EXHIBIT 10.2

 

New York Life Insurance Company and the other Noteholders signatory hereto
c/o NYL Investors LLC
51 Madison Avenue
New York, New York 10010-1603

 

As of June 29, 2017

 

MATSON, INC.
1411 Sand Island Parkway
Honolulu, Hawaii 96819

 

Re:                             Amendment to 2013 Note Purchase Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Note Purchase Agreement, dated as of
November 5, 2013 (as amended or otherwise modified from time to time, the
“Agreement”), by and among Matson, Inc., a Hawaii corporation (the “Company”),
on the one hand, and the Purchasers named therein, on the other hand. 
Capitalized terms used and not otherwise defined in this letter agreement shall
have the meanings provided in the Agreement (after giving effect to the
amendments provided in this letter agreement).

 

1.                                      Pursuant to the provisions of paragraph
11C of the Agreement, and subject to the terms and conditions of this letter
agreement, the undersigned holders of Notes (the “Noteholders”) and the Company
agree that the Agreement is hereby amended, as follows:

 

1.1                               A new paragraph 5L is inserted, as follows:

 

“5L.                       Rating Confirmation.  The Company covenants that it
will obtain, by not later than the earlier of June 30, 2018 and the beginning of
the Special Relief Period, and thereafter use its reasonable best efforts to
cause to be maintained at all times until December 31, 2021, but only if the
Consolidated Leverage Ratio is 2.50:1.00 or less as of such date, and otherwise
until December 31, 2022, at its sole cost and expense, a Credit Rating from at
least one Rating Agency.  On or before November 30 of each year when a Credit
Rating is required to be maintained the Company further covenants and agrees it
will provide a notice to each of the holders of the Notes sent in the manner
provided in paragraph 11I with respect to any then current Credit Ratings.”

 

1.2                               Paragraph 6A(2) is amended and restated, as
follows:

 

“6A(2).        Consolidated Leverage Ratio.  The ratio (the “Consolidated
Leverage Ratio”) of (a) all Debt of the Company and Subsidiaries on a
consolidated basis at any time to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters then or most recently ended to exceed 3.25 to 1.00;
provided, however, that:

 

(i)  at any time after the expiration of the Special Relief Period (as defined
below), but only if the Consolidated Leverage Ratio at such time has been equal
to or less than 3.25 to 1.00 at all times during at least four consecutive full
fiscal quarters, in connection with any Acquisition that is not a Hostile
Acquisition and that is in an Eligible Business Line for which the aggregate
purchase consideration equals or exceeds $75,000,000, the maximum permitted
Consolidated Leverage Ratio, at the election of the Company, with prior written
notice from the Company to the holders of the Notes, shall increase to 3.90 to
1.00, on one occasion during the term of this Agreement, for the period
beginning on the date of the consummation of such Acquisition and continuing
until the fourth consecutive fiscal quarter end which occurs on or after the
date of the consummation of such Acquisition, provided that the coupon
(including the applicable default

 

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rate) for the Notes shall automatically, without further consent or other action
of any Person, be deemed to be increased by 0.45% per annum during such period
(and shall automatically, without further consent or other action of any Person,
be deemed to return to the original coupon (including the applicable default
rate) after the end of such period);

 

(ii)  at any time after the expiration of the Special Relief Period (as defined
below), but only if the Consolidated Leverage Ratio at such time has been equal
to or less than 3.25 to 1.00 at all times during at least four consecutive full
fiscal quarters, in connection with any purchase or construction of a new
container ship for which the aggregate purchase consideration or construction
cost equals or exceeds $125,000,000, the maximum permitted Consolidated Leverage
Ratio, at the election of the Company, with prior written notice from the
Company to the holders of the Notes delivered by the Company prior to the
Specified Date (as defined below) and specifying therein such Specified Date,
shall increase to 3.50 to 1.00, on one occasion during the term of this
Agreement, for the period beginning on a date determined by the Company between
the commencement of payment for such container ship and delivery of such
container ship (the “Specified Date”) and continuing until the fourth
consecutive fiscal quarter end which occurs on or after the Specified Date,
provided that the coupon (including the applicable default rate) for the Notes
shall automatically, without further consent or other action of any Person, be
deemed to be increased by 0.20% per annum during such period (and shall
automatically, without further consent or other action of any Person, be deemed
to return to the original coupon (including the applicable default rate) after
the end of such period);

 

(iii)  at any time and from time to time (but subject to the next succeeding
clauses (iv), (v), (vi), (vii), (viii) and (ix)) during the Special Relief
Period (as defined below) in connection with any purchase or construction of one
or more new container ships for which the aggregate purchase consideration or
construction cost per ship equals or exceeds $125,000,000 (each, a “Qualifying
Ship”), the maximum permitted Consolidated Leverage Ratio, at the election of
the Company effective as of the last day of a fiscal quarter occurring during
the Special Relief Period (through the Company’s delivery, no later than 20 days
after the last day of the applicable fiscal quarter, of a written notice to the
holders of the Notes, stating that the Company is electing an “Applicable Relief
Period” and specifying the beginning and ending dates thereof (each, an
“Applicable Relief Period Notice”), shall increase to the Applicable Maximum
Level for the period beginning on the last day of the applicable fiscal quarter
and continuing until the day immediately preceding the last day of the next
succeeding fiscal quarter (the “Applicable Relief Period”);

