Exhibit 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
June 11, 2009, is by and among HORIZON LINES, INC., a Delaware corporation (the
“Borrower”), the Subsidiaries of the Borrower as may from time to time become a
party hereto (collectively, the “Guarantors”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, as administrative agent on behalf of the Lenders under the Credit
Agreement (as hereinafter defined) (in such capacity, the “Administrative
Agent”). Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed thereto in the Credit Agreement.
W I T N E S S E T H
     WHEREAS, the Borrower, the Guarantors, certain banks and financial
institutions from time to time party thereto (the “Lenders”) and the
Administrative Agent are parties to that certain Credit Agreement dated as of
August 8, 2007 (as amended, modified, extended, restated, replaced, or
supplemented from time to time, the “Credit Agreement”); and
     WHEREAS, the Credit Parties and the Required Lenders have agreed to amend
the Credit Agreement in accordance with and subject to the terms and conditions
set forth herein.
     NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
     1.1 New Definitions. The following definitions are hereby added to
Section 1.1 of the Credit Agreement in the appropriate alphabetical order:
     “Deposit Account Control Agreement” shall mean an agreement, among a Credit
Party, a depository institution, and the Administrative Agent, which agreement
is in a form reasonably acceptable to the Administrative Agent and the
depository institution and which provides the Administrative Agent with
“control” (as such term is used in Article 9 of the UCC) over the deposit
account(s) described therein (which control is exercisable upon the occurrence
and continuance of an Event of Default), as the same may be amended, modified,
extended, restated, replaced, or supplemented from time to time.
     “DOJ Investigation” shall mean the investigation by the Antitrust Division
of the United States Department of Justice regarding possible antitrust
violations by the Credit Parties or their Subsidiaries with respect to the ocean
shipping business.

 

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     “First Amendment” shall mean the First Amendment to Credit Agreement, dated
as of the First Amendment Effective Date, among the Credit Parties and the
Administrative Agent, on behalf of the Lenders.
     “First Amendment Effective Date” shall mean June 11, 2009.
     “Litigation Matters” shall mean any civil action, criminal action or
investigation, including related shareholder litigation, involving any
allegation of a violation of federal, state or other antitrust law by any of the
Credit Parties or their Subsidiaries with respect to the ocean shipping
business.
     “Puerto Rico Settlement” shall mean the settlement of certain class action
lawsuits (which were consolidated into a single multidistrict litigation
proceeding (case no. MDL1960) in the District of Puerto Rico), in each case
involving any allegation of a violation of federal, state or other antitrust law
by any of the Credit Parties or their Subsidiaries with respect to the ocean
shipping business in the Puerto Rico trade lanes.
     “Securities Account Control Agreement” shall mean an agreement among a
Credit Party, a securities intermediary, and the Administrative Agent, which
agreement is in a form reasonably acceptable to the Administrative Agent and the
securities intermediary and which provides the Administrative Agent with
“control” (as such term is used in Articles 8 and 9 of the UCC) over the
securities account(s) described therein (which control is exercisable upon the
occurrence and continuance of an Event of Default), as the same may be as
amended, modified, extended, restated, replaced, or supplemented from time to
time.
     1.2 Deleted Definitions. The definitions of “Additional Loan”, “Incremental
Facility”, “Incremental Revolver” and “Incremental Term Loan” are hereby deleted
from Section 1.1 of the Credit Agreement.
     1.3 Amendments to Definition of Applicable Percentage. The definition of
“Applicable Percentage” set forth in Section 1.1 of the Credit Agreement is
hereby amended in the following respects:
     (a) The pricing grid contained therein is hereby amended and restated in
its entirety to read as follows:

                      Consolidated Senior Secured   Base Rate   LIBOR Margin  
Commitment Level   Leverage Ratio   Margin   and L/C Fee   Fee I   < 1.25 to
1.00   1.75%   2.75%   0.375% II   ³ 1.25 to 1.00 but < 2.00 to 1.00   2.00%  
3.00%   0.50% III   ³ 2.00 to 1.00 but < 2.75 to 1.00   2.25%   3.25%   0.50% IV
  ³ 2.75 to 1.00   2.50%   3.50%   0.50%

