other than the Parties.  Any expenses incurred in furnishing such information or assistance pursuant to this Section 13.3 shall be borne by the Party requesting it.  For purposes of this Agreement, “Tax” or “Taxes” means any federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not.

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Section 13.2          Waiver of Bulk Sales Laws.  To the greatest extent permitted by applicable law, Buyer and Sellers hereby waive compliance by Buyer and Sellers with the terms of any bulk sales or similar laws in any applicable jurisdiction in respect of the transactions contemplated by this Agreement.  Buyer shall indemnify Sellers from and hold Sellers harmless from and against any Damages (including reasonable attorneys’ fees) resulting from or arising out of (i) the Parties’ failure to comply with any such bulk sales laws in respect of the transactions contemplated by this Agreement or (ii) any action brought or levy made as a result thereof.  The Sale Order shall exempt Sellers and Buyer from compliance with any such laws.

ARTICLE XIV

BROKERAGE

Section 14.1          Sellers shall have no Liability whatsoever for the payment of any commission or brokerage fee to any broker or agent for which Buyer could become liable.  Buyer agrees to indemnify and hold harmless Sellers from and against all loss, cost, damage, or expense arising out of claims for any other fees or commissions of brokers or agents employed or alleged to have been employed by Buyer in connection with the sale and purchase provided for herein.

Section 14.2          Buyer shall have no Liability whatsoever for the payment of any commission or brokerage fee to any broker or agent for which Sellers could become liable.  Sellers agree to jointly and severally indemnify and hold harmless Buyer from and against all loss, cost, damage, or expense arising out of claims for any other fees or commissions of brokers or agents employed or alleged to have been employed by Sellers in connection with the sale and purchase provided for herein.

ARTICLE XV

COST OF THE TRANSACTION

Whether or not the transactions contemplated hereby shall be consummated, except as otherwise expressly provided herein, the Parties agree that each Party will pay the fees, expenses and disbursements of such Party and its agents, representatives, and counsel incurred in connection with the subject matter of this Agreement.  Without limiting the generality of the foregoing, Buyer shall bear the costs incurred by it in carrying out any of its inspections, and for any expenses and fees arising from the registration of the Vessels under Buyer’s flag.

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ARTICLE XVI

NOTICES

Any notice, demand or communication required, permitted or desired to be given hereunder must be given in writing and shall be deemed effectively given upon receipt and shall be personally delivered, telecopied, e-mailed or delivered by express international courier, addressed as follows:

Sellers:

International Shipholding Corporation

601 Poydras Street, Suite 1850

New Orleans, Louisiana 70130

Attn: Manny Estrada

Fax: +1-251-706-6919

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

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

Bank of America Tower

New York, New York 10036-6745

Attn: David Botter, Stephen B. Kuhn and Patrick Rice

Fax: +1-212-872-1002

Email: dbotter@akingump.com, skuhn@akingump.com and

price@akingump.com

and

Akin Gump Strauss Hauer & Feld LLP

1700 Pacific Avenue

Suite 4100

Dallas, Texas 75201

Fax: +1-214-969-4343

Attn: Sarah Link Schultz

E-mail: sschultz@akingump.com

Buyer:

J Line Corporation

c/o Mr. Martin Sosland

Butler Snow LLP

5430 LBJ Freeway, Suite 1200

Dallas, Texas 75240

Fax:  +1-469-680-5501

Email:  martin.sosland@butlersnow.com

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

Butler Snow LLP

5430 LBJ Freeway, Suite 1200

Dallas, Texas 75240

Attn:  Martin A. Sosland

Fax:  +1-469-680-5501

Email:  martin.sosland@butlersnow.com

or to such other address, and to the attention of such other person or officer, as any Party may designate by notice.

ARTICLE XVII

GENERAL

Section 17.1          Entire Agreement.  This Agreement supersedes all previous agreements, and, together with the Sale Order and the Bidding Procedures Order, constitutes the entire agreement of whatsoever kind or nature existing between or among the Parties respecting the subject matter of this Agreement.  As between or among the Parties, no oral statements, prior correspondence (including any email correspondence), schedules, lists, brochures, drawings or written material of any kind not specifically incorporated herein shall be of any force and effect, and shall not be relied upon by the other Party.  All prior representations or agreements, whether written or verbal, not expressly incorporated herein, are superseded.

Section 17.2          Waiver of Consequential Damages.  In no event shall either Party be liable to the other Party for, and each Party expressly waives against the other Party, any claim for consequential, punitive, incidental, special or indirect loss or damages, including but not limited to loss of revenue, loss of profit or use in any way arising out, incident to or in connection with this Agreement.

Section 17.3          Exclusive Remedy.  Except as specifically set forth in this Agreement or the MOAs, effective as of the Closing, Buyer hereby waives any rights and claims Buyer may have against Sellers or their Affiliates, whether in law or equity, relating to (i) any breach of representation, warranty, covenant or agreement contained herein occurring on or prior to the Closing, (ii) the Acquired Assets or (iii) the Assumed Liabilities.  Buyer and Sellers acknowledge and agree that if this Agreement is terminated for any reason, the provisions of Section 2.3 and Section 12.2 shall be the sole and exclusive remedies of Buyer for any beach of the representations, warranties, covenants or agreements contained herein.

Section 17.4          Choice of Law.  The Parties agree that this Agreement shall be governed by and construed in accordance with the United States Bankruptcy Code, United States Maritime Law (and New York law to the extent not covered by the United States Bankruptcy Code or United States Maritime Law).  The Bankruptcy Court shall have jurisdiction over the sale or any dispute with respect thereto.

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Section 17.5           Jurisdiction; Venue.

(a)           Prior to the closing of the Chapter 11 Cases, except as otherwise expressly provided in this Agreement, the Parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in the Bankruptcy Court, and each of the parties hereby irrevocably consents to the jurisdiction of the Bankruptcy Court (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in the Bankruptcy Court or that any such suit, action or proceeding which is brought in the Bankruptcy Court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of the Bankruptcy Court.  Without limiting the foregoing, each Party agrees that service of process on such party as provided in ARTICLE XVI shall be deemed effective service of process on such party.

(b)           Upon the closing of the Chapter 11 Cases, except as otherwise expressly provided in this Agreement, the Parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in ARTICLE XVI shall be deemed effective service of process on such Party.