 

(iv)  the Company may deliver no more than seven (7) Applicable Relief Period
Notices during the Special Relief Period (and if the Company delivers more than
one (1) Applicable Relief Period Notice, then all Applicable Relief Period
Notices must cover consecutive Applicable Relief Periods), and each Applicable
Relief Period Notice will specify the Applicable Maximum Level for purpose of
the Applicable Relief Period selected in such Applicable Relief Period Notice;

 

(v)  (a) the “Special Relief Period” shall mean a period of two consecutive
years, occurring during the three-year period from December 31, 2017 through
December 30, 2020 (or a lesser period of time if the Special Relief Period
begins after December 31, 2018), and triggered to begin at the election of the
Company effective as of the last day of a fiscal quarter during such three-year
period (through the Company’s delivery, on a one-time basis and no later than 20
days after the last day of the applicable fiscal quarter, of a written notice to
the holders of the Notes, stating that the Company is electing the “Special
Relief Period” and specifying the beginning and ending dates thereof) (a
“Special Relief Period Notice”); (b) the “Applicable Maximum Level” shall mean
(x) 3.50 to 1.00, or (y) 3.75 to 1.00, provided that (1) the Company may elect
the Applicable Maximum Level of 3.75 to 1.00 only for up to three consecutive
Applicable Relief

 

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Periods, and (2) the Company may elect an Applicable Maximum Level of 3.50 to
1.00 for any or all of the Applicable Relief Periods; and (c) the “Applicable
Coupon Adjustment”) means 0.25% per annum during any Applicable Relief Period
when the Applicable Maximum Level is 3.50 to 1.00, or 0.50% per annum during any
Applicable Relief Period when the Applicable Maximum Level is 3.75 to 1.00;

 

(vi)  the coupon (including the applicable default rate) for the Notes, without
further consent or other action of any Person,

 

(x) shall automatically be deemed to be increased by 0.10% per annum beginning
the earlier of (i) December 31, 2018 and (ii) the commencement of the Special
Relief Period (and shall automatically, without further consent or other action
of any Person, be deemed to return to the original coupon (including the
applicable default rate) immediately after the earlier of (i) December 31, 2020
and (ii) the end of the Special Relief Period), and

 

(y) in addition to the adjustment provided in the immediately preceding
clause (x), shall automatically be deemed to be increased by the Applicable
Coupon Adjustment which applies based on the Applicable Maximum Level which is
available and has been selected by the Company for any Applicable Relief Period,
with such Applicable Coupon Adjustment to be effective during such Applicable
Relief Period (and such coupon shall automatically, without further consent or
other action of any Person, be deemed to return to the coupon (including the
applicable default rate) in effect as provided in the immediately preceding
clause (x) immediately after the end of such Applicable Relief Period); provided
that the coupon (including the applicable default rate) for the Notes, without
further consent or other action of any Person, in addition to the adjustment
provided in the immediately preceding clause (x), shall automatically be deemed
to be increased by 1.05% per annum (with such 1.05% per annum increase in the
coupon being in lieu of, rather than in addition to, the adjustments to the
coupon provided for in the portion of this clause (y) which precedes this
proviso) at all times (I) during the Special Relief Period when:  (1) a
below-investment grade Credit Rating is maintained; (2) a Credit Rating, after
initially having been obtained in accordance with paragraph 5L, has not been
maintained (through no fault of the Company) for a period of 120 consecutive
days; or (3) a Credit Rating, after initially having been obtained in accordance
with paragraph 5L, has not been maintained (for any reason other than through no
fault of the Company), and for the period thereafter until the end of the first
two full fiscal quarters immediately following the time when an investment grade
Credit Rating has been attained (or re-attained) and remains in effect at such
time, or (II) immediately following the end of the Special Relief Period and
until the end of the first two full fiscal quarters immediately following the
end of the Special Relief Period, but only if the 1.05% per annum coupon
adjustment provided for in this proviso was in effect on the last day of the
Special Relief Period as provided in the immediately preceding clause (I); and

 

(vii)  notwithstanding anything to the contrary in clauses (iii) through (vi) of
this paragraph 6A(2), (I) in no event shall an Applicable Relief Period extend
beyond the end of the Special Relief Period, (II) if a Credit Rating, after
initially having been obtained in accordance with paragraph 5L, has not been
maintained, then the Company shall notify the holders of the Notes thereof in
writing as soon as practicable but in no event later than five (5) Business Days
after such occurrence, including a description in reasonable detail (including,
without limitation, the initial date when the Credit Rating was no longer
maintained) of the circumstances related to and resulting in such occurrence,
and (III) if any interest payments were made on the Notes after the commencement
of the Special Relief Period and up to and including the date of the Company’s
election to begin the Special Relief Period, and/or if any interest payments
were paid on the Notes after the commencement of any Applicable Relief Period
and up to and including the date of the Company’s election to begin such
Applicable Relief Period, then in each such case the Company will promptly, and
in any event within five days, after such election pay to the