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     (b) A new sentence is hereby added to the end of such definition to read as
follows:
     Notwithstanding the foregoing, the Applicable Percentage shall be as set
forth above opposite Level III beginning on the First Amendment Effective Date
through (but not including) the first Interest Determination Date after the
First Amendment Effective Date.
     1.4 Amendment to Definition of Consolidated EBITDA. The definition of
Consolidated EBITDA set forth in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
     “Consolidated EBITDA” shall mean, as of any date of determination for the
four consecutive fiscal quarter period ending on such date, without duplication,
(a) Consolidated Net Income for such period plus (b) the sum of the following to
the extent deducted in calculating Consolidated Net Income (all as determined in
accordance with GAAP): (i) Consolidated Interest Expense for such period,
(ii) tax expense (including, without limitation, any federal, state, local and
foreign income and similar taxes (including tonnage taxes)) of the Credit
Parties and their Subsidiaries for such period, (iii) depreciation and
amortization expense of the Credit Parties and their Subsidiaries for such
period, (iv) any extraordinary charges or impairment charges, in each case to
the extent non-cash, or other non-cash charges or non-cash expenses, in each
case incurred other than in the ordinary course of business (including non-cash
charges for the cumulative effect of accounting changes and non-cash charges
with respect to the resolution of Litigation Matters in excess of the
$25,000,000 permitted to be added back pursuant to clause (b)(xvi) below) for
such period, (v) the interest component of rent expense for such period
associated with all Capital Lease Obligations and Synthetic Leases under which
any Credit Party or Subsidiary is the lessee, (vi) Transaction Costs incurred by
a Credit Party or any Subsidiary during such period, (vii) transaction costs and
expenses incurred in connection with Permitted Acquisitions, (viii) any expense
or loss associated with (A) any proposed or completed equity or debt financing
on or prior to the Closing Date and (B) the early retirement, extinguishment or
refinancing of debt, including bonuses paid with respect to the completion of
any of the foregoing, (ix) any cash or non-cash fees, expenses or charges
incurred other than in the ordinary course of business associated with any
restructuring of the Borrower and changes in the Borrower’s method of operations
pursuant to its cost reduction programs in an aggregate amount not to exceed,
with respect to such cash fees, expenses or charges, 10% of Consolidated EBITDA
during such period, (x) non-cash charges resulting from the application of
purchase accounting, (xi) non-cash compensation charges, including any such
charges arising from stock options, restricted stock grants or other
equity-incentive programs or from the forgiveness of loans made to employees in
connection with the purchase of equity and related tax gross-up payments made in
cash on or prior to the Closing Date, (xii) non-cash expenses resulting from the
granting of stock options, restricted stock or restricted stock unit awards
under equity compensation programs solely with respect to Capital Stock,
(xiii) expenses incurred as a result of the repurchase, redemption or retention
by the Borrower of Capital Stock earned under equity

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compensation programs solely in order to make withholding tax payments,
(xiv) expenses incurred as a result of the Share Repurchase Program (but
excluding the actual cost of any share repurchase), (xv) the amount of any
non-controlling (minority) interest expense attributable to non-controlling
(minority) equity interests of the Credit Parties and their Subsidiaries in any
joint venture thereof, (xvi) any cash or non-cash charges for such period
relating to the Puerto Rico Settlement and lawsuits of claimants that opt out of
the class action lawsuits that are subject to the Puerto Rico Settlement, or the
DOJ Investigation; provided that the aggregate amount of such cash and non-cash
charges shall not exceed $25,000,000 (net of any insurance proceeds received in
connection therewith) during the term of this Agreement and (xvii) legal and
professional fees and expenses incurred by the Credit Parties during such period
relating to Litigation Matters in an aggregate amount not to exceed (A)
$15,000,000 during any twelve-month period and (B) $25,000,000 during the term
of this Agreement; minus (c) non-cash charges and non-cash expenses previously
added back to Consolidated Net Income in determining Consolidated EBITDA
(including non-cash charges with respect to Litigation Matters added back to
Consolidated Net Income pursuant to clause (b)(iv) above) to the extent such
non-cash charges and non-cash expenses have become cash charges and cash
expenses during such period; minus (d) any extraordinary cash gains,
extraordinary non-cash gains and other non-cash gains during such period; minus
(e) the amount of any non-controlling (minority) interest income attributable to
non-controlling (minority) equity interests of the Credit Parties and their
Subsidiaries in any joint venture thereof to the extent included in the
calculation of Consolidated Net Income.
     1.5 Amendment to Definition of Consolidated Net Income. The definition of
Consolidated Net Income set forth in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
     “Consolidated Net Income” shall mean, as of any date of determination for
any period ending on such date, the net income or loss (excluding extraordinary
losses and gains and all non-cash income expense, interest income and tax
credits) of the Credit Parties and their Subsidiaries on a Consolidated basis
for such period, all as determined in accordance with GAAP.
     1.6 Amendment to Definition of Restricted Payment. The definition of
Restricted Payment set forth in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
     “Restricted Payment” shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares (or equivalent) of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares (or
equivalent) of any class of Capital Stock of any Credit Party or any of its
Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any Credit Party or any of its
Subsidiaries, now or hereafter outstanding, (d) any payment with respect to any
earn out