Section 17.6          Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 17.7          Headings.  The headings contained in this Agreement are included for purposes of convenience only, and do not affect the meaning or interpretation of this Agreement.

Section 17.8          Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if drafted jointly by the Parties and no presumption or burden of proof must arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  The word “including” shall mean including without limitation.  Any reference to the singular in this Agreement shall also include the plural and vice versa.

21

Section 17.9          Amendments; Waivers.  No amendment, modification, replacement, termination or cancellation of any provision of this Agreement will be valid, unless the same shall be in writing and signed by Buyer and Sellers.  No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence.

Section 17.10        Assignment.  Neither this Agreement, nor any of its rights, interests, or obligations hereunder, may be assigned by any Party without the prior written consent of the other Party, except that Buyer may assign its rights and obligations hereunder to an Affiliate upon providing notice to Sellers; provided, however, that no such assignment by Buyer shall relieve Buyer of its obligations under this Agreement.

Section 17.11        Binding Effect; Third Party Beneficiaries.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other party hereto.  All of the terms and provisions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the Parties and their respective successors and permitted assigns.  Except for Seller Indemnified Parties, no provision of this Agreement is intended to confer upon any person other than the Parties hereto any rights or remedies hereunder.

Section 17.12        Severability.  The invalidity, illegality or unenforceability of any provision or any part of any provision of this Agreement shall not affect the continuation in force of such other part or the remainder of this Agreement.

Section 17.13        Counterparts.  This Agreement may be executed in any number of counterparts by the Parties hereto on separate counterparts, each of which when executed and delivered shall constitute an original, but all of which shall together constitute one and the same instrument.  Any document or signature delivered by facsimile or electronic transmission (including .pdf) shall be deemed an original executed document for all purposes.

[Remainder of Page Intentionally Left Blank]

22

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in multiple originals by their duly authorized officers, all as of the day and year first above written.

SELLERS:
INTERNATIONAL SHIPHOLDING CORPORATION
By:	/s/ M. Estrada
Name:	M. Estrada
Title:	CFO
LCI SHIPHOLDINGS, INC.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
GULF SOUTH SHIPPING PTE LTD.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
MARCO SHIPPING Company (PTE) LTD.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
LCI SHIPHOLDINGS, INC.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
N.W. JOHNSEN & CO., Inc.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:

[Signature Page to Asset Purchase Agreement]

SELLERS (CONT.)
MPV NETHERLANDS C.V.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
MPV NETHERLANDS COÖPERATIEF U.A.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:
MPV NETHERLANDS V.B.
By:	/s/ M. Estrada
Name:	M. Estrada
Title:

[Signature Page to Asset Purchase Agreement]

BUYER:
J LINE CORPORATION
By:	/s/ Erik L. Johnsen
Name:	Erik L. Johnsen
Title:	President

[Signature Page to Asset Purchase Agreement]