 

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holders of the Notes such additional amounts as would compensate for the
applicable additional coupon on the Notes for the period from the commencement
of the Special Relief Period and/or such Applicable Relief Period until the
applicable interest payment was made (any such payment, an “Interest Catch Up
Payment”);

 

(viii)  the Company may elect, but shall not be required, to commence an
Applicable Relief Period on the same day as the Special Relief Period (in each
case, by delivery of the notices contemplated by clauses (iii) and (v) within 20
days after the last day of the applicable fiscal quarter); and

 

(ix)  notwithstanding anything to the contrary in clauses (iii) through
(viii) of this paragraph 6A(2) or in paragraph 7A hereof:  (I) in no event shall
the failure of the Company to comply with a required Consolidated Leverage Ratio
on the last day of a fiscal quarter and until the Company delivers an Applicable
Relief Period Notice with respect to the applicable fiscal quarter within 20
days after the end of such fiscal quarter as set forth herein constitute a
Default or Event of Default hereunder at any time (including prior to the
delivery of an Applicable Relief Period Notice with respect to the applicable
fiscal quarter within 20 days thereafter as set forth herein) if such Applicable
Relief Period Notice is timely delivered by the Company and the maximum
permitted Consolidated Leverage Ratio elected by the Company in accordance with
this paragraph 6A(2) in such Applicable Relief Period Notice is equal to or
higher than the actual Consolidated Leverage Ratio as of the applicable fiscal
quarter end and for each day thereafter through and including the date of
delivery of such Applicable Relief Period Notice; (II) in no event shall the
failure of the Company to timely make interest payments on the Notes, to the
extent solely due to any retroactive adjustment to the coupon for the Notes due
to the provisions of this paragraph 6A(2), constitute a Default or Event of
Default hereunder at any time (including prior to the delivery of an Applicable
Relief Period Notice and/or a Special Relief Period Notice with respect to the
applicable fiscal quarter within 20 days thereafter as set forth herein) if the
Company timely makes the applicable Interest Catch Up Payment(s) under the
provisions of clause (vii) above; (III) the calculation of any Interest Catch Up
Payment shall not include interest on interest; and (IV) no interest at the
applicable default rate shall be due and payable with respect to any matter that
would have constituted a Default or Event of Default hereunder but for the
provisions of this paragraph 6A(2)(ix).  As an abundance of caution, nothing in
this paragraph 6A(2) shall impair or otherwise affect the right of the holders
of the Notes to charge interest at the applicable default rate in accordance
with the other terms of this Agreement and the Notes.”

 

1.3                               Paragraph 6C(4) is amended and restated, as
follows:

 

“6C(4).        Sale of Capital Assets.  Sell, lease or transfer or otherwise
dispose of any Capital Asset to any Person, except that (i) any Credit Party may
sell or otherwise dispose of any Capital Asset to any other Credit Party,
(ii) any Subsidiary that is not a Credit Party may sell or otherwise dispose of
any Capital Asset to the Company or any other Subsidiary and (iii) during any
rolling twelve-month period, the Company or any Subsidiary may sell or otherwise
dispose of Capital Assets which constituted up to 10% of the total value of the
consolidated assets of Matson Navigation and its Subsidiaries as of December 31,
2016, so long as (A) such Capital Assets sold contributed less than 25% of the
Consolidated Net Income of the Company in each of the three fiscal years
immediately preceding any such sale and (B) such Capital Assets, when considered
together with all other Capital Assets sold or otherwise disposed of subsequent
to December 31, 2016, do not constitute in excess of 30% of the total value of
the consolidated assets of Matson Navigation and its Subsidiaries as of
December 31, 2016, provided that this covenant shall not apply to any Lien
permitted hereunder;”

 

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1.4                               Clause (ii) of paragraph 7A is amended to
delete the reference to “$30,000,000” and to replace such reference with
“$40,000,000.”

 

1.5                               Clause (iv) of paragraph 7A is amended to
delete the reference to “paragraph 5H or paragraph 6” and to replace such
reference with “paragraph 5H, paragraph 5L or paragraph 6.”

 

1.6                               Clause (xii) of paragraph 7A is amended to
delete the reference to “$25,000,000” and to replace such reference with
“$40,000,000.”

 

1.7                               A new paragraph 7E is added, as follows:

 

“7E.                       Savings Clause.  The provisions of paragraphs
7A(i) and (iv) are subject in all respects to the provisions of paragraph
6A(2)(ix) as to the matters set forth therein.”