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obligation, (e) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, any Subordinated Debt of any Credit Party or
any of its Subsidiaries, (f) the payment by any Credit Party or any of its
Subsidiaries of any management, advisory or consulting fee to any Person or the
payment of any extraordinary salary, bonus or other form of compensation to any
Person who is directly or indirectly a significant partner, shareholder, owner
or executive officer of any such Person, to the extent such extraordinary
salary, bonus or other form of compensation is not included in the corporate
overhead of such Credit Party or such Subsidiary, (g) any cash payment with
respect to Indebtedness convertible into Capital Stock due upon the conversion
thereof and (h) any prepayment of principal or any redemption, purchase,
retirement, defeasance, sinking fund or similar payment prior to maturity with
respect to any unsecured Indebtedness, Indebtedness convertible into Capital
Stock or other Indebtedness junior to the Loans of any Credit Party or any of
its Subsidiaries.
     1.7 Amendment to Definition of Transaction Costs. The definition of
Transaction Costs set forth in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
     “Transaction Costs” shall mean the fees and expenses incurred by the
Borrower and its Subsidiaries in connection with (a) the Transactions and
(b) the First Amendment.
     1.8 Amendment to Section 2.5. Section 2.5 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
     Section 2.5 [Reserved].
     1.9 Amendment to Section 4.2. Subsection (g) contained in Section 4.2 of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:
     (g) [Reserved].
     1.10 Amendment to Section 5.14. The last sentence contained in
Section 5.14(a) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
     Without limiting the foregoing, the Credit Parties hereby agree that upon
entering into any Bank Product after the Closing Date, they will execute,
deliver and cause to be recorded an amendment to the Vessel Fleet Mortgage as
reasonably requested by the Administrative Agent.
     1.11 Amendment to Section 6.1. Section 6.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

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     Section 6.1 Consolidated Senior Secured Leverage Ratio.
     The Consolidated Senior Secured Leverage Ratio for the twelve (12) month
period ending as of each fiscal quarter end shall be less than or equal to
(a) at all times from the Closing Date through and including the fiscal quarter
ended on or around September 30, 2009, 3.00 to 1.00 and (b) at all times
thereafter, 2.75 to 1.00.
     1.12 Amendment to Section 7.1. Subsection (e) contained in Section 7.1 of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:
     (e) Indebtedness and obligations owing under Bank Products (including,
without limitation, Secured Hedging Agreements and other Hedging Agreements
entered into not for speculative purposes);
     1.13 Amendment to Section 7.10. Subsection (f) contained in Section 7.10 of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:
     (f) to make any other Restricted Payments; provided that, on a Pro Forma
Basis after giving effect to any such Restricted Payment, (i) no Default or
Event of Default shall exist or would result therefrom, (ii) there shall be at
least $20,000,000 of Accessible Borrowing Availability, (iii) if such Restricted
Payment is a dividend or other distribution, direct or indirect, on account of
any shares (or equivalent) of any class of Capital Stock of any Credit Party or
any of its Subsidiaries, now or hereafter outstanding, (A) the Consolidated
Senior Secured Leverage Ratio shall be less than 2.50 to 1.00 and (B) the
aggregate amount of all such dividends and distributions during any twelve-month
period shall not exceed $14,000,000 and (iv) if such Restricted Payment is not a
dividend or distribution subject to clause (iii) above, the Consolidated Senior
Secured Leverage Ratio shall be less than 1.50 to 1.00.
     1.14 Amendment to Article VII. A new Section 7.14 is hereby added at the
end of Article VII of the Credit Agreement to read as follows:
     Section 7.14 Account Control Agreements; Bank Accounts.
     (a) Within sixty (60) days after the First Amendment Effective Date (or
such extended period of time as agreed to by the Administrative Agent), the
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that the cash concentration account and the money market
account of Horizon Lines, LLC held at JPMorgan Chase Bank, N.A. are subject to a
Deposit Account Control Agreement and a Securities Account Control Agreement,
respectively, or have been closed (with the funds and financial assets contained
in such accounts having been transferred to a deposit account that is subject to
a Deposit Account Control Agreement or a securities account that is subject to a
Securities Account Control Agreement).
     (b) Subject to the terms of Section 7.14(a), each of the Credit Parties
will not, nor will it permit any Subsidiary to, open, maintain or otherwise have
any checking,

