X0202 3 2004-10-27 0 0001299716 U.S. Shipping Partners L.P. USS 0001036310 KEARNS WILLIAM M JR 40 WANTAGE AVENUE BRANCHVILLE NJ 07890 1 0 0 0 Limited partner interest 0 I See footnotes General partner interest 0 I See footnotes Incentive distribution rights 0 I See footnotes As of October 27, 2004, United States Shipping Master LLC ("Shipping Master") owns a 98% limited partner interest in the Issuer. At the closing of the Issuer's proposed initial public offering of common units ("Common Units") representing limited partner interests (the "Offering"), Shipping Master's 98% limited partner interest will be redeemed for $1,960. As of October 27, 2004, Shipping Master owns 100% of US Shipping General Partner LLC ("Shipping GP"), the sole general partner of the Issuer. Shipping GP owns a 2% general partner interest in the Issuer. At the closing of the Offering, each of Shipping Master and Shipping GP will agree to convey certain assets and liabilities to the Issuer and in exchange therefor (a) Shipping Master expects to receive 899,968 Common Units, 5,272,341 class A subordinated units and 1,627,627 class B subordinated units of the Issuer and (B) Shipping GP will continue its 2% general partner interest and receive incentive distribution rights ("IDRs"), which represent the right to receive an increasing percentage of quarterly distributions in excess of specified amounts. At the closing of the Offering, Shipping Master will be the indirect beneficial owner of the general partner interest in the Issuer and the IDRs owned by Shipping GP. Pursuant to the Shipping Master limited liability company agreement, Mr. Kearns will own (a) a 0.53% pecuniary interest in the common units directly owned Shipping Master and the general partner interest and IDRs indirectly owned by Shipping Master, and (b) a 0.70% pecuniary interest in the class A subordinated units directly owned by Shipping Master. /s/ William M. Kearns, Jr. 2004-10-27