 

1.8                               The definitions of “Consolidated EBITDA,”
“Material Adverse Effect” and “Security Agreement” set forth in paragraph 10B
are amended and restated, as follows:

 

““Consolidated EBITDA” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus the following to the extent deducted in calculating such
Consolidated Net Income:  (i) Consolidated Interest Expense for such period,
(ii) the provision for federal, state, local and foreign income taxes payable
for such period, (iii) depreciation expense for such period, (iv) amortization
expense for such period, (v) deferred dry-docking amortization expense for such
period (to the extent not included in the preceding clause (iv)), and
(vi) non-cash stock-based compensation.  For purposes of calculating
Consolidated EBITDA for any period of four consecutive quarters, if during such
period the Company or any Subsidiary shall have consummated (i) an Acquisition
of a Person that constitutes a Material Subsidiary (including any such
Acquisition structured as an asset purchase, merger or consolidation) or an
Acquisition of a Material Line of Business, then Consolidated EBITDA for such
period shall be calculated after giving pro forma effect thereto as if such
transaction occurred on the first day of such period; provided, that if the
aggregate purchase price for any Acquisition is greater than or equal to
$25,000,000, Consolidated EBITDA shall only be calculated on a pro forma basis
with respect to such Acquisition to the extent such pro forma calculations are
based on (x) audited financial statements of such acquired Person or Material
Line of Business, (y) unaudited quarterly financial statements of such acquired
Person or Material Line of Business, so long as such financial statements have
been prepared in conformity with GAAP applied on a consistent basis, as in
effect from time to time, applied in a manner consistent with that used in
preparing the most recent audited financial statements of such Person or
Material Line of Business or (z) other financial statements reasonably
satisfactory to the Required Holders and (ii) a disposition of all or
substantially all of the assets of a Material Subsidiary or of at least 50% of
the equity interests of a Material Subsidiary or of a Material Line of Business,
then Consolidated EBITDA for such period shall be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day of such
period.

 

“Material Adverse Effect” means:  (a) a material adverse change in, or a
material adverse effect upon, on the business, financial condition or operations
of the Company and its Subsidiaries taken as a whole; (b) a material impairment
of the ability of any Credit Party to perform its obligations under any
Transaction Document; or (c) a material adverse effect on the material rights
and remedies of the holders of the Notes, which material adverse effect was not
caused by any holder of a Note.

 

“Security Agreement” means, individually, each of (a) that certain Security
Agreement (Vessel Type Aloha Class — Hull No. 29) dated as of the applicable
date thereof between Matson Navigation and the Collateral Agent in substantially
the form set forth as Exhibit C-3, (b) that

 

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certain Security Agreement (Vessel Type Aloha Class — Hull No. 30) dated as of
the applicable date thereof between Matson Navigation and the Collateral Agent
in substantially the form set forth as Exhibit C-4, (c) that certain Security
Agreement (Vessel Type Kanaloa Class — Hull Nos. 601 and 602) dated as of the
applicable date thereof between Matson Navigation and the Collateral Agent in
substantially the form set forth as Exhibit C-5, and (d) any other Security
Agreement with respect to an applicable Vessel (or contract to build a Vessel)
between a Credit Party and the Collateral Agent in substantially the form set
forth as Exhibits C-3, C-4 or C-5 with respect to such applicable Vessel (or
contract to build a Vessel) and designated in writing from time to time by any
Credit Party to the Collateral Agent as a “Security Agreement” hereunder.”

 

1.9                               New definitions of “Credit Rating,” “Rating
Agency,” “Second Amendment” and “Second Amendment Effective Date” are inserted
in their proper alphabetical order in paragraph 10B, as follows:

 

““Credit Rating” means the public credit rating of the Notes issued by a Rating
Agency, which credit rating identifies the Notes by their applicable Private
Placement Number issued by Standard & Poor’s CUSIP Bureau.

 

“Rating Agency” means, at any time, any nationally recognized statistical rating
organization which qualifies at such time for the ratings exception of the
Securities Valuation Office of the National Association of Insurance
Commissioners, except as agreed in writing by the parties to the Second
Amendment on or before June 29, 2017.

 

“Second Amendment” means that certain Amendment to 2013 Note Purchase Agreement,
dated as of June 29, 2017, by and between the Company and the holders of Notes
signatory thereto.

 

“Second Amendment Effective Date” means the date when all conditions to
effectiveness of the amendments set forth in the Second Amendment have been
satisfied or waived in writing.”

 

1.10                        A new Exhibit C-5 (Form of Hull Nos. 601 and 602
Security Agreement) is hereby added to the Agreement in the form of Exhibit C-5
hereto.

 

2.                                      Limitation of Modifications.  The
modifications effected in this letter agreement shall be limited precisely as
written and shall not be deemed to be (a) an amendment, consent, waiver or other
modification of any other terms or conditions of the Agreement or any other
document related to the Agreement, or (b) a consent to any future amendment,
consent, waiver or other modification.  Except as expressly set forth in this
letter agreement, each of the Agreement and the documents related to the
Agreement shall continue in full force and effect.

 

3.                                      Representations and Warranties.  The
Company hereby represents and warrants as follows:  (i) No Default or Event of
Default has occurred and is continuing (both immediately before and immediately
after giving effect to the effectiveness of this letter agreement); (ii) the
Company’s entering into and performance of the Agreement, as modified by this
letter agreement, has been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, or notice to or action by, any Person (including any governmental
authority) in order to be effective and enforceable; (iii) the Agreement, as
modified by this letter agreement, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its respective terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws of general application relating to
or affecting the enforcement of creditors’ rights or by general principles of
equity; and (iv) immediately after giving effect to this letter agreement,

 

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each of the representations and warranties of the Company set forth in the
Agreement is true, correct and complete in all material respects (other than
such representations and warranties as are expressly qualified by materiality
(including Material Adverse Effect), which representations and warranties shall
be true, correct and complete in all respects) as of the date hereof (except to
the extent such representations and warranties expressly relate to another date,
in which case such representations and warranties are true, correct and complete
in all material respects (other than such representations and warranties as are
expressly qualified by materiality (including Material Adverse Effect), which
representations and warranties shall be true, correct and complete in all
respects) as of such other date).