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savings or other accounts (including securities accounts) at any bank or other
financial institution, or any other account where cash or Cash Equivalents is or
may be deposited or maintained with any Person, other than (i) deposit accounts
that are subject to a Deposit Account Control Agreement, (ii) securities
accounts that are subject to a Securities Account Control Agreement,
(iii) deposit accounts established solely as payroll, zero balance and imprest
accounts and (iv) other deposit accounts, so long as (A) the balance of each
such account is transferred to a deposit account that is subject to a Deposit
Account Control Agreement not less than once during every ten (10) business days
and (B) the balance in any such account does not exceed $4,000,000 at any time
and the balance in all such accounts does not exceed $10,000,000 at any time.
     1.15 Amendments to Section 8.1. Section 8.1(f) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
     (f) Judgment Default. (i) One or more judgments, decrees, settlements or
fines (individually a “Judgment” and collectively the “Judgments”) shall be
entered by or entered or levied against a Credit Party or any of its
Subsidiaries relating to the Puerto Rico Settlement (other than Judgments with
respect to lawsuits of claimants that opt out of the class action lawsuits that
are subject to the Puerto Rico Settlement) and shall require aggregate cash
payments in excess of $20,000,000; (ii) one or more Judgments (other than
Judgments referenced in clause (i)) shall be entered by or entered or levied
against a Credit Party or any of its Subsidiaries involving in the aggregate for
all such Judgments a liability (to the extent not covered by insurance) of
$15,000,000 or more, and all such Judgments shall not have been paid and
satisfied in full, vacated, discharged in full, stayed or bonded pending appeal
within 45 days from the entry thereof; provided that, in the event any such
Judgment with respect to the DOJ Investigation allows for payment or other
satisfaction over a period greater than 45 days, such Judgment shall not
constitute an Event of Default hereunder if (A) the amount of cash payments with
respect to such Judgment does not exceed (1) $10,000,000 in the aggregate during
any fiscal year of the Borrower and (2) $30,000,000 in the aggregate for all
such cash payments, and (B) each payment with respect to such Judgment is made
within 15 days of the due date with respect to such payment; (iii) any
injunction, temporary restraining order or similar decree shall be issued
against a Credit Party or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; or
(iv) any default or event of default shall occur under Section 5.10(h) (judgment
default) or any successor section of the Indenture, dated as of August 8, 2007,
between the Borrower, as issuer, and The Bank of New York Trust Company, N.A.,
as trustee, relating to the 2007 Senior Unsecured Convertible Notes; or
     1.16 Amendments to Section 9.12. The words “or Incremental Facility”
appearing in the last sentence of Section 9.12 of the Credit Agreement are
hereby deleted in their entirety .
ARTICLE II
REVOLVING COMMITTED AMOUNT