EXHIBIT A – Assigned Contracts

EXHIBIT B – Assets

SCHEDULE 1.2(m) – Excluded Assets

SCHEDULE 3.3(d) – Required Consents

SCHEDULE 3.4(e) – Permitted Liens

SCHEDULE 4.2 – Required Governmental Approvals

SCHEDULE 5.5 – Sellers’ Marks

EX-99.1

Exhibit 99.1

 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating)  CaPg 2 of 1  5  Monthly Operating Report - Southern District of New YorkSchedule of Cash Receipts & Disbursements  Reporting Period: September-16  Debtor Name  Account #  Beginning Book  Third Party  Intercompany  Deposits per Bank  Net Deposits in Total Cash Receipts  Intercompany  Third Party  Disbursements per  Net Outstanding Total Cash  FX Gain/  Ending Book  (Last 4 digits)  Balance  Deposits  Deposits  Statement  Transit  Disbursements  Disbursements  Bank Statement  Checks  Disbursements  (Loss)  Balance  International Shipholding Corporation  2907  $  5,779.28  $  -  $  -  $  -  $  -  $  -  $  -  $  2,643.94  $  2,643.94  $  -  $  2,643.94  $  -  $  3,135.34  International Shipholding Corporation  1639  10,007.40  -  -  -  -  -  -  -  -  -  -  -  10,007.40  International Shipholding Corporation  1314  3,839.90  -  280,000.00  280,000.00  -  280,000.00  160,000.00  118,656.51  278,656.51  -  278,656.51  -  5,183.39  International Shipholding Corporation  4643  5,379,694.75  8,402,334.63  18,968,000.00  27,370,334.63  -  27,370,334.63  2,518,000.00  18,666,629.65  21,184,629.65  28,948.64  21,213,578.29  -  11,536,451.09  International Shipholding Corporation  6001  1,427.50  -  -  -  -  -  -  75.00  75.00  -  75.00  -  1,352.50  International Shipholding Corporation  8174  21,597.10  -  -  -  -  -  -  1,002.21  1,002.21  -  1,002.21  -  20,594.89  International Shipholding Corporation  9131  24,406.31  1.10  -  1.10  -  1.10  -  -  -  -  -  -  24,407.41  International Shipholding Corporation  3120  1,052,432.37  -  -  -  -  -  -  -  -  -  -  -  1,052,432.37  N.W. Johnson & Co. Inc  8364  29,486.25  91,192.02  -  91,192.02  -  91,192.02  100,000.00  -  100,000.00  -  100,000.00  -  20,678.27  Coastal Carriers, Inc.  4547  11,529.34  -  -  -  -  -  -  -  -  -  -  -  11,529.34  U.S. United Ocean Services, LLC  1715  58,804.25  3,769.37  10,000.00  13,769.37  -  13,769.37  54,762.16  9,962.69  64,724.85  -  64,724.85  -  7,848.77  U.S. United Ocean Services, LLC  3712  (48,018.71)  -  54,762.16  54,762.16  -  54,762.16  -  54,762.16  54,762.16  (48,015.13)  6,747.03  -  (3.58)  U.S. United Ocean Services, LLC  1468  -  -  3,486,190.96  3,486,190.96  -  3,486,190.96  3,485,000.00  1,190.96  3,486,190.96  -  3,486,190.96  -  -  U.S. United Ocean Services, LLC  2260  460,674.14  4,233,621.53  -  4,233,621.53  -  4,233,621.53  3,486,190.96  -  3,486,190.96  -  3,486,190.96  -  1,208,104.71  U.S. United Ocean Services, LLC  1715  -  -  -  -  -  -  -  -  -  -  -  -  -  Frascati Shops, Inc.  9623  48,276.23  31,689.73  -  31,689.73  -  31,689.73  -  -  -  -  -  -  79,965.96  Frascati Shops, Inc.  8552  45,127.19  398,699.15  -  398,699.15  -  398,699.15  420,000.00  4,571.04  424,571.04  -  424,571.04  -  19,255.30  Waterman Steamship Corporation  9031  5,103.16  -  -  -  -  -  -  -  -  -  -  -  5,103.16  Waterman Steamship Corporation  9058  5,642.90  -  120,000.00  120,000.00  -  120,000.00  80,000.00  40,769.48  120,769.48  3,392.33  124,161.81  -  1,481.09  Waterman Steamship Corporation  9066  12,679.74  -  150,000.00  150,000.00  (500.00)  149,500.00  -  149,244.82  149,244.82  1,934.37  151,179.19  -  11,000.55  Waterman Steamship Corporation  3208  -  -  -  -  -  -  -  -  -  -  -  -  -  Waterman Steamship Corporation  2043  7,191.85  1,163,592.66  190,000.00  1,353,592.66  -  1,353,592.66  1,160,000.00  190,000.00  1,350,000.00  -  1,350,000.00  -  10,784.51  Waterman Steamship Corporation  1129  397,326.79  722,024.31  -  722,024.31  -  722,024.31  1,105,000.00  -  1,105,000.00  -  1,105,000.00  -  14,351.10  Waterman Steamship Corporation  8703  85,000.00  -  -  -  -  -  -  -  -  -  -  -  85,000.00  Waterman Steamship Corporation  2043-004  -  -  -  -  -  -  -  -  -  -  -  -  -  Sulphur Carriers, Inc.  1276  5,023.68  -  240,000.00  240,000.00  -  240,000.00  -  240,000.00  240,000.00  -  240,000.00  -  5,023.68  Sulphur Carriers, Inc.  1110  7,223.20  -  480,000.00  480,000.00  -  480,000.00  -  483,941.86  483,941.86  2,087.75  486,029.61  -  1,193.59  Sulphur Carriers, Inc.  1102  19,736.06  1,306,711.51  280,000.00  1,586,711.51  -  1,586,711.51  1,305,000.00  284,150.28  1,589,150.28  1,577.08  1,590,727.36  -  15,720.21  LMS Shipmanagement, Inc.  1292  10,106.76  -  55,000.00  55,000.00  -  55,000.00  -  59,295.53  59,295.53  -  59,295.53  -  5,811.23  LMS Shipmanagement, Inc.  7395  14,283.97  -  -  -  (5,000.00)  (5,000.00)  -  5,751.28  5,751.28  -  5,751.28  -  3,532.69  LMS Shipmanagement, Inc.  1099  21,128.38  10,568.96  -  10,568.96  -  10,568.96  -  714.18  714.18  -  714.18  -  30,983.16  Central Gulf Lines, Inc.  0586  1,000.00  -  -  -  -  -  -  -  -  -  -  -  1,000.00  Central Gulf Lines, Inc.  0997  177,243.97  697,618.47  1,263,554.00  1,961,172.47  -  1,961,172.47  1,801,054.00  154,000.00  1,955,054.00  -  1,955,054.00  -  183,362.44  Central Gulf Lines, Inc.  6645  (12,211.93)  6,399.54  15,000.00  21,399.54  -  21,399.54  -  33,066.03  33,066.03  (31,591.03)  1,475.00  -  7,712.61  Central Gulf Lines, Inc.  1005  39,907.54  3,319.36  283,000.00  286,319.36  (24,748.44)  261,570.92  -  259,138.92  259,138.92  35,284.35  294,423.27  -  7,055.19  Central Gulf Lines, Inc.  1021  (275.00)  -  265,000.00  265,000.00  (1,000.00)  264,000.00  -  250,020.00  250,020.00  1,500.00  251,520.00  -  12,205.00  Central Gulf Lines, Inc.  0998  982,957.02  3,391,248.24  -  3,391,248.24  -  3,391,248.24  4,350,000.00  6,226.79  4,356,226.79  (112.00)  4,356,114.79  -  18,090.47  Central Gulf Lines, Inc.  1013  4,801.10  -  500,000.00  500,000.00  -  500,000.00  -  494,612.02  494,612.02  (7.35)  494,604.67  -  10,196.43  Central Gulf Lines, Inc.  8844  13,743.91  838,616.51  -  838,616.51  -  838,616.51  560,000.00  -  560,000.00  -  560,000.00  -  292,360.42  Central Gulf Lines, Inc.  3652  252,079.41  568,554.10  -  568,554.10  -  568,554.10  245,000.00  420.00  245,420.00  -  245,420.00  -  575,213.51  Central Gulf Lines, Inc.  3660  962,500.00  962,500.00  -  962,500.00  (962,500.00)  -  792,500.00  420.00  792,920.00  -  792,920.00  -  169,580.00  Central Gulf Lines, Inc.  0997-004  -  -  -  -  -  -  -  -  -  -  -  -  -  Enterprise Ship Company, Inc.  1064  20,674.67  -  -  -  (30.00)  (30.00)  -  -  -  -  -  -  20,644.67  LCI Shipholdings, Inc.  2027  13,656.52  95,172.40  -  95,172.40  -  95,172.40  90,000.00  -  90,000.00  -  90,000.00  -  18,828.92  LCI Shipholdings, Inc.  1080  7,414.36  496,544.47  -  496,544.47  -  496,544.47  500,000.00  -  500,000.00  -  500,000.00  -  3,958.83  LCI Shipholdings, Inc.  6001  4,230.85  -  -  -  -  -  -  110.00  110.00  -  110.00  -  4,120.85  LCI Shipholdings, Inc.  9099  7,521.35  -  -  -  -  -  -  -  -  -  -  -  7,521.35  LCI Shipholdings, Inc.  2027-004  -  -  -  -  -  -  -  -  -  -  -  -  -  LCI Shipholdings, Inc.  0947  42,864.03  5.27  -  5.27  -  5.27  -  -  -  -  -  -  42,869.30  Dry Bulk Australia Ltd.  1731  13,060.35  -  -  -  -  -  -  -  -  -  -  -  13,060.35  Dry Bulk Americas Ltd.  1027  12,141.61  -  -  -  -  -  -  -  -  -  -  -  12,141.61  Marco Shipping Company (PTE) Ltd  5001  41,927.98  1,865,364.44  -  1,865,364.44  -  1,865,364.44  1,890,000.00  100.00  1,890,100.00  -  1,890,100.00  -  17,192.42  Marco Shipping Company (PTE) Ltd  5002  7,451.39  -  -  -  -  -  -  1,185.35  1,185.35  -  1,185.35  (53.46)  6,212.58  Gulf South Shipping PTE Ltd  4001  10,510.64  -  -  -  -  -  -  -  -  -  -  -  10,510.64  Gulf South Shipping PTE Ltd  4002  5,856.86  -  -  -  -  -  -  -  -  -  -  (1.29)  5,855.57  Gulf South Shipping PTE Ltd  3659  153,738.23  2,506,600.46  -  2,506,600.46  -  2,506,600.46  2,538,000.00  -  2,538,000.00  -  2,538,000.00  -  122,338.69  Total  10,458,304.65  27,796,148.23  26,640,507.12  54,436,655.35  (993,778.44)  53,442,876.91  26,640,507.12  21,512,660.70  48,153,167.82  (5,000.99)  48,148,166.83  (54.75)  15,752,959.98  MOR-1Page 1 

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 16-12220-smb Doc 279  Monthly Operating Report - Southern District of New YorkBank Reconciliation (or Copies of Debtor's Bank Reconciliations)Reporting Period: September-16  Entity Name: International Shipholding Corporation (Consolidating)Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  CasePg 3 of 15  Debtor Name  Bank Account #  Bank Balance  Deposits in Transit  Checks Outstanding 1  Book Balance  Notes/ Comments  (Last 4 Digits) 2  International Shipholding Corporation  2907  $  3,135.34  $  -  $  -  $  3,135.34  International Shipholding Corporation  1639  10,007.40  -  -  10,007.40  International Shipholding Corporation  1314  5,183.39  -  -  5,183.39  International Shipholding Corporation  4643  12,068,876.11  -  (532,425.02)  11,536,451.09  International Shipholding Corporation  6001  1,352.50  -  -  1,352.50  International Shipholding Corporation  8174  20,594.89  -  -  20,594.89  International Shipholding Corporation  9131  24,406.31  -  -  24,406.31  International Shipholding Corporation  3120  1,052,432.37  -  -  1,052,432.37  Restricted Cash  N.W. Johnson & Co. Inc  8364  20,678.27  -  -  20,678.27  Coastal Carriers, Inc.  4547  11,529.34  -  -  11,529.34  U.S. United Ocean Services, LLC  1715  7,848.77  -  -  7,848.77  U.S. United Ocean Services, LLC  3712  -  -  (3.58)  (3.58)  U.S. United Ocean Services, LLC  1468  -  -  -  -  U.S. United Ocean Services, LLC  2260  1,208,104.71  -  -  1,208,104.71  U.S. United Ocean Services, LLC3  1715  -  -  -  -  Frascati Shops, Inc.  9623  79,965.96  -  -  79,965.96  Frascati Shops, Inc.  8552  19,255.30  -  -  19,255.30  Waterman Steamship Corporation  9031  5,215.16  -  (112.00)  5,103.16  Waterman Steamship Corporation  9058  14,967.09  -  (13,486.00)  1,481.09  Waterman Steamship Corporation  9066  15,434.92  -  (4,434.37)  11,000.55  Waterman Steamship Corporation  3208  -  -  -  -  Waterman Steamship Corporation  2043  10,784.51  -  -  10,784.51  Waterman Steamship Corporation  1129  14,351.10  -  -  14,351.10  Waterman Steamship Corporation  8703  85,000.00  -  -  85,000.00  Waterman Steamship Corporation 3  2043-004  -  -  -  -  Sulphur Carriers, Inc.  1276  5,023.68  -  -  5,023.68  Sulphur Carriers, Inc.  1110  11,281.65  -  (10,088.06)  1,193.59  Sulphur Carriers, Inc.  1102  17,297.29  -  (1,577.08)  15,720.21  LMS Shipmanagement, Inc.  1292  5,811.23  -  -  5,811.23  LMS Shipmanagement, Inc.  7395  3,532.69  -  -  3,532.69  LMS Shipmanagement, Inc.  1099  30,983.16  -  -  30,983.16  Central Gulf Lines, Inc.  0586  1,000.00  -  -  1,000.00  Central Gulf Lines, Inc.  0997  183,362.44  -  -  183,362.44  Central Gulf Lines, Inc.  6645  9,187.61  -  (1,475.00)  7,712.61  Central Gulf Lines, Inc.  1005  59,984.67  -  (52,929.48)  7,055.19  Central Gulf Lines, Inc.  1021  17,505.00  -  (5,300.00)  12,205.00  Central Gulf Lines, Inc.  0998  18,090.47  -  -  18,090.47  Central Gulf Lines, Inc.  1013  10,196.43  -  -  10,196.43  Central Gulf Lines, Inc.  8844  292,360.42  -  -  292,360.42  Central Gulf Lines, Inc.  3652  575,213.51  -  -  575,213.51  MOR-1 (Cont.) Page 1 

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 16-12220-smb Doc 279  Monthly Operating Report - Southern District of New YorkBank Reconciliation (or Copies of Debtor's Bank Reconciliations)Reporting Period: September-16  Entity Name: International Shipholding Corporation (Consolidating)Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  CasePg 4 of 15  Debtor Name  Bank Account #  Bank Balance  Deposits in Transit  Checks Outstanding 1  Book Balance  Notes/ Comments  (Last 4 Digits) 2  Central Gulf Lines, Inc.  3660  169,580.00  -  -  169,580.00  Restricted Cash  Central Gulf Lines, Inc. 4  0997-004  -  -  -  -  Enterprise Ship Company, Inc.  1064  20,644.67  -  -  20,644.67  LCI Shipholdings, Inc.  2027  18,828.92  -  -  18,828.92  LCI Shipholdings, Inc.  1080  3,958.83  -  -  3,958.83  LCI Shipholdings, Inc.  6001  4,120.85  -  -  4,120.85  LCI Shipholdings, Inc.  9099  7,521.35  -  -  7,521.35  LCI Shipholdings, Inc.3  2027-004  -  -  -  -  LCI Shipholdings, Inc.  0947  42,869.30  -  -  42,869.30  Dry Bulk Australia Ltd.  1731  13,060.35  -  -  13,060.35  Dry Bulk Americas Ltd.  1027  12,141.61  -  -  12,141.61  Marco Shipping Company (PTE) Ltd  5001  17,192.42  -  -  17,192.42  Marco Shipping Company (PTE) Ltd  5002  6,212.58  -  -  6,212.58  Gulf South Shipping PTE Ltd  4001  10,510.64  -  -  10,510.64  Gulf South Shipping PTE Ltd  4002  5,855.57  -  -  5,855.57  Gulf South Shipping PTE Ltd  3659  122,338.69  -  -  122,338.69  Total  $  16,374,789.47  $  (621,830.59)  $  15,752,958.88  1 Outstanding check listing can be provided at request.  2 The Debtors have not included copies of the bank statements due to the voluminous nature of such documents. Copies will be provided upon request.  3 The Debtors did not receive statements from the bank in these overnight sweep accounts because the balance remains zero in September.  4 The sweep account exhibited one day of activity across 9/13 and 9/14 that resulted in a net balance of zero. With no change to the balance, the bank did not provide a statement.  MOR-1 (Cont.)  Page 2 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  Entity Name: International Shipholding Corporation (Consolidating)  Case Number: 16-12220Pg 5 of 15  Monthly Operating Report - Southern District of New YorkStatement of Operations (Income Statement)Reporting Period: September-16  Cumulative - Filing To  Statement Line Item  Month Amount  Date  REVENUE  Gross Revenues  $  14,366,244.76  $  30,180,526.99  OPERATING EXPENSES  Voyage Expenses  10,751,278.76  22,566,533.42  Amortization Expense  771,961.00  1,429,422.00  Depreciation Expense  1,287,554.69  2,609,020.00  Administrative and General Expenses  1,145,229.11  2,286,382.15  Net Profit (Loss) Before Other Income & Expenses  410,221.20  1,289,169.42  OTHER INCOME AND EXPENSES  Interest Expense  970,626.47  2,535,462.87  Interest Income  (59.80)  (1,071.01)  Income from Consolidated Subsidiaries  (278,494.90)  (1,037,530.44)  Net Profit (Loss) Before Reorganization Items  (281,850.57)  (207,692.00)  REORGANIZATION ITEMS  Professional Fees  1,742,825.77  3,331,937.41  U. S. Trustee Quarterly Fees  -  Interest Earned on Accumulated Cash from Chapter 11 (See MOR-2 Other  -  Schedule tab)  Gain (Loss) from Sale of Equipment  -  Other Reorganization Expenses (See MOR-2 Other Schedule tab)  -  Income Taxes  12,250.00  12,250.00  Net Profit (Loss)  $  (2,036,926.34)  $  (3,551,879.41)  MOR-2Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating) Case Number: 16-12220Pg 6 of 15  Monthly Operating Report - Southern District of New YorkBalance Sheet  Reporting Period: September-16  Category  Book Value At End Of Current Reporting Book Value At End Of Prior Book Value On Petition Date Or  Month  Reporting Month  Scheduled  Current Assets  Cash on Hand  $  365,503.51  $  398,043.64  $  332,340.90  Unrestricted Cash and Equivalents  14,530,946.43  8,443,372.72  4,067,480.98  Restricted Cash and Cash Equivalents (See  MOR-3 Other Sch)  1,222,012.37  2,014,932.37  1,997,025.04  Trade Accounts Receivable (Net)  6,772,406.00  8,617,456.00  8,620,036.00  Unbilled Accounts Receivable  7,837,477.00  8,546,292.00  10,099,426.00  Notes Receivable  -  -  Inventories  6,421,125.00  5,947,866.30  6,119,445.33  Prepaid Expenses  4,521,591.00  2,712,548.02  2,892,687.98  Professional Retainers  235,078.00  235,078.00  235,078.00  Other Current Assets (See MOR-3 Other  Sch)  -  -  -  Property & Equipment  Real Property and Improvements  $  2,419,781.00  $  2,419,778.97  $  2,707,867.22  Machinery and Equipment  215,945,931.57  216,504,639.60  217,456,370.74  Furniture, Fixtures and Office Equipment  4,687,285.39  4,687,285.29  4,103,934.83  Accumulated Depreciation  (36,109,775.44)  (34,822,220.75)  (33,500,755.44)  Other Assets (See MOR-3 Other Sch)  35,725,022.47  35,951,583.44  35,124,339.05  Total Assets  $  264,574,384.30  $  261,656,655.60  $  260,255,276.63  Liabilities Not Subject To Compromise  (Post-Petition)  Accounts Payable  $  1,316,385.00  $  1,759,233.00  $  -  Taxes Payable  240,761.00  114,361.00  -  Accrued Expenses - Crew Wages  2,734,766.00  2,938,628.00  -  Accrued Expenses - Professional Fees  1,800,000.00  900,000.00  -  Accrued Expenses  5,581,567.41  4,616,435.00  -  Billings in Excess of Cost  2,389,330.00  1,157,712.00  -  Debtor in Possession Financing  16,000,000.00  9,000,000.00  -  Other Post-Petition Liabilities (See MOR-  3 Other Sch)  -  -  -  Total Post-Petition Liabilities  $  30,062,809.41  $  20,486,369.00  $  -  Liabilities Subject To Compromise (Pre-  Petition)  Secured Debt  $  107,514,072.74  $  107,919,424.74  $  110,189,774.35  Priority Debt  1,137,919.00  1,171,374.93  2,980,642.00  Unsecured Debt  50,822,105.00  54,581,143.00  66,052,920.00  Other Pre-Petition Liabilities (See MOR-3  Other Sch)  10,451,657.13  10,887,592.00  12,978,934.00  Total Pre-Petition Liabilities  $  169,925,753.87  $  174,559,534.67  $  192,202,270.35  Owners' Equity  Capital Stock  $  9,421,221.49  $  9,417,487.85  $  9,413,754.21  Additional Paid-In Capital  141,820,743.03  141,807,691.33  141,794,639.63  Partners' Capital Account  -  -  -  Owner's Equity Account  (37,124,165.09)  (37,119,374.74)  (37,175,288.44)  Retained Earnings - Pre-Petition  (45,980,099.41)  (45,980,098.60)  (45,980,098.60)  Retained Earnings - Post-Petition  (3,551,879.00)  (1,514,953.07)  -  Total Equity  $  64,585,821.02  $  66,610,752.77  $  68,053,006.80  Total Liabilities and Owners Equity  $  264,574,384.30  $  261,656,656.44  $  260,255,277.15  MOR-3Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating)  CaPg 7 of 1  5  Monthly Operating Report - Southern District of New YorkBalance Sheet - Other Schedule  Reporting Period: September-16  Category  Book Value At End Of Current  Book Value At End Of Prior  Book Value On Petition Date  Notes/ Comments  Reporting Month  Reporting Month  Assets  Other Assets  $  2,447,731.00  $  2,487,576.18  $  2,528,749.45  LT deposits  Other Assets  (2,857,247.40)  (2,459,516.42)  (2,575,674.66) Due (to) from affiliates, net  Other Assets  36,032,990.36  35,815,008.86  35,056,196.42  Investment in subsidiaries  Other Assets  101,548.43  108,514.36  115,068.23  LT deferred charge related to TECO contract  Total Other Assets  $  35,725,022.39  $  35,951,582.98  $  35,124,339.44  Liabilities  Liabilities Not Subject To Compromise (Pre-  Petition)  $  1,910,811.00  $  2,239,956.00  $  4,071,824.00  Claims reserve  Liabilities Not Subject To Compromise (Pre-  Petition)  15,079.00  14,843.00  14,607.00  GAAP SL versus cash on escalating lease payments  Liabilities Not Subject To Compromise (Pre-  Petition)  7,904,048.13  8,163,757.00  8,423,467.00  Deferred gain - Sulphur and CGL/Green Lake  Liabilities Not Subject To Compromise (Pre-  Petition)  (64,103.00)  (64,103.00)  (64,103.00) Deferred tax  Liabilities Not Subject To Compromise (Pre-  Petition)  685,822.00  533,139.00  533,139.00  PT Amas dry dock funding for Flores and Sawu  Total Liabilities Not Subject To  Compromise (Pre-Petition)  $  10,451,657.13  $  10,887,592.00  $  12,978,934.00  MOR-3b Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating)  CasPg 8 of 15  Monthly Operating Report - Southern District of New YorkStatus of Post-Petition Taxes  Reporting Period: September-16  Debtor  Federal/ State &  Description  Beginning Tax  Amount Withheld  Amount Paid  Date Paid  Check # or  Ending Tax  Notes/ Comments  Local  and/or Accrued  EFT  International Shipholding Corporation  Federal  Withholding  $  (47,454.76)  $  (618,996.52)  $  577,033.40  See Note  See Note  $  (89,417.88)  941 Tax - Due and paid in October 2016  International Shipholding Corporation  Federal  FICA-Employee  (23,100.14)  (306,656.35)  307,627.50  See Note  See Note  (22,128.99)  941 Tax - Due and paid in October 2016  International Shipholding Corporation  Federal  FICA-Employer  (22,878.92)  (306,095.35)  307,125.78  See Note  See Note  (21,848.49)  941 Tax - Due and paid in October 2016  International Shipholding Corporation  Federal  Unemployment  (21.00)  (69.82)  -  See Note  See Note  (90.82)  Due October 31, 2016  International Shipholding Corporation  Federal  Income  -  (6,000.00)  6,000.00  -  Federal Q3 Estimated Tax - Tonnage Tax  International Shipholding Corporation  Federal  Other (Specify)  -  (148.15)  148.15  See Note  See Note  -  Form 1042 Withholding Tax - C.G. Railway, Inc.  International Shipholding Corporation  State and Local  Withholding  (17,302.98)  (22,094.68)  21,466.59  See Note  See Note  (17,931.07)  Due September 15, 2016 - Paid  International Shipholding Corporation  State and Local  Sales  (119.46)  (331.09)  119.46  (331.09)  Due September 20, 2016  International Shipholding Corporation  State and Local  Excise  -  -  -  -  International Shipholding Corporation  State and Local  Unemployment  (111.00)  (202.93)  -  (313.93)  Due October 31, 2016  International Shipholding Corporation  State and Local  Real Property  -  -  -  -  International Shipholding Corporation  State and Local  Personal Property  -  -  -  -  $3,372.92 NYC Commercial Rent Tax  International Shipholding Corporation  State and Local  Other (Specify)  (3,372.92)  (99,979.00)  14,652.92  See Note  See Note  (88,699.00)  Ending balance is SCI Florida Income Tax - awaiting invoice from State of FL.  Other includes: City of New Orleans S&U, Louisiana S&U, Alabama (City,  County, State) S&U, New York City Estimated Franchise Tax, New York StateFranchise Tax, California Minimum Tax, Alabama Income Tax, Florida Income  International Shipholding Corporation  Total  $  (114,361.18)  $  (1,360,573.89)  $  1,234,173.80  (240,761.27)  Tax  Note: The Debtors have not included copies of the tax payment receipts due to the voluminous nature of such documents. Copies will be provided upon request.  MOR-4  Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating)  CasPg 9 of 15  Monthly Operating Report - Southern District of New YorkSummary of Unpaid Post-Petition Debts  Reporting Period: September-16  Debtor Name  Description  Current  Days Past Due:  Days Past Due:  Days Past Due:  Days Past Due:  Total  Notes/ Comments  0-30  31-60  61-90  Over 91  Past due Accounts Payable includes $79,185.43 was paid in October. The  remaining $63,887.81 is payable to a specific vendor which is unpaid as a  International Shipholding Corporation  Accounts Payable  $  1,173,311.00  $  143,073.24  $  -  $  -  $  -  $  1,316,384.24  result of a dispute over the invoice amount.  International Shipholding Corporation  Taxes Payable  52,958.79  -  -  -  -  52,958.79  N.W. Johnsen & Company, Inc.  Taxes Payable  10,970.59  -  -  -  -  10,970.59  LMS Shipmanagement, Inc.  Taxes Payable  33,059.06  -  -  -  -  33,059.06  Frascati Shops, Inc.  Taxes Payable  7,590.37  -  -  -  -  7,590.37  U.S. United Ocean Services, LLC  Taxes Payable  5,001.91  -  -  -  -  5,001.91  Central Gulf Lines, Inc.  Taxes Payable  42,481.55  -  -  -  -  42,481.55  Sulphur Carriers, Inc.  Taxes Payable  88,699.00  -  -  -  -  88,699.00  Total  $  1,414,072.27  $  143,073.24  $  -  $  -  $  -  $  1,557,145.51  MOR-4bPage 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating)  CaPg 10 of 1  5  Monthly Operating Report - Southern District of New YorkAccounts Receivable Reconciliation and AgingReporting Period: September-16  Debtor Name  AR at the beginning of Amount Billed during  Amounts Collected  AR at the end of the  Bad Debts  # Days Past Due:  # Days Past Due:  # Days Past Due:  # Days Past Due:  Total  the period  Period  during Period  reporting period  0-30  31-60  61-90  Over 91  International Shipholding Corporation  $  2,717.87  $  100,862.25  $  104,782.65  $  (1,202.53)  $  -  $  (419.04)  $  47.14  $  (136.72)  $  (693.91)  $  (1,202.53)  Sulphur Carriers, Inc.  175,165.68  1,242,152.29  1,374,974.03  42,343.94  -  42,343.94  -  -  -  42,343.94  Central Gulf Lines, Inc.  4,392,764.83  2,842,385.28  3,890,226.95  3,344,923.16  (43,417.00)  3,201,695.76  43,753.29  24,667.90  118,223.21  3,344,923.16  Waterman Steamship Corporation  1,865,523.00  1,666,808.23  2,094,071.10  1,438,260.13  (24,059.60)  1,438,260.13  -  -  24,059.60  1,438,260.13  N.W. Johnsen & Co. Inc.  19,921.00  96,624.44  82,349.75  34,195.69  -  14,274.27  -  -  19,921.42  34,195.69  LMS Shipmanagement, Inc.  -  -  -  -  -  -  -  -  -  -  U.S. United Ocean Services, LLC  1,477,717.00  4,123,779.84  4,203,551.44  1,397,945.40  -  1,387,103.40  -  -  10,842.00  1,397,945.40  Frascati Shops, Inc.  563,477.00  287,098.02  429,759.91  420,815.11  (13,281.54)  283,824.27  10,532.14  12,767.75  126,972.49  420,815.11  Gulf South Shipping PTE LTD  -  1,386,822.61  1,386,822.61  -  -  -  -  -  -  -  LCI Shipholding, Inc.  120,170.00  94,061.96  119,106.88  95,125.08  -  94,062.54  1,062.54  -  -  95,125.08  Dry Bulk Australia LTD  -  -  -  -  -  -  -  -  -  -  Dry Bulk Americas LTD  -  -  -  -  -  -  -  -  -  -  Marco Shipping Company (PTE) LTD  -  1,865,331.86  1,865,331.86  -  -  -  -  -  -  -  Total  8,617,456.38  13,705,926.78  15,550,977.18  6,772,405.98  (80,758.14)  6,461,145.27  55,395.11  37,298.93  299,324.81  6,772,405.98  MOR-5aPage 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  Entity Name: International Shipholding Corporation (Consolidating)  Case Number: 16-12220Pg 11 of 15  Monthly Operating Report - Southern District of New YorkTaxes Reconciliation and Aging  Reporting Period: September-16  Debtor Name  # Days Past Due:  # Days Past Due:  # Days Past Due:  # Days Past Due:  Total  0-30  31-60  61-90  Over 91  International Shipholding Corporation  $  52,958.79  $  -  $  -  $  -  $  52,958.79  N.W. Johnsen & Company, Inc.  10,970.59  -  -  -  10,970.59  LMS Shipmanagement, Inc.  33,059.06  -  -  -  33,059.06  Frascati Shops, Inc.  7,590.37  -  -  -  7,590.37  U.S. United Ocean Services, LLC  5,001.91  -  -  -  5,001.91  Central Gulf Lines, Inc.  42,481.55  -  -  -  42,481.55  Sulphur Carriers, Inc.  88,699.00  -  -  -  88,699.00  Total  240,761.27  -  -  -  240,761.27  MOR-5b Page 1 

MOR-5b

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  Entity Name: International Shipholding Corporation (Consolidating)  Pg 12 of 15  Case Number: 16-12220  Monthly Operating Report - Southern District of New YorkPayments to Insiders  Reporting Period: September-16  Debtor  Name  Type of Payment  Amount Paid  Total Paid to Date  LMS Shipmanagement, Inc.  Caire, Peter J.  Salary  8,934.02  17,868.04  LMS Shipmanagement, Inc.  Caire, Peter J.  Travel Expenses  402.01  402.01  LMS Shipmanagement, Inc.  Cameron, William M.  Salary  14,010.14  28,020.28  LMS Shipmanagement, Inc.  Cameron, William M.  Travel Expenses  398.71  588.63  N.W. Johnsen & Co. Inc.  Chambers, Robert T.  Salary  13,875.82  27,751.64  N.W. Johnsen & Co. Inc.  De Benedetto, Daniel T.  Salary  6,470.98  12,941.96  N.W. Johnsen & Co. Inc.  De Benedetto, Daniel T.  Travel Expenses  -  428.22  International Shipholding Corporation  Estrada, Manuel G.  Salary  23,825.42  47,650.84  International Shipholding Corporation  Estrada, Manuel G.  Travel Expenses  415.03  1,647.16  LMS Shipmanagement, Inc.  Grehan, Brooke Y.  Salary  10,711.44  21,422.88  LMS Shipmanagement, Inc.  Grehan, Brooke Y.  Travel Expenses  1,334.84  1,334.84  N.W. Johnsen & Co. Inc.  Hawkins, Nigel J.  Salary  17,303.76  34,607.52  N.W. Johnsen & Co. Inc.  Hawkins, Nigel J.  Travel Expenses  -  148.00  International Shipholding Corporation  Higginbotham, James T.  Salary  11,258.50  22,517.00  International Shipholding Corporation  Higginbotham, James T.  Travel Expenses  -  1,143.48  International Shipholding Corporation  Johnsen, Erik L.  Salary  39,250.92  78,501.84  International Shipholding Corporation  Johnsen, Erik L.  Travel Expenses  6,517.14  6,517.14  International Shipholding Corporation  Johnsen, Neils M.  Contractor  30,000.00  30,000.00  International Shipholding Corporation  Johnsen, Neils M.  Travel Expenses  1,440.00  1,440.00  U.S. United Ocean Services, LLC  Johnston, Peter M.  Salary  18,056.48  36,112.96  International Shipholding Corporation  Nahas, George A.  Salary  11,068.04  22,136.08  International Shipholding Corporation  Nahas, George A.  Travel Expenses  264.94  264.94  International Shipholding Corporation  Rosenbohm, Sheila D.  Salary  11,546.62  23,093.24  International Shipholding Corporation  Rosenbohm, Sheila D.  Travel Expenses  1,488.69  2,670.81  International Shipholding Corporation  Wild, Kevin M.  Salary  12,398.20  24,796.40  International Shipholding Corporation  Wild, Kevin M.  Travel Expenses  2,992.61  3,459.17  International Shipholding Corporation  Wilson, Kevin M.  Salary  12,375.48  24,332.14  International Shipholding Corporation  Wilson, Kevin M.  Travel Expenses  -  227.52  MOR-6Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating) Case Number: 16-12220Pg 13 of 15  Monthly Operating Report - Southern District of New YorkPayments to Professionals  Reporting Period: September-16  Debtor  Name  Date of Court Order Authorizing  Amount Approved  Amount Paid  Total Paid to Date  Total Incurred and Unpaid  Payment  International Shipholding Corporation  McGlinchey Stafford PLLC  9/21/2016  $  -  $  78,257.50  $  78,257.50  $  -  International Shipholding Corporation  Prime Clerk  8/4/2016  -  211,913.24  211,913.24  -  International Shipholding Corporation  Alix Partners LLP  9/21/2016  -  50,503.26  50,503.26  -  International Shipholding Corporation  Seward & Kissel LLP  9/21/2016  -  95,668.92  457,209.92  -  International Shipholding Corporation  Watson Farley & Williams LLP  9/21/2016  -  50,375.36  86,956.36  -  International Shipholding Corporation  Milbank  9/21/2016  -  242,759.41  596,798.41  -  International Shipholding Corporation  Moore & Van Allen PLLC  9/21/2016  -  171,744.13  171,744.13  -  International Shipholding Corporation  Total  -  901,221.82  1,653,382.82  MOR-6b Page 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main DocumentEntity Name: International Shipholding Corporation (Consolidating) Case Number: 16-12220Pg 14 of 15  Monthly Operating Report - Southern District of New YorkPost-Petition Status of Secured Notes, Leases PayableReporting Period: September-16  Debtor Name  Name of Creditor  Scheduled Monthly Payment Amount Paid during Period  Total Unpaid Post-Petition  Notes/ Comments  International Shipholding Corp.  Regions Bank  $  190,694.81  $  190,694.81  $  -  Interest  International Shipholding Corp.  Regions Bank  393,692.47  393,692.47  -  Interest  International Shipholding Corp.  Debtor in Possession Financing  -  66,229.51  -  Interest - paid on 9/1/2016 for August  International Shipholding Corp.  Debtor in Possession Financing  97,704.92  97,704.92  -  Interest  LCI Shipholding Inc.  Citizens Asset Finance  64,132.37  64,132.37  -  Interest  LCI Shipholding Inc.  Capital One  14,424.91  14,424.91  -  Interest  LCI Shipholding Inc.  Capital One  -  14,068.76  -  Interest - due 10/1  Central Gulf Lines  DVB Bank  148,301.00  -  148,301.00  Interest paid quarterly  International Shipholding Corp.  Regions Bank  25,000.00  25,000.00  -  Adequate Protection Pymt  LCI Shipholding Inc.  Capital One  25,000.00  25,000.00  -  Adequate Protection Pymt  LCI Shipholding Inc.  Citizens Asset Finance  50,000.00  50,000.00  -  Adequate Protection Pymt  Total  $  1,008,950.48  $  940,947.75  $  148,301.00  MOR-6cPage 1 

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 16-12220-smb Doc 279 Filed 10/20/16 Entered 10/20/16 19:45:42 Main Document  Entity Name: International Shipholding Corporation (Consolidating)  Pg 15 of 15  Case Number: 16-12220  Monthly Operating Report - Southern District of New YorkDebtor Questionnaire  Reporting Period: September-16  Question #  Must be completed each month. If the answer to any of the questions is “Yes”,  Yes  No  provide a detailed explanation of each item. Attach additional sheets if necessary.  Have any assets been sold or transferred outside the normal course of business this  1  reporting period?  X  Have any funds been disbursed from any account other than a debtor in possession  2  account this reporting period?  X  3  Is the Debtor delinquent in the timely filing of any post-petition tax returns?  X  Are workers compensation, general liability or other necessary insurance coverages  expired or cancelled, or has the debtor received notice of expiration or cancellation of  4  such policies?  X  5  Is the Debtor delinquent in paying any insurance premium payment?  X  6  Have any payments been made on pre-petition liabilities this reporting period?  X  7  Are any post petition receivables (accounts, notes or loans) due from related parties?  X  8  Are any post petition payroll taxes past due?  X  9  Are any post petition State or Federal income taxes past due?  X  10  Are any post petition real estate taxes past due?  X  11  Are any other post petition taxes past due?  X  12  Have any pre-petition taxes been paid during this reporting period?  X  13  Are any amounts owed to post petition creditors delinquent?  X  14  Are any wage payments past due?  X  15  Have any post petition loans been received by the Debtor from any party?  X  16  Is the Debtor delinquent in paying any U.S. Trustee fees?  X  Is the Debtor delinquent with any court ordered payments to attorneys or other  17  professionals?  X  Have the owners or shareholders received any compensation outside of the normal  18  course of business?  X  2. The Company has a subsidiary that was not a part of the filing that continues to operate and payments are being made in theordinary course of business.  6. The Company has made pre-petition payments to critical vendors, lienholders, employees, and insurance providers as permitted inthe approved interim motions.  15. The Company has received $7,000,000 in Debtor in Possession financing during September 2016.  MOR-7  Page 1 

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