 

4.                                      Effectiveness.                    This
letter agreement shall become effective on the date on which:

 

(i) the Noteholders shall have received a fully executed counterpart of this
letter agreement from the Company;

 

(ii) the Noteholders shall have received a counterpart signature page to this
letter agreement from each of the Guarantors reaffirming their respective
obligations under the Multiparty Guaranty;

 

(iii) the Noteholders shall have received a fully executed copy of an amendment
and restatement of the Bank Credit Agreement and fully executed copies of
amendments to the Other Note Agreements, each in form and substance reasonably
satisfactory to the Required Holders;

 

(iv) the Noteholders shall have received their ratable share of a modification
fee in the aggregate amount equal to 6.25 basis points multiplied by the
aggregate outstanding amount of the Notes; and

 

(v) the Company shall have paid Vedder Price P.C. its accrued and unpaid legal
fees and expenses, to the extent such fees and expenses have been invoiced.

 

5.                                      Miscellaneous.

 

(a)                                 This document may be executed in multiple
counterparts, which together shall constitute a single document.  Delivery of
executed counterparts of this letter agreement by telefacsimile or other secure
electronic format (pdf) shall be effective as an original.

 

(b)                                 This letter agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of New York, excluding choice-of-law principles of the law
of such state that would permit the application of the laws of a jurisdiction
other than such state.

 

[Remainder of the page intentionally left blank]

 

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If you are in agreement with the foregoing, please sign the counterpart of this
letter agreement in the space indicated below and return it to the Noteholders
whereupon, subject to the conditions expressed herein, it shall become a binding
agreement among each party named as a signatory hereto.

 

 

 

 

Sincerely,

 

 

The foregoing Agreement is hereby accepted as of the date first above written.

 

NEW YORK LIFE INSURANCE COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Loyd T. Henderson

 

 

Name:

Loyd T. Henderson

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

 

 

 

 

 

 

By:

NYL Investors LLC, Its Investment Manager

 

 

 

 

 

 

 

 

 

 

By

/s/ Loyd T. Henderson

 

 

Name:

Loyd T. Henderson

 

 

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT (BOLI 30C)

 

 

 

 

 

 

By:

NYL Investors LLC, Its Investment Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Loyd T. Henderson

 

 

Name:

Loyd T. Henderson

 

 

Title:

Managing Director

 

 

 

Amendment to 2013 Matson/NY Life Note Agreement

 

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Accepted and agreed to
as of the date first
appearing above:

 

MATSON, INC., a Hawaii corporation

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

By:

/s/ Joel M. Wine

 

 

Name:

Joel M. Wine

 

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

Amendment to 2013 Matson/NY Life Note Agreement

 

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Each of the Guarantors hereby (a) consents to the amendments and other
modifications effected by this letter agreement and the other transactions
contemplated hereby, (b) reaffirms its obligations under the Multiparty Guaranty
(and any Joinder Agreement executed in connection therewith) and its waivers, as
set forth in the Multiparty Guaranty, of each and every one of the possible
defenses to such obligations, and (c) reaffirms that its obligations under the
Multiparty Guaranty are separate and distinct from the respective obligations of
the Company and Holdings under the Agreement and the Notes.

 

 

MATSON NAVIGATION COMPANY, INC. a Hawaii corporation

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

MATSON LOGISTICS, INC., a Hawaii corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board

 

 

 

 

 

 

 

 

 

 

MATSON VENTURES, INC., a Hawaii corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board and President

 

 

 

 

 

 

 

 

 

 

MATSON ALASKA, INC., a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

HORIZON LINES HOLDING CORP., a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

Amendment to 2013 Matson/NY Life Note Agreement

 

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HORIZON LINES, LLC, a Delaware limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

MATSON NAVIGATION COMPANY OF ALASKA, LLC, a Delaware limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

HORIZON LINES ALASKA VESSELS, LLC, a Delaware limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

HORIZON LINES MERCHANT VESSELS, LLC, a Delaware limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

Amendment to 2013 Matson/NY Life Note Agreement

 

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Exhibit C-5

 

(Form of Hull Nos. 601 and 602 Security Agreement)

 

Amendment to 2013 Matson/NY Life Note Agreement

 

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Exhibit C-5

 

(FORM OF KANALOA CLASS SECURITY AGREEMENT)

 

Vessel Type Kanaloa Class — Hull Nos. 601 and 602

 

SECURITY AGREEMENT dated                 ,     , between Matson Navigation
Company, Inc. (the “Obligor”) and Bank of America, N.A., in its capacity as
Collateral Agent (“Collateral Agent”) for the benefit of the Secured Parties (as
defined below).

 

Reference is made to (i) the Amended and Restated Credit Agreement dated as of
June 29, 2017 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”) among
Matson, Inc. (“Matson”), a Hawaii corporation, Bank of America, N.A., as
administrative agent (the “Agent”), and the lenders party thereto (together with
their respective successors, transferees and assigns, the “Lenders”), (ii) the
Note Purchase Agreement dated as of November 5, 2013 by and among Matson and
certain purchasers party thereto, as amended, supplemented and modified on or
prior to the date hereof (the “NYL 2013 Note Purchase Agreement”), (iii) the
Note Purchase Agreement dated as of July 30, 2015 by and among Matson and
certain purchasers party thereto, as amended, supplemented and modified on or
prior to the date hereof (the “NYL 2015 Note Purchase Agreement”), (iv) the
Third Amended and Restated Note Purchase Agreement and Private Shelf Agreement
dated as of September 16, 2016 by and among Matson and certain purchasers party
thereto, as amended, supplemented and modified on or prior to the date hereof
(the “Prudential 2016 Note Purchase Agreement”), (v) the Note Purchase Agreement
dated as of December 21, 2016 by and among Matson and certain purchasers party
thereto, as amended, supplemented and modified on or prior to the date hereof
(the “MetLife 2016 Note Purchase Agreement, and, collectively with the NYL 2013
Note Purchase Agreement, the NYL 2015 Note Purchase Agreement, the Prudential
2016 Note Purchase Agreement, the “Note Purchase Agreements”), (vi) the
guarantees of the obligations of Matson under the Credit Agreement and the Note
Purchase Agreements by certain subsidiaries of Matson, including the Obligor, as
amended, supplemented and modified on or prior to the date hereof (the
“Guaranties,” and collectively with the Credit Agreement and the Note Purchase
Agreements, the “Financing Agreements”), and (vii) the Intercreditor and
Collateral Agency Agreement dated as of July 30, 2015 among the Lenders and the
purchasers party to the Note Purchase Agreements (collectively, the “Secured
Parties”) and the Collateral Agent named therein, as amended, supplemented and
modified on or prior to the date hereof (the “Intercreditor Agreement”).

 

1.                                      GENERAL DEFINITIONS.

 

1.1                               As used herein, “UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York.

 

1.2                               All capitalized terms contained in this
Agreement, but not specifically defined in this Agreement, shall have the
meanings provided by the UCC to the extent the same are used or defined therein.

 

2.                                      OBLIGATIONS SECURED.  The Collateral (as
defined below) shall secure any and all obligations of the Obligor to or for the
benefit of the Secured Parties under the Guaranties, whether now existing or
hereafter arising, joint or several, absolute or contingent, liquidated or
unliquidated, and however arising (all such indebtedness, obligations and
liabilities of the Obligor under the Guaranties being collectively referred to
herein as the “Guaranty Obligations”; and the Financing Agreements, together
with any agreement, instrument, guaranty or other document now or hereafter
evidencing or

 

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securing any of the Guaranty Obligations, being collectively referred to herein
as the “Financing Documents”).

 

3.                                      GRANT OF SECURITY INTEREST.  To secure
the punctual payment and performance of the Guaranty Obligations when due
(whether at the stated maturity, by acceleration, demand or otherwise), the
Obligor effective as of the date hereof (the “Granting Date”) hereby grants to
the Collateral Agent for the benefit of the Secured Parties a security interest
in and to, and a lien upon (the “Security Interest”), all right, title and
interest of the Obligor in and to the following property, whether now owned and
existing or hereafter acquired or arising, and wherever located (collectively,
the “Collateral”):

 

(a)                                 that certain Contract for Construction of
Two Vessels for Matson Navigation Company, Inc. by and between National Steel
and Shipbuilding Company and Matson Navigation Company, Inc. dated as of
August 25, 2016 (the “Shipbuilding Contract”);

 

(b)                                 any personal property assets constituting
work in process under the Shipbuilding Contract, and any rights with respect
thereto (including without limitation the security interest of Obligor in
certain assets as set forth in Section 27(b) of the Shipbuilding Contract); and

 

(c)                                  all Proceeds of any of such property in
whatever form, whether derived from voluntary or involuntary disposition, all
products of any of such property, all renewals, replacements, substitutions, and
additions to or from any such property.

 

The Security Interest created herein shall be subject to any applicable
restriction to the creation of a Security Interest to the extent that such
restriction is not made ineffective by UCC Sections 9-406, 9-407, 9-408, or
9-409.

 

4.                                      REPRESENTATIONS AND WARRANTIES.  The
Obligor represents and warrants that:

 

4.1                               Authority.  The Obligor has full power and
authority to grant security interests in the Collateral, to execute and deliver
this Agreement, and to perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person except as
may have been specifically disclosed to the Secured Parties in writing.

 

4.2                               Information Regarding Names.  The Obligor has
disclosed to the Secured Parties in Schedule I hereto complete and correct
information regarding the Obligor’s exact legal name, type of organization and
jurisdiction of incorporation.

 

5.                                      COVENANTS AND AGREEMENTS OF THE
OBLIGOR.  The Obligor covenants and agrees as follows:

 

5.1                               Information Regarding Names.  At least 10 days
(or such shorter period of time approved in writing by the Collateral Agent)
before changing its name or adopting a new name, the Obligor shall give written
notice to the Collateral Agent of any new name of the Obligor.

 

5.2                               Further Assurances and Authority of Collateral
Agent.  The Obligor shall from time to time on and after the Granting Date
execute, deliver, file and record all such further agreements, instruments,
financing statements, notices and other documents (including any information
necessary to update Schedule I hereto) as may be reasonably requested by the
Collateral Agent to perfect or preserve the Security Interest, to enable the
Collateral Agent to notify any third parties of the existence of the Collateral
Agent’s Security Interest, or otherwise to carry out the intent of this
Agreement.  On and after

 

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the Granting Date, the Obligor authorizes the Collateral Agent to file financing
statements where desirable in the Collateral Agent’s judgment to perfect the
Security Interest under the UCC without the signature of the Obligor.

 

6.                                      RELEASE OF COLLATERAL; TERMINATION OF
AGREEMENT.

 

(a)                                 Provided that no Event of Default under any
of the Financing Agreements has then occurred and is continuing, upon delivery
of either Vessel (as defined in the Shipbuilding Contract) to the Obligor, the
Security Interest in the Collateral related to such Vessel (but, for the
avoidance of doubt, not the Collateral related to the other Vessel) shall be
automatically terminated and released.

 

(b)                                 Provided that no Event of Default under any
of the Financing Agreements has then occurred and is continuing, upon the
delivery of a written Notice of Termination of Security Interest from the
Obligor to the Collateral Agent in substantially the form set forth as Exhibit A
hereto (which the Obligor may deliver to the Collateral Agent at any time in its
sole discretion with or without the occurrence or happening of any event and
without any further action on the part of any party hereto), but, as an
abundance of caution, subject to the proviso at the beginning of this sentence,
the Security Interest in the Collateral shall be automatically terminated and
released, and this Security Agreement shall automatically terminate and no
longer be of any force or effect without any further action of any party

 

(c)                                  The Collateral Agent agrees, at the sole
expense of the Obligor, to promptly file UCC amendments and execute and deliver
any other documents or instruments reasonably requested by Obligor to evidence
the termination of the Security Interest so released with respect to (i) the
applicable Collateral (as set forth in Section 6(a) above) and (ii) all of the
Collateral (as set forth in Section 6(b) above).

 

7.                                      RIGHTS AND REMEDIES OF THE SECURED
PARTIES UPON EVENT OF DEFAULT.

 

7.1                               Effect of Event of Default Remedies.  If any
Event of Default described in the Financing Documents shall occur and be
continuing, the Collateral Agent shall have all of the rights, powers and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code of the state in which such rights, powers and remedies are
asserted.

 

7.2                               Application of Proceeds.  Subject to the
rights of any prior secured party, any proceeds received by the Secured Parties
in respect of any sale of collection from, or other realization upon all or any
part of the Collateral following the occurrence of an Event of Default shall be
applied as set forth in the Intercreditor Agreement.

 

7.3                               Notice.  Any notice required to be given by
the Collateral Agent of a sale, lease, or other disposition of Collateral, or
any other intended action by the Collateral Agent, which is sent pursuant to
Section 11 hereof at least ten (10) days prior to such proposed action, or such
longer period as shall be specified by applicable law, shall constitute
commercially reasonable and fair notice thereof to the Obligor.

 

8.                                      REMEDIES NOT EXCLUSIVE; FORECLOSURES. 
No right or remedy hereunder is exclusive of any other right or remedy.  Each
and every right and remedy shall be cumulative and shall be in addition to and
without prejudice to every other remedy given hereunder, under any other
agreement between the Obligor and the Collateral Agent or now or hereafter
existing at law or in equity, and may be

 

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exercised from time to time as often as deemed expedient, separately or
concurrently.  The giving, taking or enforcement of or execution against any
other or additional security, collateral, or guaranty for the payment of the
Guaranty Obligations shall not operate to prejudice, waive or affect any rights,
powers or remedies hereunder, nor shall the Collateral Agent be required to
first look to, enforce, exhaust or execute against such other or additional
security, or guarantees prior to so acting against the Collateral.  The
Collateral Agent may foreclose on or execute against the items of Collateral in
such order as the Collateral Agent may, in its sole and unfettered discretion,
determine.

 

9.                                      WAIVERS.  The failure or delay of the
Collateral Agent to insist in any instances upon the performance of any of the
terms, covenants or conditions of this Agreement or other Financing Documents,
or to exercise any right, remedy or privilege herein or therein conferred, shall
not impair or be construed as thereafter waiving any such covenants, remedies,
conditions or provisions, but every such term, condition and covenant shall
continue and remain in full force and effect; nor shall any waiver of an Event
of Default suspend, waive or affect any other Event of Default, whether the same
is prior or subsequent thereto and whether of the same or of a different type.

 

10.                               SEVERABILITY.  Wherever possible, each
provision of this Agreement shall be interpreted in such a manner as to be
effective.  If any provision of this Agreement shall be held to be prohibited by
or invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.

 

11.                               NOTICE.  All notices, demands and
communications hereunder shall be in writing and shall be by messenger or
overnight air courier, facsimile transmission, e-mail or United States mail and
shall be deemed to have been given when delivered (or, if such day is not a
business day, the next occurring business day) by messenger or overnight air
courier, upon completion of facsimile transmission or e-mail (with, in each
case, electronic confirmation of receipt) or two business days after deposit in
the United States mail, registered or certified, with postage prepaid, addressed
to the parties at the addresses set forth on the signature page hereof, or at
such other address as any party shall have furnished to the other parties in
writing in accordance with the requirements of this Section 11.

 

12.                               GOVERNING LAW.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.

 

13.                               WAIVERS BY THE OBLIGOR.  Except as otherwise
expressly provided in this Agreement or the other Financing Documents, the
Obligor waives:  (i) presentment, demand, and protest and notice of presentment,
protest, default, non-payment, maturity, release, compromise, settlement,
extension, or renewal of any or all Financing Documents under or pursuant to
which the Obligor may in any way be liable and hereby ratifies and confirms
whatever the Collateral Agent or Secured Parties may do in this regard;
(ii) notice prior to taking possession or control of Collateral or any bond or
security that might be required by any court prior to allowing the Collateral
Agent to exercise any remedies; (iii) the benefit of all valuation,
appraisement, and exemption laws; (iv) any right to require the Collateral Agent
to proceed against any other person or collateral held from any other person;
(v) any right to require the Collateral Agent to pursue any other remedy in the
Collateral Agent’s power whatsoever; or (vi) any defense arising out of any
election by Collateral Agent to exercise or not exercise any right or remedy it
may have against the Obligor, any other person or any security held by it, even
though such election operates to impair or extinguish any right of reimbursement
to subrogation or other right or remedy of the Obligor against any other person
or any such security.

 

14.                               ADDITIONAL SECURED PARTIES.  If any Loan Party
enters into any other Note Purchase Agreement (as defined in the Credit
Agreement), then, upon written notice by the Obligor to the

 

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Collateral Agent and the Secured Parties, the holders of the indebtedness under
such Note Purchase Agreements shall become additional Secured Parties (each, an
“Additional Secured Party”) hereunder.  Effective upon such notice, each
Additional Secured Party shall have the same rights and obligations as the other
Secured Parties hereunder and the term “Secured Parties” as used herein shall be
deemed to include each such Additional Secured Party.  Notwithstanding
Section 15.2, no consent of the Collateral Agent or any Secured Party shall be
necessary to add such holders as additional Secured Parties.

 

15.                               MISCELLANEOUS.  The Obligor agrees that the
following shall govern the interpretation and enforcement of this Agreement:

 

15.1                        Binding on Successors.  This Agreement shall be
binding upon the Obligor, the administrators, successors and assigns of the
Obligor, and shall inure to the benefit of and be enforceable by the Collateral
Agent, its successors, transferees and assigns.

 

15.2                        No Oral Modifications.  None of the terms or
provisions of this Agreement may be waived, altered, modified, limited or
amended except pursuant to the agreement thereto of the parties hereto in
writing.

 

15.3                        Section Titles.  The section titles contained in
this Agreement are merely for convenience and shall be without substantive
meaning or content.

 

15.4                        Construction.  The word “including” shall have the
inclusive meaning represented by the phrase “including without limitation.” 
Unless the context of this Agreement clearly otherwise requires, the word “or”
shall have the meaning represented by the phrase “and/or,” references to the
plural include the singular and references to the singular include the plural.

 

16.                               WAIVER OF JURY TRIAL.  The Obligor and the
Collateral Agent each irrevocably and unconditionally waive trial by jury in any
action or proceeding relating to this Agreement or any other Financing Document
and for any counterclaim therein.

 

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IN WITNESS WHEREOF, this Agreement is executed and delivered as of the date
first set forth above.

 

 

 

OBLIGOR:

 

 

 

 

 

MATSON NAVIGATION COMPANY, INC.,

 

 

a Hawaii corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

[Insert]

 

 

 

 

 

 

 

 

 

 

 

COLLATERAL AGENT:

 

 

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

[Insert]

 

 

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Schedule I

 

Legal Name, Type of Organization and Jurisdiction of Organization

 

Matson Navigation Company, Inc., a Hawaii corporation

 

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Exhibit A

 

Notice of Termination of Security Interest

 

[                ], 20[   ]

 

[Address of Collateral Agent]

 

Re:                             Security Agreement dated [                ],
20[  ] (Vessel Type Kanaloa Class — Hull Nos. 601 and 602) (the “Security
Agreement”) between Matson Navigation Company, Inc. (the “Company”) and Bank of
America, N.A as Collateral Agent

 

Ladies and Gentlemen:

 

The Company hereby notifies you that, effective as of the date hereof, the
Security Interest (as defined in the Security Agreement) is terminated.

 

Very truly yours,

 

MATSON NAVIGATION COMPANY, INC.

 

 

a Hawaii corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

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