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     Pursuant to Section 2.7(a) of the Credit Agreement, the Borrower hereby
elects to permanently reduce the Revolving Committed Amount to TWO HUNDRED
TWENTY FIVE MILLION DOLLARS ($225,000,000). The Credit Parties and the
Administrative Agent, on behalf of the Lenders, hereby agree that, after giving
effect to this Amendment (a) the notice requirement set forth in Section 2.7(a)
for any voluntary reduction of the Revolving Committed Amount is hereby waived,
(b) the Revolving Committed Amount shall be reduced to $225,000,000 and (c) the
Revolving Commitments of each Revolving Lender shall be reduced pro rata to
accommodate such reduction of the Revolving Committed Amount in accordance with
Section 2.12(a) of the Credit Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
     3.1 Closing Conditions. This Amendment shall become effective as of the day
and year set forth above (the “Amendment Effective Date”) upon satisfaction of
the following conditions (in each case, in form and substance reasonably
acceptable to the Administrative Agent):
     (a) Executed Amendment. The Administrative Agent shall have received a copy
of this Amendment duly executed by each of the Credit Parties and the
Administrative Agent, on behalf of the Lenders.
     (b) Executed Lender Consents. The Administrative Agent shall have received
executed consents, in substantially the form of Exhibit A attached hereto (each
a “Lender Consent”), from the Required Lenders (including Revolving Lenders
holding in the aggregate more than 50% of the outstanding Revolving Commitments)
authorizing the Administrative Agent to enter into this Amendment on their
behalf. The delivery by the Administrative Agent of its signature page to this
Amendment shall constitute conclusive evidence that the consents from the
Required Lenders have been obtained.
     (c) Default. After giving effect to this Amendment, no Default or Event of
Default shall exist.
     (d) Fees and Expenses.
     (i) The Administrative Agent shall have received from the Borrower, for the
account of each Lender that executes and delivers a Lender Consent to the
Administrative Agent by 5 p.m. (EST) on or before May 28, 2009 (each such
Lender, a “Consenting Lender”, and collectively, the “Consenting Lenders”), an
amendment fee in an amount equal to 50 basis points on (A) the aggregate
Revolving Commitment of such Consenting Lender (prior to giving effect to the
reduction in the Revolving Committed Amount contemplated by Article II hereof)
and (B) the outstanding principal amount of the Term Loan held by such
Consenting Lenders.

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     (ii) The Administrative Agent and Wachovia Capital Markets, LLC and Banc of
America Securities LLC, as joint lead arrangers (collectively, the “Lead
Arrangers”), shall have received from the Borrower such other fees and expenses
that are payable in connection with the consummation of the transactions
contemplated hereby and Moore & Van Allen PLLC shall have received from the
Borrower payment of all outstanding fees and expenses previously incurred and
all fees and expenses incurred in connection with this Amendment.
     (e) Puerto Rico Settlement. The Administrative Agent shall have received a
copy of the settlement agreement with respect to the Puerto Rico Settlement
(which shall not differ in any material respects from the final, fully executed
settlement agreement), in form and substance reasonably acceptable to the
Administrative Agent (which acceptance shall not be unreasonably withheld or
delayed), which settlement agreement shall limit the cash payment liabilities
and obligations of the Credit Parties and their Subsidiaries with respect to the
Puerto Rico Settlement to no more than $20,000,000 (it being understood and
agreed that the final, fully executed settlement agreement shall be delivered to
the Administrative Agent promptly upon becoming available).
     (f) Organizational Documents. The Administrative Agent shall have received:
     (i) Articles and Bylaws. A certificate of a secretary or assistant
secretary of the Borrower (in form and substance reasonably satisfactory to the
Administrative Agent) certifying that the articles of incorporation, bylaws
and/or other organizational documents, as applicable, of each Credit Party that
were delivered on the Closing Date (as defined in the Credit Agreement) or the
date on which any Credit Party was joined as a Guarantor pursuant to the terms
of the Credit Agreement (the “Joinder Date”), or certified updates as
applicable, remain true and correct and in force and effect as of the Amendment
Effective Date.
     (ii) Resolutions. A copy of resolutions of the board of directors of the
Borrower approving and adopting this Amendment, the transactions contemplated
herein and authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of the Borrower (pursuant to a secretary’s certificate in
form and substance reasonably satisfactory to the Administrative Agent) as of
the Amendment Effective Date to be true and correct and in force and effect as
of such date.
     (iii) Good Standing. A copy of certificates of good standing, existence or
its equivalent with respect to each Credit Party certified as of a recent date
by the appropriate Governmental Authorities of the state of its incorporation or
organization.
     (iv) Incumbency. A certificate of a secretary or assistant secretary of the
Borrower (in form and substance reasonably satisfactory

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to the Administrative Agent) certifying that each Person listed in the
incumbency certification contained in the Borrower’s Secretary’s Certificate
delivered on the Closing Date remains the duly elected and qualified officer of
the Borrower indicated in such Secretary’s Certificate.
     (g) Legal Opinion. The Administrative Agent shall have received an opinion
of counsel for the Borrower, dated the Amendment Effective Date and addressed to
the Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Administrative Agent.
     (h) Miscellaneous. All other documents and legal matters in connection with
the transactions contemplated by this Amendment shall be reasonably satisfactory
in form and substance to the Administrative Agent and its counsel.
ARTICLE IV
MISCELLANEOUS
     4.1 Amended Terms. On and after the Amendment Effective Date, all
references to the Credit Agreement in each of the Credit Documents shall
hereafter mean the Credit Agreement as amended by this Amendment. Except as
specifically amended hereby or otherwise agreed, the Credit Agreement is hereby
ratified and confirmed and shall remain in full force and effect according to
its terms.
     4.2 Representations and Warranties of Credit Parties. Each of the Credit
Parties represents and warrants as follows:
     (a) It has taken all necessary action to authorize the execution, delivery
and performance of this Amendment.
     (b) This Amendment has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
     (c) No consent, approval, authorization that has not been obtained, or
order of, or filing, registration or qualification with, any court or
governmental authority or third party is required in connection with the
execution, delivery or performance by such Person of this Amendment.
     (d) The representations and warranties set forth in Article III of the
Credit Agreement (i) that contain a materiality qualification are true and
correct as of the date hereof and (ii) that do not contain a materiality
qualification are true and correct in all material respects as of the date
hereof, in each case except for those which expressly relate to an earlier date.

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     (e) After giving effect to this Amendment, no event has occurred and is
continuing which constitutes a Default or an Event of Default.
     (f) The Security Documents continue to create a valid security interest in,
and Lien upon, the Collateral, in favor of the Administrative Agent, for the
benefit of the Lenders, which security interests and Liens are perfected in
accordance with the terms of the Security Documents and prior to all Liens other
than Permitted Liens.
     (g) The Credit Party Obligations are not reduced or modified by this
Amendment and are not subject to any offsets, defenses or counterclaims.
     4.3 Reaffirmation of Credit Party Obligations. Each Credit Party hereby
ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is
bound by all terms of the Credit Agreement applicable to it and (b) that it is
responsible for the observance and full performance of its respective Credit
Party Obligations.
     4.4 Credit Document. This Amendment shall constitute a Credit Document
under the terms of the Credit Agreement.
     4.5 Expenses. The Borrower agrees to pay all reasonable costs and
out-of-pocket expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including without
limitation the reasonable fees and expenses of the Administrative Agent’s legal
counsel.
     4.6 Further Assurances. The Credit Parties agree to promptly take such
action, upon the request of the Administrative Agent, as is necessary to carry
out the intent of this Amendment.
     4.7 Entirety. This Amendment and the other Credit Documents embody the
entire agreement among the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.
     4.8 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of an
executed counterpart to this Amendment by telecopy or other electronic means
shall be effective as an original and shall constitute a representation that an
original will be delivered.
     4.9 No Actions, Claims, Etc. As of the date hereof, each of the Credit
Parties hereby acknowledges and confirms that it has no knowledge of any
actions, causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, against the Administrative Agent, the Lead
Arrangers, the Bookrunners, the Lenders, or the Administrative Agent’s, the Lead
Arrangers’, the Bookrunners’, or the Lenders’ respective officers, employees,
representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act under the Credit Documents on or
prior to the date hereof.

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     4.10 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
     4.11 Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
     4.12 General Release. In consideration of the Administrative Agent’s, on
behalf of the Lenders, willingness to enter into this Amendment, each Credit
Party hereby releases and forever discharges the Administrative Agent, the Lead
Arrangers, the Bookrunners, the Lenders and the Administrative Agent’s, the Lead
Arrangers’, the Bookrunners’ and the Lender’s respective predecessors,
successors, assigns, officers, managers, directors, employees, agents,
attorneys, representatives, and affiliates (hereinafter all of the above
collectively referred to as the “Released Parties”), from any and all claims,
counterclaims, demands, damages, debts, suits, liabilities, actions and causes
of action of any nature whatsoever, including, without limitation, all claims,
demands, and causes of action for contribution and indemnity, whether arising at
law or in equity, whether known or unknown, whether liability be direct or
indirect, liquidated or unliquidated, whether absolute or contingent, foreseen
or unforeseen, and whether or not heretofore asserted, which any Credit Party
may have or claim to have against any of the Released Parties in any way related
to or connected with the Credit Documents and the transactions contemplated
thereby.
     4.13 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, service of process and waiver of jury trial provisions set forth
in Sections 10.14 and 10.17 of the Credit Agreement are hereby incorporated by
reference, mutatis mutandis.
     4.14 Reservation of Rights. The Administrative Agent and the Lenders
expressly reserve all rights they may have under the Credit Documents or
applicable law with respect to the Litigation Matters.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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HORIZON LINES, INC.
FIRST AMENDMENT TO CREDIT AGREEMENT
     IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly
executed on the date first above written.

          BORROWER:   HORIZON LINES, INC.,
a Delaware corporation
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
        GUARANTORS:   HORIZON LOGISTICS, LLC,
a Delaware limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            HORIZON LINES OF PUERTO RICO, INC.,
a Delaware corporation
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            HORIZON LINES OF ALASKA, LLC,
a Delaware limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            SEA-LOGIX, LLC,
a Delaware limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary

13

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              HORIZON LINES, LLC,
a Delaware limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            HORIZON SERVICES GROUP, LLC,
a Delaware limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            HAWAII STEVEDORES, INC.,
a Hawaiian corporation
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            AERO LOGISTICS, LLC, a Delaware limited
liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary
 
            HORIZON LOGISTICS HOLDINGS, LLC, a Delaware
limited liability company
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary

14

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              HORIZON LINES HOLDING CORP.,
a Delaware corporation
 
       
 
  By:   /s/ Robert S. Zuckerman
 
       
 
  Name: Robert S. Zuckerman
 
  Title: Secretary

15

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          ADMINISTRATIVE AGENT:   WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender and as Administrative Agent on behalf of the Lenders
 
       
 
  By:   /s/ Andrew G. Payne
 
       
 
  Name: Andrew G. Payne
 
  Title: Director

16

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EXHIBIT A
FORM OF
LENDER CONSENT
See Attached.

 

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LENDER CONSENT
     This Lender Consent is given pursuant to the Credit Agreement, dated as of
August 8, 2007 (as amended, restated, modified or supplemented from time to
time, the “Credit Agreement”), by and among HORIZON LINES, INC., a Delaware
corporation (the “Borrower”), those certain Subsidiaries of the Borrower party
thereto (collectively, the “Guarantors”), the lenders and other financial
institutions from time to time party thereto (the “Lenders”) and WACHOVIA BANK,
NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders (in such
capacity, the “Administrative Agent”). Capitalized terms used herein shall have
the meanings ascribed thereto in the Credit Agreement unless otherwise defined
herein.
     The undersigned hereby approves the First Amendment to Credit Agreement, to
be dated on or about [May ___], 2009, by and among the Borrower, the Guarantors
party thereto, and the Administrative Agent, on behalf of the Lenders (the
“Amendment”) and hereby authorizes the Administrative Agent to execute and
deliver the Amendment on its behalf and, by its execution below, the undersigned
agrees to be bound by the terms and conditions of the Amendment and the Credit
Agreement.
     Delivery of this Lender Consent by telecopy or other electronic means shall
be effective as an original.
     A duly authorized officer of the undersigned has executed this Lender
Consent as of the ___ day of May, 2009

             
 
        ,               as a Lender    
 
           
 
  By:                  
 
  Name:                  
 
  Title: