Exhibit 10.4

 

EXECUTION VERSION

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of July 30, 2015 (this
“Amendment”), is entered into among MATSON, INC. (the “Borrower”), the Lenders
party hereto and BANK OF AMERICA, N.A., as Agent (in such capacity, the
“Agent”).  Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Credit Agreement.

 

RECITALS

 

A.                                    The Borrower, the Lenders and the Agent
entered into that certain Credit Agreement dated as of June 4, 2012 (as amended
and modified from time to time, the “Credit Agreement”).

 

B.                                    The parties hereto have agreed to amend
the Credit Agreement as provided herein.

 

C.                                    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.

 

AGREEMENT

 

1.                                      Amendments.

 

(a)                                 Section 1.01.

 

(i)                                     The following definitions are hereby
added to Section 1.01 of the Credit Agreement in the appropriate alphabetical
order to read as follows:

 

“Collateral” means a collective reference to all assets with respect to which
Liens in favor of the Collateral Agent are purported to be granted pursuant to
and in accordance with the terms of the applicable Collateral Documents.

 

“Collateral Agent” means Bank of America in its capacity as collateral agent
under any of the Collateral Documents or any successor collateral agent.

 

“Collateral Documents” means a collective reference to the applicable Security
Agreement or Security Agreements.

 

“Collateral Election” has the meaning set forth in Section 6.09.

 

“Consolidated Net Leverage Ratio” means, as at any time of determination
thereof, the ratio of (i) the amount of Net Debt of the Borrower and
Subsidiaries on a consolidated basis as of such time to (ii) Consolidated EBITDA
for the most recently completed four fiscal quarters.

 

“Convertible Notes Indenture” shall mean that certain Indenture, dated as of
October 5, 2011, between Matson Alaska, as issuer, and U.S. Bank National
Association, as trustee and collateral agent, governing the Horizon Notes, and
all related ancillary and security documents, as such indenture and such
ancillary and security documents may be amended, supplemented, modified,
renewed, replaced and/or restated from time to time so long as the amount of the
Horizon Notes is not increased and the tenor is not extended.

 

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“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction, which countries or
territories are, as of the First Amendment Effective Date, limited to Crimea,
Cuba, Iran, North Korea, Sudan and Syria.

 

“First Amendment Effective Date” means July 30, 2015.

 

“Horizon Acquisition” means the acquisition contemplated by the Horizon
Acquisition Agreement, including without limitation the merger of a Subsidiary
of Matson Navigation with and into Matson Alaska, with Matson Alaska surviving
such merger and becoming a wholly owned subsidiary of Matson Navigation, and all
ancillary and related transactions with respect thereto.

 

“Horizon Acquisition Agreement” means the Agreement and Plan of Merger, dated as
of November 11, 2014, by and among Matson Navigation, Hogan Acquisition Inc., a
wholly owned subsidiary of Matson Navigation and Matson Alaska, as amended and
supplemented from time to time.

 

“Horizon Notes” means the 6.0% Series A Convertible Senior Secured Notes due
2017 that were issued by Matson Alaska as governed by the Convertible Notes
Indenture, in an aggregate amount not to exceed $3,000,000.

 

“Intercreditor Agreement” means that certain intercreditor and collateral agency
agreement, dated as of the First Amendment Effective Date, by and among the
Agent and the holders of the Senior Notes substantially in the form provided to
the Borrower on or prior to the First Amendment Effective Date.

 

“Matson Alaska” means Matson Alaska, Inc. (formerly known as Horizon
Lines, Inc.).

 

“Net Debt” means, at any time of determination thereof, the excess of the
principal amount of all Debt of the Borrower and its Subsidiaries on a
consolidated basis on such date over the Net Debt Cash Amount on such date.

 

“Net Debt Cash Amount” means, for any date of determination, the sum over
$15,000,000 (excluding any amount in the CCF) as of such date of (i) the
Borrower’s and its Subsidiaries’ unrestricted cash and cash equivalents (other
than any amounts in the CCF) as of such date and (ii) 60% of the amount in the
CCF as of such date.

 

“Note Purchase Agreement” means, for any date of determination, (i) the 2012
Note Purchase Agreement, (ii) the 2013 Note Purchase Agreement and (iii) any
other note purchase agreement entered into by a Loan Party on or after the First
Amendment Effective Date, in each of cases (i), (ii) and (iii) under which notes
in an aggregate principal amount of at least $30,000,000 are issued and sold and
remain outstanding as of such date of determination; provided, however, that the
term Note Purchase Agreement shall exclude (a) Title XI Debt, (b) financings to
build, modify and/or acquire Vessel(s) secured by such Vessel(s) (other than
Vessel(s) constituting Collateral) and (c) for the avoidance of doubt, any Debt
between or among the Borrower and its Subsidiaries.

 

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“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan,
which shall be substantially in the form of Exhibit I or such other form as may
be approved by the Agent (including any form on an electronic platform or
electronic transmission system as shall be approved by the Agent), appropriately
completed and signed by an Authorized Officer.

 

“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 J-1, (b) that 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 J-2 and (c) any other Security Agreement with respect to an
applicable Vessel (or contract to build a Vessel) between a Loan Party and the
Collateral Agent in substantially the form set forth as Exhibits J-1 and J-2
with respect to such applicable Vessel (or contract to build a Vessel) and
designated in writing from time to time by any Loan Party to the Collateral
Agent as a “Security Agreement” hereunder.

 

“Senior Notes” means the notes issued pursuant to the Note Purchase Agreements.

 

“2013 Note Purchase Agreement” means that certain Note Agreement, dated as of
November 5, 2013, by and among the Borrower and the purchasers party thereto.

 

(ii)                                  The following definitions in Section 1.01
of the Credit Agreement are hereby amended to read as follows:

 

“Aggregate Commitments” means, as of any date of determination, the Commitments
of all the Lenders.  The initial amount of the Aggregate Commitments in effect
on the First Amendment Effective Date is $400,000,000.  The Aggregate
Commitments may be increased or decreased from time to time as provided herein.

 

“Applicable Rate” means with respect to the commitment fee payable pursuant to
Section 2.09(a), the Eurodollar Rate, the Base Rate and the Letter of Credit
Fee, from time to time, the following percentages per annum, based upon the
Consolidated Net Leverage Ratio as set forth below:

 

Pricing
Level

 

Consolidated
Net Leverage
Ratio

 

Commitment
Fee

 

Eurodollar
Rate

 

Base
Rate

 

Letter of
Credit Fee

 

1

 

< 1. 50 to 1.0

 

0.15

%

1.00

%

0.00

%

1.00

%

2

 

> 1.50 to 1.0 but < 2.25 to 1.0

 

0.20

%

1.25

%

0.25

%

1.25

%

3

 

> 2.25 to 1.0 but < 3.00 to 1.0

 

0.25

%

1.50

%

0.50

%

1.50

%

4

 

> 3.00 to 1.0

 

0.30

%

1.75

%

0.75

%

1.75

%

 

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The Applicable Rate in effect on the First Amendment Effective Date to the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.01(c) for the fiscal quarter ending June 30,
2015 shall initially be Pricing Level 2.  Thereafter Applicable Rate shall be
determined by reference to the Consolidated Net Leverage Ratio as set forth in
the most recent Compliance Certificate received by the Agent pursuant to
Section 6.01(c).  Any increase or decrease in the Applicable Rate resulting from
a change in the Consolidated Net Leverage Ratio shall become effective as of the
first Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.01(c); provided, however, that if such
Compliance Certificate is not delivered when due in accordance with such
Section, then, upon the request of the Required Lenders, Pricing Level 4 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered and shall remain in effect until
the date on which such Compliance Certificate is delivered in accordance with
Section 6.01(c), whereupon the Applicable Rate shall be adjusted based upon the
calculation of the Consolidated Net Leverage Ratio contained in such Compliance
Certificate.

 

“Authorized Officer” means, with respect to any Loan Party, any officer of such
Loan Party designated as an “Authorized Officer” for the purpose of this
Agreement in a certificate executed by one of such Loan Party’s then existing
Authorized Officers (as previously identified to the Agent) and any other
officer or employee of the applicable Loan Party designated in or pursuant to an
agreement between the applicable Loan Party and the Agent.  Any action taken
under this Agreement or any other Loan Document on behalf of a Loan Party by any
individual who on or after the Closing Date shall have been an Authorized
Officer of such Loan Party and whom the Agent or any of the Lenders in good
faith believes to be an Authorized Officer of such Loan Party at the time of
such action shall be binding on such Loan Party even though such individual
shall have ceased to be an Authorized Officer of such Loan Party, unless the
Borrower or such Loan Party shall have provided the Agent with a certificate
executed by one of such Loan Party’s then existing Authorized Officers (as
previously identified to the Agent) indicating that such individual is no longer
an “Authorized Officer.”

 

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A or such other form as may be approved by
the Agent (including any form on an electronic platform or electronic
transmission system as shall be approved by the Agent), appropriately completed
and signed by an Authorized Officer of the Borrower.

 

“Consolidated EBITDA” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) 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

 

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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)), (vi) one-time expenses, including transaction costs, related to the
Horizon Acquisition to the extent such expenses and costs are incurred within 12
months of the consummation of the Horizon Acquisition, provided that the
aggregate amount of expenses and costs added back to Consolidated EBITDA
pursuant to this clause (vi) shall not exceed $50,000,000, and (vii) non-cash
stock-based compensation.  For purposes of calculating Consolidated EBITDA for
any period of four consecutive quarters, if during such period the Borrower or
any Subsidiary shall have consummated (i) an Acquisition of a Person that upon
such consummation 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, 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
audited financial statements or other financial statements reasonably
satisfactory to the Required Lenders 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,
Consolidated EBITDA for such period shall be calculated after giving pro forma
effect thereto as if such transaction occurred on the first day of the such
period, so long as, in each case, such pro forma calculations are (x) made in
accordance with Regulation S-X or (y) are otherwise acceptable to the Required
Lenders.  Notwithstanding the foregoing, for purposes of calculating
Consolidated EBITDA for the fiscal quarters ended September 30, 2014,
December 31, 2014, March 31, 2015 and the portion of the June 30, 2015 fiscal
quarter ended May 29, 2015, Consolidated EBITDA of Matson Alaska, Inc. and its
Subsidiaries shall be deemed to be $24,865,661, $9,687,861, $14,257,792 and
$13,333,025, respectively.

 

“Debt” means, as to any Person at the time of determination thereof without
duplication, (a) any indebtedness of such Person (i) for borrowed money,
including commercial paper and revolving credit lines, (ii) evidenced by bonds,
debentures or notes or otherwise representing extensions of credit, whether or
not representing obligations for borrowed money (except trade accounts payable
arising in the ordinary course of business) or (iii) for the payment of the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, regardless of when such liability or
other obligation is due and payable, (b) Capitalized Lease Obligations of such
Person, (c) direct or contingent obligations under standby letters of credit
(and substantially similar instruments such as bank guaranties), (d) Guarantees,
assumptions and endorsements by such Person (other than endorsements of
negotiable instruments for collection in the ordinary course of business) of
Debt of another Person of the types described in clauses (a), (b) and
(c) hereof, and (e) Debt of another Person of the types described in clauses
(a), (b) and (c) hereof, that is secured by Liens on the property or other
assets of such Person.  Notwithstanding the forgoing, “Debt” shall not include
(i) to the extent not exceeding $15,000,000 at any time outstanding, unsecured
contingent

 

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reimbursement obligations under standby letters of credit (and substantially
similar instruments such as bank guaranties) or (ii) a Guarantee of Matson
Navigation’s trade accounts receivable purchased or held by the CCF.

 

“Eurodollar Rate” means:

 

(a)                                 for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered
Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the
Agent, as published by Bloomberg (or such other commercially available source
providing such quotations as may be designated by the Agent from time to time)
(in such case, the “LIBOR Rate”) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period; and

 

(b)                                 for any interest calculation with respect to
a Base Rate Loan on any date, the rate per annum equal to the LIBOR Rate, at
approximately 11:00 a.m., London time determined two Business Days prior to such
date for Dollar deposits with a term of one month commencing that day;

 

provided that (i) to the extent a comparable or successor rate is approved by
the Agent in connection herewith, the approved rate shall be applied in a manner
consistent with market practice; provided, further that to the extent such
market practice is not administratively feasible for the Agent, such approved
rate shall be applied as otherwise reasonably determined by the Agent and
(ii) if the Eurodollar Rate shall be less than zero, such rate shall be deemed
zero for purposes of this Agreement.

 

“Excluded Subsidiary” means (a) each CFC and (b) each U.S. Foreign Holdco;
provided, that in each case, such Person has not issued or guaranteed any notes
issued pursuant to the Note Purchase Agreements.

 

“Existing Letters of Credit” means those letters of credit set forth on
Schedule 1.01 as of the First Amendment Effective Date.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (or
any amended or successor version that is substantively comparable and not
materially more onerous to comply with) and any current or future regulations or
official interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code.

 

“Fee Letter” means the administrative agent fee letter agreement, dated July 7,
2015, among the Borrower, the Agent and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.

 

“Interest Period” means, as to each Eurodollar Loan, the period commencing on
the date such Eurodollar Loan is disbursed or converted to or continued as a
Eurodollar Loan and ending on the date one week or one, two,

 

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three or six months thereafter, as selected by the Borrower in its Committed
Loan Notice; provided that:

 

(i)                                     any Interest Period that would otherwise
end on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

 

(ii)                                  any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(iii)                               no Interest Period shall extend beyond the
Maturity Date.

 

“L/C Issuer” means, as the context requires, (a) First Hawaiian Bank in its
capacity as issuer of Letters of Credit hereunder (including certain Existing
Letters of Credit), (b) Bank of America, N.A.  in its capacity as issuer of
Letters of Credit hereunder (including certain Existing Letters of Credit),
(c) Wells Fargo Bank, National Association in its capacity as issuer of certain
Existing Letters of Credit hereunder, (d) such other Lender selected by the
Borrower pursuant to Section 2.03(l) from time to time to issue such Letter of
Credit and (e) any successor issuer of Letters of Credit hereunder.  The term
“L/C Issuer” when used with respect to a Letter of Credit or the L/C Obligations
relating to a Letter of Credit shall refer to the L/C Issuer that issued such
Letter of Credit.

 

“Maturity Date” means July 30, 2020.  If such date is not a Business Day, the
Maturity Date shall be the next preceding Business Day.

 

“Priority Debt” means, at any time of determination thereof and without
duplication,  (a) Debt of the Borrower or Matson Navigation secured by any Lien
(including, without limitation, all Title XI Debt and all Debt secured by marine
assets, in each case whether full recourse or limited recourse) and (b) all Debt
secured by any Lien (including, without limitation, all Title XI Debt and all
Debt secured by a Lien on marine assets, in each case whether full recourse or
limited recourse) and, without duplication, all unsecured Debt of Subsidiaries
of the Borrower (other than unsecured Debt of Guarantors); provided, however,
that Priority Debt shall not include (i) Debt owing from any Subsidiary to the
Borrower or any other Subsidiary, (ii) any of the Obligations, (iii) any of the
obligations of the Borrower or any Subsidiary under the Note Purchase Agreements
and Guarantees in respect thereof, so long as the Obligations are secured on an
equal and ratable basis pursuant to Section 6.03(ii), (iv) Debt secured solely
by Collateral, or (v) the Horizon Notes, so long as the aggregate principal
amount outstanding under the Horizon Notes is less than $3,000,000; provided
further, for purposes of clarification, the obligations of the Borrower and its
Subsidiaries under any Note Purchase Agreements and Guarantees in respect
thereof shall not constitute Priority Debt solely as a result of such
obligations being secured (x) solely by Collateral and/or (y) being secured

 

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(without the Obligations being equally and ratably secured) by cash collateral
in an amount for each such Note Purchase Agreement not to exceed the amount of
Cash Collateral at such time being provided by the Borrower and its Subsidiaries
pursuant to Section 2.15.

 

“Sanction(s)” means any international economic sanction or trade embargo
administered or enforced by the United States Government, including OFAC, or
other relevant sanctions authority applicable to the Borrower and its
Subsidiaries.

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B or such other form as approved by the Agent (including any form on an
electronic platform or electronic transmission system as shall be approved by
the Agent pursuant), appropriately completed and signed by an Authorized Officer
of the Borrower.

 

(iii)                               The following definitions in Section 1.01 of
the Credit Agreement are hereby deleted: (i) “Existing Note Purchase Agreement
Lien,” and (ii) “2005 Note Purchase Agreement.”

 

(b)                                 Section 2.02.  Section 2.02(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

(a)                                 Each Committed Borrowing, each conversion of
Committed Loans from one Type to the other, and each continuation of Eurodollar
Loans shall be made upon the Borrower’s irrevocable notice to the Agent, which
may be given by: (A) telephone or (B) a Committed Loan Notice; provided that any
telephonic notice must be confirmed immediately by delivery to the Agent of a
Committed Loan Notice.  Each such notice must be received by the Agent not later
than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of Eurodollar Loans or any conversion to or continuation of Eurodollar
Loans or of any conversion of Eurodollar Loans to Base Rate Loans and (ii) one
Business Day prior to the requested date of any Borrowing of Base Rate Loans. 
Each Borrowing of, conversion to or continuation of Eurodollar Loans shall be in
a principal amount of $1,000,000 or a whole multiple of $100,000 in excess
thereof.  Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or
a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Committed Borrowing, a conversion of Committed Loans from one Type
to the other, or a continuation of Eurodollar Loans, (ii) the requested date of
the Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Committed Loans to be borrowed,
converted or continued, (iv) the Type of Committed Loans to be borrowed or to
which existing Committed Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto.  If the Borrower fails to
specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation of a
Eurodollar Loan, then the applicable Committed Loan shall be made as, or
converted to, Base Rate Loans, unless such Committed Loan was a Eurodollar Loan,
in which case such Committed Loan shall be continued as a Eurodollar Loan with
an Interest Period of one month.  Any such automatic conversion to a Base Rate
Loan and any such continuation of a Eurodollar

 

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Loan, in either case, shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Loans.  If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Loans in any such Committed Loan Notice, but the Borrower fails to specify an
Interest Period for such Committed Loan or continuation of a Eurodollar Loan, it
will be deemed to have specified an Interest Period of one month.

 

(c)                                  Section 2.03.  New clauses (l) and (m) are
hereby added to Section 2.03 of the Credit Agreement to read as follows:

 

(l)                                     Additional L/C Issuers.  The Borrower
may from time to time, upon not less than five (5) Business Days’ notice from
the Borrower to the Agent (or such shorter period of time as may be agreed by
the Agent in its sole discretion), designate a Lender hereunder as an L/C Issuer
(upon obtaining such Lender’s prior consent thereto).  The Agent will promptly
notify the Lenders of any designation of any such additional L/C Issuers by the
Borrower.  Upon (i) notification to the Lenders of any additional L/C Issuer by
the Agent and (ii) delivery by the Borrower of such contact and other
information regarding such L/C Issuer as the Agent shall reasonably request,
such Lender shall become an L/C Issuer for all purposes of this Agreement, and
references to “L/C Issuer” shall mean and include such Lender in its capacity as
an L/C Issuer.

 

(m)                             L/C Issuer Reports to the Agent.  Unless
otherwise agreed by the Agent, each L/C Issuer shall, in addition to its
notification obligations set forth elsewhere in this Section, provide the Agent,
the following:

 

(i)                                     reasonably prior to the time that such
L/C Issuer issues, amends, renews, increases or extends a Letter of Credit, the
date of such issuance, amendment, renewal, increase or extension and the stated
amount of the applicable Letters of Credit after giving effect to such issuance,
amendment, renewal or extension (and whether the amounts thereof shall have
changed);

 

(ii)                                  on each Business Day on which such L/C
Issuer makes a payment pursuant to a Letter of Credit, the date and amount of
such payment;

 

(iii)                               on any Business Day on which the Borrower
fails to reimburse a payment made pursuant to a Letter of Credit required to be
reimbursed to such L/C Issuer on such day, the date of such failure and the
amount of such payment;

 

(iv)                              on any other Business Day, such other
information as the Agent shall reasonably request as to the Letters of Credit
issued by such L/C Issuer; and

 

(v)                                 for so long as any Letter of Credit issued
by an L/C Issuer is outstanding, such L/C Issuer shall deliver to the Agent
(A) on the last Business Day of each calendar month, and (B) on each date that
(1) an L/C Credit Extension occurs or (2) there is any expiration, cancellation
and/or disbursement, in each case, with respect to any such Letter of Credit, a
such information as the Agent shall reasonably request, including, the letter of
credit number, maximum face amount, current face amount, beneficiary name,
issuance date, expiry date and whether such Letter of Credit is may be
automatically renewed or extended.

 

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The Agent shall maintain a record of all outstanding Letters of Credit based
upon information provided by the Borrower and the L/C Issuers pursuant to this
Section 2.03(m), and such record of the Agent shall, absent manifest error, be
deemed a correct and conclusive record of all Letters of Credit outstanding from
time to time hereunder.  Notwithstanding the foregoing, if and to the extent the
Agent determines that there are one or more discrepancies between information
provided by the Borrower and any L/C Issuer hereunder, the Agent will notify the
Borrower and such L/C Issuer thereof and the Borrower and such L/C Issuer shall
endeavor to reconcile any such discrepancy.

 

(d)                                 Section 2.04.  Section 2.04(b) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

(b)                                 Borrowing Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line
Lender and the Agent, which may be given by:  (A) telephone or (B) a Swing Line
Loan Notice; provided that any telephonic notice must be confirmed immediately
by delivery to the Swing Line Lender and the Agent of a Swing Line Loan Notice. 
Each such notice must be received by the Swing Line Lender and the Agent not
later than 10:00 a.m. on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $100,000, and (ii) the
requested borrowing date, which shall be a Business Day.  Promptly after receipt
by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing
Line Lender will confirm with the Agent (by telephone or in writing) that the
Agent has also received such Swing Line Loan Notice and, if not, the Swing Line
Lender will notify the Agent (by telephone or in writing) of the contents
thereof.  Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Agent (including at the request of any Lender) prior to
11:00 a.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Article IV is
not then satisfied, then, subject to the terms and conditions hereof, the Swing
Line Lender will, not later than 12:00 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrower.

 

(e)                                  Section 2.05.

 

(i)                                     The first sentence in Section 2.05(a) is
hereby amended and restated in its entirety to read as follows:

 

The Borrower may, upon delivery of a Notice of Loan Prepayment to the Agent, at
any time or from time to time voluntarily prepay Committed Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Agent not later than 11:00 a.m. (A) three Business Days prior to any date
of prepayment of Eurodollar Loans and (B) on the date of prepayment of Base Rate
Loans; (ii) any prepayment of Eurodollar Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $100,000 in excess thereof; and (iii) any
prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding.

 

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(ii)                                  The first sentence in Section 2.05(b) is
hereby amended and restated in its entirety to read as follows:

 

The Borrower may, upon delivery of a Notice of Loan Prepayment to the Swing Line
Lender (with a copy to the Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the Agent not
later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment
shall be in a minimum principal amount of $100,000.  Each such notice shall
specify the date and amount of such prepayment.

 

(f)                                   Section 2.10.  Section 2.10(b) of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

(b)                                 If, as a result of any restatement of or
other adjustment to the financial statements of the Borrower or for any other
reason, the Borrower or the Lenders determine that (i) the Consolidated Net
Leverage Ratio as calculated by the Borrower as of any applicable date was
inaccurate and (ii) a proper calculation of the Consolidated Net Leverage Ratio
would have resulted in higher pricing for such period, the Borrower shall
immediately and retroactively be obligated to pay to the Agent for the account
of the applicable Lenders or the L/C Issuer, as the case may be, promptly on
demand by the Agent (or, after the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, automatically and without further action by the Agent, any Lender
or the L/C Issuer), an amount equal to the excess of the amount of interest and
fees that should have been paid for such period over the amount of interest and
fees actually paid for such period.  This paragraph shall not limit the rights
of the Agent, any Lender or the L/C Issuer, as the case may be, under
Section 2.03(c)(iii), 2.03(i) or 2.08(b) or under Article VIII.  The Borrower’s
obligations under this paragraph shall survive the termination of the Aggregate
Commitments and the repayment of all other Obligations hereunder.

 

(g)                                  Section 2.14.  The introductory paragraph
of Section 2.14 and Section 2.14(a) of the Credit Agreement are hereby amended
and restated in their entirety to read as follows:

 

The Borrower shall have the right, upon at least five Business Days’ prior
written notice to the Agent, to increase the Aggregate Commitments by up to
$150,000,000 in the aggregate in one or more increases, at any time prior to the
date that is three months prior to the Maturity Date, subject, however, in any
such case, to satisfaction of the following conditions precedent:

 

(a)                                 the Aggregate Commitments shall not exceed
$550,000,000 without the consent of the Required Lenders;

 

(h)                                 Section 5.16.  Section 5.16 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

5.16                        Sanctions and Anti-Corruption Laws.

 

(a)                                 No Loan Party, no Subsidiary nor, to the
knowledge of senior management of any Loan Party, any Related Party is an
individual or entity that is, or is owned or controlled by any individual or
entity that is (i) currently the subject or target of any Sanctions,
(ii) included on OFAC’s List of Specially Designated Nationals, or any similar
list enforced by any other relevant sanctions authority applicable to the
Borrower and its Subsidiaries or (iii) located, organized or resident in a
Designated Jurisdiction.

 

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(b)                                 Neither the Borrower nor any of its
Subsidiaries has been charged with, or convicted of bribery or any other
anti-corruption related activity under any law or regulation applicable to
bribery or any other anti-corruption related activity in a U.S. or any non-U.S.
country or jurisdiction, including but not limited to the United States Foreign
Corrupt Practices Act of 1977 (“Anti-Corruption Laws”), and the Borrower has
established and maintained procedures and controls which it reasonably believes
are adequate to promote and achieve compliance by the Borrower and its
Subsidiaries in all material respects with all applicable Anti-Corruption Laws.

 

(i)                                     Section 6.03.  Section 6.03 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

6.03. Covenant to Secure Obligations Equally and Ratably.  (i) If the Borrower
or any of its Domestic Subsidiaries shall create, assume or otherwise incur any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, other than Liens permitted by the provisions of Section 7.02
(including in such permitted Liens, without limitation, Liens securing Title XI
Debt to the extent such Title XI Debt is permitted Priority Debt) or (ii) if the
Borrower or any of its Subsidiaries shall create, assume or otherwise incur any
Lien upon any of its property or assets, whether now owned or hereafter acquired
to secure its obligations under any Note Purchase Agreement (other than (x) the
Collateral and/or (y) cash collateral in an amount not to exceed, for each such
Note Purchase Agreement, the amount of Cash Collateral being provided by the
Borrower and its Subsidiaries pursuant to Section 2.15), then in either case,
the Borrower will make, or will cause its Subsidiaries to make, effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured pursuant to an agreement or agreements (including
security agreements and similar collateral documents and an intercreditor
agreement) reasonably acceptable to the Required Lenders.

 

(j)                                    Section 6.06.  Section 6.06 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

6.06                        Use of Proceeds.  The Borrower shall, and shall
cause its Subsidiaries to, use the proceeds of the Credit Extensions (a) to
finance working capital, capital expenditures (including the Horizon Acquisition
and other Acquisitions) and other lawful corporate purposes, (b) to refinance
certain existing indebtedness of Matson Navigation, (c) for support of
commercial paper issued by the Borrower, and (d) to pay fees and expenses
incurred in connection with this Agreement and the Horizon Acquisition; provided
that in no event shall the proceeds of any Credit Extension be used in
contravention of any law or of any Loan Document.

 

(k)                                 Section 6.08.  Section 6.08 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

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6.08                        Guarantors.

 

(a)                                 Together with each delivery of financial
statements required by Section 6.01(a) and 6.01(b), the Borrower shall notify
the Agent if any wholly-owned Subsidiary has become a Material Domestic
Subsidiary after the Initial Funding Date.  Within 30 days after such
notification (or such longer period as determined by Agent in its sole
discretion), the Borrower shall cause such wholly-owned Material Domestic
Subsidiary to (i) become a Guarantor by executing and delivering to the Agent a
joinder to the Guaranty, and (ii) at the request of the Agent, deliver to the
Agent such organization documents, resolutions and favorable opinions of
counsel, all in form, content and scope similar to those delivered on the
Closing Date or otherwise reasonably satisfactory to the Agent; provided, that,
in the case of the Subsidiaries of the Borrower acquired pursuant to the Horizon
Acquisition, the provisions of this Section 6.08(a) shall not be required to be
satisfied until September 15, 2015 (or such later date as determined by the
Agent in its sole discretion).

 

(b)                                 If a Guarantor is a party to any transaction
of merger, consolidation or other combination permitted by Section 7.04(b) or
7.04(c), the continuing or surviving Person of such transaction shall, within 30
days after the consummation of such transaction (or such longer period as
determined by Agent in its sole discretion), (i) become a Guarantor by executing
and delivering to the Agent a joinder to the Guaranty and (ii) at the request of
the Agent, deliver to the Agent such organization documents, resolutions and
favorable opinions of counsel, all in form, content and scope similar to those
delivered on the Closing Date or otherwise reasonably satisfactory to the Agent.

 

(c)                                  Notwithstanding the forgoing, concurrently
with such time as any Person becomes a guarantor or other obligor under any Note
Purchase Agreement, the Borrower shall cause such Person to (i) become a
Guarantor by executing and delivering to the Agent a joinder to the Guaranty,
and (ii) at the request of the Agent, deliver to the Agent such organization
documents, resolutions and favorable opinions of counsel, all in form, content
and scope similar to those delivered on the Closing Date or otherwise reasonably
satisfactory to the Agent.

 

(d)                                 So long as no Default exists, if a Guarantor
ceases to be a Material Domestic Subsidiary, then upon the written request of
the Borrower, the Agent shall release such Guarantor from its obligations under
the Guaranty pursuant to Section 9.09; provided that the Agent shall not release
such Guarantor unless such Guarantor is not at such time (or concurrently with
such release by the Agent will cease to be) a guarantor or obligor under any
Note Purchase Agreement.

 

(l)                                     Section 6.09.  New Section 6.09 is
hereby added to the Credit Agreement to read as follows:

 

6.09                        Collateral.  At any time, at the written election of
the Borrower (the “Collateral Election”), the Loan Parties shall deliver to the
Agent (i) all Collateral Documents and such other document as are necessary to
perfect the Agent’s Lien in the applicable Collateral and (ii) resolutions in
form and substance satisfactory to the Agent; provided that at any time the Loan
Parties have granted a Lien on the Collateral to the holders of the Senior
Notes, the Borrower shall be required to deliver such documentation as is
necessary to perfect to the Agent’s Lien on such Collateral on a pari passu
basis.  The Borrower may make the Collateral Election at any time with respect
to any Security Agreement.  In addition, from time to time on or after the First
Amendment Effective Date the Borrower may enter into additional note purchase
and/or credit agreements with

 

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lenders which are not party to the Intercreditor Agreement as of the First
Amendment Effective Date for purpose of such additional note purchase and/or
credit agreements, and the Borrower may designate, at the written election of
the Borrower delivered to the Agent, such lenders to become parties to the
Intercreditor Agreement.  Notwithstanding the foregoing, so long as no
(i) Default has occurred or is continuing and (ii) the Borrower has revoked its
applicable collateral election under the Senior Notes, the Borrower may revoke
the Collateral Election with respect to the applicable Security
Agreement(s) and, at the expense of the Borrower, the Agent shall deliver such
releases as are necessary to evidence the termination of the applicable Liens.

 

(m)                             Section 7.02(f).  Section 7.02(f) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

(f)                                   other Liens securing Debt not otherwise
permitted by clauses (a) through (e) above, inclusive; provided that the
aggregate amount of all Priority Debt does not, at any time, exceed the level
prohibited by Section 7.01(c), provided that, notwithstanding the foregoing, the
Borrower shall not, and shall not permit any Subsidiary to, create or permit to
exist any Lien on any property securing Debt outstanding or issued under the
Note Purchase Agreements (other than (x) Collateral and/or (y) cash collateral
in an amount, for each such Note Purchase Agreement, not to exceed the amount of
Cash Collateral being provided by the Borrower and its Subsidiaries pursuant to
Section 2.15) unless and until the Obligations shall be secured equally and
ratably with such Debt pursuant to an agreement or agreements (including
security agreements and similar collateral documents and an intercreditor
agreement) reasonably acceptable to the Required Lenders;

 

(n)                                 Section 7.02.  Section 7.02 of the Credit
Agreement is hereby amended to replace the “.” at the end of clause (h) with “;”
and to add new clauses (i), (j) and (k) to read as follows:

 

(i)                                     any Lien existing on any property or
assets prior to the Horizon Acquisition that secures the Horizon Notes; provided
that (i) such Lien shall not apply to any other property or assets of Matson
Alaska and its Subsidiaries and (ii) such Lien shall secure only those
obligations that it secures on the date of the Horizon Acquisition, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

 

(j)                                    any Lien pursuant to any Loan Document or
the Collateral Documents; and

 

(k)                                 any Lien on the Collateral securing
obligations under the Note Purchase Agreements.

 

(o)                                 Section 7.03.  Section 7.03(b) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

(b)                                 own, purchase or acquire stock, obligations
or securities of a Subsidiary, and, (i) so long as the Borrower is in compliance
with the financial covenants set forth in Section 7.01 on a pro forma basis
immediately after giving effect to such transaction, consummate Acquisitions and
(ii) consummate the Horizon Acquisition;

 

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(p)                                 Section 7.05.  Section 7.05 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

7.05                        Sale of Capital Assets.  The Borrower shall not, and
shall not permit any Subsidiary to, sell, lease, transfer or otherwise dispose
of any Capital Asset to any Person, except that (i) any Loan Party may sell or
otherwise dispose of any Capital Asset to any other Loan Party, (ii) any
Subsidiary that is not a Loan Party may sell or otherwise dispose of any Capital
Asset to the Borrower or any other Subsidiary and (iii) during any rolling
twelve-month period, the Borrower 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,
2014, so long as (A) such Capital Assets sold contributed less than 25% of the
Consolidated Net Income of the Borrower 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, 2014, 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, 2014; provided, that this covenant shall not apply to any Lien
permitted hereunder.

 

(q)                                 Sections 7.09 and 7.10.  New Sections 7.09
and 7.10 of the Credit Agreement are hereby added to read as follows:

 

7.09                        Sanctions.  Directly, or knowingly indirectly, use
the proceeds of any Credit Extension (a) in connection with any investment in,
or any transaction or dealings with, any Person that, at the time of such
funding, is the subject of Sanctions in a manner that will result in a violation
of Sanctions or (b) in any other manner in violation of Sanctions.

 

7.10                        Anti-Corruption Laws.  Directly, or knowingly
indirectly, use the proceeds of any Credit Extension for any purpose which would
breach Anti-Corruption Laws in any material respect.

 

(r)                                    Section 8.01.  Section 8.01(b) of the
Credit Agreement is hereby amended by deleting the reference to “7.09” therein
and substituting a reference to “7.10” in lieu thereof.

 

(s)                                   Section 8.01.  Section 8.01(e) of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

(e)                                  Cross-Default.  (i) an Event of Default (as
defined in any Note Purchase Agreement) has occurred and is continuing under
such Note Purchase Agreement; or (ii) the Borrower or any Material Subsidiary
defaults in any payment of principal of, or premium or interest on, any Debt
(other than the Obligations) beyond any period of grace provided with respect
thereto, or the Borrower or any Material Subsidiary fails to perform or observe
any other agreement, term or condition contained in any agreement relating to
any such Debt (or any other event under any such agreement occurs and is
continuing) and the effect of such default or other failure or event is to
cause, or to permit the holder or holders of such Debt (or a trustee on behalf
of such holder or holders) to cause, such Debt to become due (or to be required
to be repurchased by the Borrower or any Subsidiary) prior to any stated
maturity; provided that the aggregate amount of all Debt as to which such a
default or other failure or event shall occur and be continuing exceeds
$30,000,000; or

 

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(t)                                    Section 8.03.  Section 8.03 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

8.03                        Application of Funds.  After the exercise of
remedies provided for in Section 8.02 (or after the Loans have automatically
become immediately due and payable and the L/C Obligations have automatically
been required to be Cash Collateralized as set forth in the proviso to
Section 8.02), any amounts received on account of the Obligations, subject to
the terms of the Intercreditor Agreement (if applicable), shall, subject to the
provisions of Sections 2.15 and 2.16, be applied by the Agent in the following
order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Agent and amounts payable under Article III)
payable to the Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them;

 

Fifth, to the Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit to the extent not otherwise Cash Collateralized by the
Borrower pursuant to Sections 2.03 and 2.15; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by law.

 

Subject to Sections 2.03(c) and 2.15, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.

 

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(u)                                 Section 9.01.  The following paragraph is
hereby added to the end of Section 9.01 to read as follows:

 

Each of the Lenders (in its capacities as a Lender and Swing Line Lender (if
applicable)) and the L/C Issuer (a) irrevocably appoints and authorizes Bank of
America to act on its behalf as Collateral Agent under the Intercreditor
Agreement and (b) consents to and approves the terms of the Intercreditor
Agreement.  By execution hereof, the Lenders acknowledge the terms of the
Intercreditor Agreement and agree to be bound by the terms thereof and further
authorize and direct the Agent and the Collateral Agent to enter into the
Intercreditor Agreement on behalf of all the Lenders, to perform their
obligations thereunder and to deliver and accept notices thereunder on behalf of
the Lenders (and the Agent shall promptly provide copies of such notices to the
Lenders).  In this connection, the Agent, as “Collateral Agent” and any
co-agents, sub-agents and attorneys-in-fact appointed by the Agent pursuant to
Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or
any portion thereof) granted under the Collateral Documents, or for exercising
any rights and remedies thereunder at the direction of the Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article X
(including Section 11.04(c), as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.  Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Agent and
Collateral Agent are hereby irrevocably authorized and directed by each Lender
to take any action requested by the Borrower having the effect of releasing any
Collateral, subject to Section 6.09, (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 10.01 or (ii) pursuant to the terms
of the applicable Collateral Documents.

 

(v)                                 Section 9.03.  The final paragraph of
Section 9.03 of the Credit Agreement is hereby amended to read as follows:

 

The Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, or the creation, perfection or priority
of any Lien purported to be created by the Collateral Documents, (v) the value
or the sufficiency of any Collateral, or (vi) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Agent.

 

(w)                               Section 10.04.  Sections 10.04(a) and (b) of
the Credit Agreement are hereby amended to read as follows:

 

(a)                                 Costs and Expenses.  The Borrower shall pay
(i) except as provided in Section 10.06(b)(iv), all reasonable out-of-pocket
expenses incurred by the Agent and its Affiliates (including the reasonable
fees, charges and disbursements of counsel for the Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement, the other
Loan Documents, the Collateral Documents and the Intercreditor Agreement or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all

 

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reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with
the issuance, amendment, renewal or extension of any Letter of Credit or any
demand for payment thereunder and (iii) all out-of-pocket expenses incurred by
the Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Agent, any Lender or the L/C Issuer), in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement, the other Loan Documents, the Collateral Documents and the
Intercreditor Agreement, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 Indemnification by the Borrower.  The
Borrower shall indemnify the Agent (and any sub-agent thereof), each Lender and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any Person (including the Borrower or any other Loan Party) other than such
Indemnitee and its Related Parties arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document, the Collateral Documents, the Intercreditor Agreement or any agreement
or instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder, the consummation
of the transactions contemplated hereby or thereby, or, in the case of the Agent
(and any sub-agent thereof) and its Related Parties only, the administration of
this Agreement, the other Loan Documents, the Collateral Documents and the
Intercreditor Agreement, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, (y) result from a claim
brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction or (z) arise solely
from claims of any Indemnitee against one or more other Indemnities that do not
involve or have not resulted from (A) an act or omission of an Indemnitee in its
capacity as Agent, L/C Issuer, arranger or book manager and (B) an act or
omission (or an alleged act or omission) by the Borrower or any Subsidiary. 
Without limiting the provisions of Section 3.01(c), this Section 10.04(b) shall
not apply with respect to Taxes other than any Taxes that represent losses,
claims, damages, etc. arising from any non-Tax claim.

 

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(x)                                 Section 10.06.  The first sentence in the
last paragraph in Section 10.06(b) of the Credit Agreement is hereby amended to
read as follows:

 

Subject to acceptance and recording thereof by the Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and the Intercreditor Agreement (if applicable) and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement and the Intercreditor Agreement (if
applicable), and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement and the Intercreditor Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances
occurring prior to the effective date of such assignment; provided, that except
to the extent otherwise expressly agreed by the affected parties, no assignment
by a Defaulting Lender will constitute a waiver or release of any claim of any
party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(y)                                 Section 10.10.  Section 10.10 of the Credit
Agreement is hereby amended to read as follows:

 

10.10                 Counterparts; Integration; Effectiveness.

 

This Agreement and each of the other Loan Documents may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement, the other Loan Documents
and any separate letter agreements with respect to fees payable to the Agent or
the L/C Issuers constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an executed counterpart of a signature
page of this Agreement by fax transmission or e-mail transmission (e.g., “pdf”
or “tif”) shall be effective as delivery of a manually executed counterpart of
this Agreement or such other Loan Document or certificate.  Without limiting the
foregoing, to the extent a manually executed counterpart is not specifically
required to be delivered under the terms of any Loan Document, upon the request
of any party, such fax transmission or e-mail transmission shall be promptly
followed by such manually executed counterpart.

 

(z)                                  Section 10.17.  Section 10.17 of the Credit
Agreement is hereby amended to read as follows:

 

10.17                 Electronic Execution of Assignments and Certain Other
Documents.

 

The words “execute,” “execution,” “signed,” “signature,” and words of like
import in or related to any document to be signed in connection with this
Agreement, any other document executed in connection herewith and the
transactions contemplated

 

19

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hereby (including without limitation Assignment and Assumptions, amendments or
other modifications, Loan Notices, Swing Line Loan Notices, waivers and
consents) shall be deemed to include electronic signatures, the electronic
matching of assignment terms and contract formations on electronic platforms
approved by the Agent, or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable Law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act; provided that notwithstanding anything contained herein to the contrary the
Agent is under no obligation to agree to accept electronic signatures in any
form or in any format unless expressly agreed to by the Agent pursuant to
procedures approved by it; provided further without limiting the foregoing, upon
the request of any party, any electronic signature shall be promptly followed by
such manually executed counterpart.

 

(aa)                          Existing Letters of Credit.  Schedule 1.01 to the
Credit Agreement is hereby deleted in its entirety and replaced with Schedule
1.01 attached hereto.

 

(bb)                          Commitments and Applicable Percentages.  Schedule
2.01 to the Credit Agreement is hereby deleted in its entirety and is replaced
with Schedule 2.01 attached hereto.

 

(cc)                            Form of Compliance Certificate.  Exhibit F to
the Credit Agreement is hereby deleted in its entirety and is replaced with
Exhibit F attached hereto.

 

(dd)                          Form of Notice of Loan Prepayment.  A new
Exhibit I is hereby added to the Credit Agreement in the form of Exhibit I
attached hereto.

 

(ee)                            Form of Security Agreement.  New Exhibits J-1
and J-2 are hereby added to the Credit Agreement in the form of Exhibits J-1 and
J-2 attached hereto.

 

(ff)                              Compliance Certificate.  The Lenders hereby
agree that for purposes of calculating the financial covenants set forth in
Section 7.01 of the Credit Agreement for the fiscal quarter ending June 30,
2015, this Amendment shall be deemed to be effective as of June 30, 2015.

 

2.                                      Effectiveness; Conditions Precedent. 
This Amendment shall be effective upon satisfaction of the following conditions
precedent:

 

(a)                                 Receipt by the Agent of this Amendment duly
executed by the Loan Parties and the Lenders;

 

(b)                                 Receipt by the Agent of (i) a certificate of
a Responsible Officer of the Borrower, in form and substance satisfactory to the
Agent attaching a certified copy of resolutions of the Loan Parties approving
and adopting this Amendment and authorizing the execution and delivery of this
Amendment and (ii) such documents and certifications as the Agent may reasonably
require to evidence that the Loan Parties are in good standing in their
jurisdiction of incorporation;

 

(c)                                  Receipt by the Agent of favorable opinions
of Gibson, Dunn & Crutcher LLP and Hawaii counsel reasonably acceptable to the
Agent, addressed to the Agent and each Lender, as to such matters concerning the
Loan Parties and this Amendment as the Lenders may reasonably request;

 

20

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(d)                                 Receipt by the Agent of copies of amendments
to the 2012 Note Purchase Agreement and the 2013 Note Purchase Agreement in form
and substance reasonably satisfactory to the Agent, and a copy of any Note
Purchase Agreement to be executed on the First Amendment Effective Date in form
and substance reasonably satisfactory to Agent;

 

(e)                                  Receipt by the Agent of the fully executed
Intercreditor Agreement;

 

(f)                                   Payment by the Loan Parties to the Agent
and the Arranger, all fees due and payable to the Agent and the Arranger on the
date hereof; and

 

(g)                                  Payment by the Loan Parties of the
reasonable and documented out-of-pocket costs and expenses of the Agent relating
to this Amendment, including without limitation, the fees and expenses of
Moore & Van Allen PLLC.

 

3.                                      Ratification of Credit Agreement.  Each
of the Borrower and the Guarantors acknowledges and consents to the terms set
forth herein and reaffirms its obligations under the Loan Documents, as amended
hereby.  This Amendment is a Loan Document.

 

4.                                      Authority/Enforceability.  The Borrower
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 the Credit Agreement, as amended hereby,
constitutes such Person’s legal, valid and binding obligations, enforceable in
accordance with its terms.

 

(c)                                  No consent, approval, authorization or
order of, or filing, registration or qualification with, any court or
governmental authority or third party is required in connection with the
execution, delivery or performance by such Person of this Amendment, or, if such
consent is required, it has been obtained.

 

(d)                                 The execution and delivery of this Amendment
does not (i) violate, contravene or conflict with any provision of its, or its
Subsidiaries’ Organization Documents or (ii) materially violate, contravene or
conflict with any Laws applicable to it or any of its Subsidiaries.

 

5.                                      Representations and Warranties of the
Borrower.  The Borrower represents and warrants to the Lenders that after giving
effect to this Amendment (a) the representations and warranties of the Borrower
set forth in Article V of the Credit Agreement are true and correct in all
material respects (or, if such representation or warranty is qualified by
materiality or Material Adverse Effect, it shall be true and correct in all
respects as drafted) as of the date hereof, and (b) no event has occurred and is
continuing which constitutes a Default or an Event of Default.

 

6.                                      FATCA Grandfathering.  For purposes of
determining withholding Taxes imposed under FATCA, from and after the effective
date of this Amendment, the Loan Parties and the Agent shall treat (and the
Lenders hereby authorize the Agent to treat) the Credit Agreement as not
qualifying as a “grandfathered obligation” within the meaning of Treasury
Regulation Section 1.1471-2(b)(2)(i).

 

21

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7.                                      New Lender.

 

(a)                                 Royal Bank of Canada (the “New Lender”)
hereby agrees to provide a Commitment in the amount set forth on Schedule 2.01
attached hereto and the initial Applicable Percentage of the New Lender shall be
as set forth therein.

 

(b)                                 The New Lender (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Amendment and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.06(b)(iii) and
(v) of the Credit Agreement (subject to such consents, if any, as may be
required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and
after the First Amendment Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and shall have the obligations of a
Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by its Commitment and either it, or the Person
exercising discretion in making its decision to provide such Commitment, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 6.01 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Amendment and to provide its Commitment, (vi) it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Amendment and to provide its Commitment, and
(vii) if it is a Foreign Lender, attached hereto is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the New Lender; and (b) agrees that (i) it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

(c)                                  The Borrower agrees that, as of the date
hereof, the New Lender shall (i) be a party to the Credit Agreement and the
other Loan Documents, (ii) be a “Lender” for all purposes of the Credit
Agreement and the other Loan Documents, and (iii) have the rights and
obligations of a Lender under the Credit Agreement and the other Loan Documents.

 

(d)                                 The applicable address, facsimile number and
electronic mail address of the New Lender for purposes of Section 10.02 of the
Credit Agreement are as set forth in the New Lender’s Administrative
Questionnaire delivered by the New Lender to the Agent on or before the date
hereof or to such other address, facsimile number and electronic mail address as
shall be designated by the New Lender in a notice to the Agent.

 

(e)                                  The Lenders’ Commitments and Loans under
the Credit Agreement are hereby assigned and reallocated among the Lenders,
including the New Lender, without recourse, representation or warranty, such
that each of the Lenders, including the New Lender, has a Commitment in the
amount set forth on Schedule 2.01 and holds its Applicable Percentage of the
outstanding Loans.  Notwithstanding anything in the Credit Agreement or any
other Loan Document to the contrary, all assignments and reallocations of Loans
and Commitments pursuant to this Section 7 shall be deemed to be assignments
made subject to and in compliance with Section 10.06 of the Credit Agreement
(including, without limitation, the ‘Standard Terms and Conditions’ applicable
to Assignments and Assumptions).

 

22

--------------------------------------------------------------------------------

 

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 executed counterparts of this Amendment by
telecopy or pdf shall be effective as an original.

 

9.                                      GOVERNING LAW.  THIS AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

[remainder of page intentionally left blank]

 

23

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

BORROWER:

MATSON, INC.,

 

a Hawaii corporation

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

Title:

President and Chief Executive Officer

 

 

 

 

By:

/s/ Joel M. Wine

 

 

Name:

Joel M. Wine

 

Title:

CFO and Sr. Vice President

 

 

 

 

GUARANTORS:

MATSON NAVIGATION COMPANY, INC.,

 

a Hawaii corporation

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

Title:

Chairman of the Board, President and Chief Executive Officer

 

 

 

MATSON TERMINALS, INC.,

 

a Hawaii corporation

 

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

Title:

Chairman of the Board and President

 

 

 

MATSON VENTURES, INC.,

 

a Hawaii corporation

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

Title:

Chairman of the Board and President

 

 

 

MATSON LOGISTICS, INC.,

 

a Hawaii corporation

 

 

 

By:

/s/ Matthew J. Cox

 

 

Name:

Matthew J. Cox

 

Title:

Chairman of the Board

 

MATSON, INC.

FIRST AMENDMENT

 

1

--------------------------------------------------------------------------------

 

 

 

 

AGENT:

BANK OF AMERICA, N.A.,

 

as Agent

 

 

 

 

 

By:

/s/ Brenda Schriner

 

 

Name:

Brenda Schriner

 

Title:

Vice President

 

 

LENDERS:

BANK OF AMERICA, N.A.,

 

as Lender, L/C Issuer and Swing Line Lender

 

 

 

By:

/s/ Gordon H. Gray

 

 

Name:

Gordon H. Gray

 

Title:

Senior Vice President

 

 

 

FIRST HAWAIIAN BANK,

 

as a Lender and L/C Issuer

 

 

 

By:

/s/ Dawn Hoffman

 

 

Name:

Dawn Hoffman

 

Title:

Senior Vice President

 

 

 

BRANCH BANKING AND TRUST COMPANY,

 

as a Lender

 

 

 

By:

/s/ Robert Searson

 

 

Name:

Robert Searson

 

Title:

Senior Vice President

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as a Lender

 

 

 

By:

/s/ Alex Rogin

 

 

Name:

Alex Rogin

 

Title:

Vice President

 

 

 

PNC BANK, NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Philip K. Liebscher

 

 

Name:

Philip K. Liebscher

 

Title:

Senior Vice President

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Carlos L. Lamboglia

 

 

Name:

Carlos L. Lamboglia

 

Title:

Vice President

 

MATSON, INC.

FIRST AMENDMENT

 

2

--------------------------------------------------------------------------------

 

 

AMERICAN SAVINGS BANK, F.S.B.,

 

as a Lender

 

 

 

By:

/s/ Edward Chin

 

 

Name:

Edward Chin

 

Title:

First Vice President

 

 

 

BANK OF HAWAII,

 

as a Lender

 

 

 

By:

/s/ John McKenna

 

 

Name:

John McKenna

 

Title:

Senior Vice President

 

 

 

KEYBANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Tad L. Stainbrook

 

 

Name:

Tad L. Stainbrook

 

Title:

Vice President

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Sid Khanolkar

 

 

Name:

Sid Khanolkar

 

Title:

Director

 

 

 

CENTRAL PACIFIC BANK,

 

as a Lender

 

 

 

By:

/s/ Fernando Lopez

 

 

Name:

Fernando Lopez

 

Title:

Vice President

 

 

NEW LENDER:

ROYAL BANK OF CANADA,

 

as New Lender

 

 

 

By:

/s/ Benjamin Thomas

 

 

Name:

Benjamin Thomas

 

Title:

Authorized Signatory

 

MATSON, INC.

FIRST AMENDMENT

 

3

--------------------------------------------------------------------------------

 

Schedule 1.01

 

EXISTING LETTERS OF CREDIT

 

Existing Letters of Credit on the Closing Date issued by First Hawaiian Bank:

 

No.

 

Beneficiary

 

Amount (in
Dollars)

 

Issuance Date

 

Expiry Date

 

Currency

 

3060284

 

The Travelers Indemnity Company

 

25,000.00

 

12/01/03

 

12/01/12

 

USD

 

SB20020034

 

U.S. Department of Labor, Office or Worker’s Compensation Program

 

2,500,000.00

 

5/1/2002 effective 7/1/2002

 

7/1/2013

 

USD

 

SB20030007

 

State of Hawaii, Department of Transportation, Harbor Division

 

678,531.00

 

1/24/2003

 

1/24/2013

 

USD

 

SB20070024

 

Self Insurance Plans, State of California

 

220,000.00

 

3/19/2007

 

3/19/2013

 

USD

 

SB20070026

 

XL Specialty Insurance Company &/or Greenwich Insurance Co.

 

1,035,000.00

 

4/3/2007

 

9/15/2012

 

USD

 

SB20070047

 

Signal Mutual Indemnity Association c/o Signal Administration

 

2,071,818.00

 

7/25/2007

 

10/1/2012

 

USD

 

SB20080044

 

5733 San Leandro, LP, A California Limited Partnership

 

20,032.25

 

8/29/2008

 

8/29/2012

 

USD

 

SB20080045

 

700 Independent Road, LP, A California Limited Partnership

 

64,020.00

 

8/29/2008

 

8/29/2012

 

USD

 

SB20080046

 

Bonanza Buildings, LLC, A California Limited Liability Company

 

105,924.10

 

8/29/2008

 

8/29/2012

 

USD

 

SB20080047

 

9401 San Leandro, LP, A California Limited Partnership

 

168,000.00

 

8/29/2008

 

8/29/2012

 

USD

 

SB20100060

 

First Industrial, LP

 

85,000.00

 

11/8/2010

 

11/8/2012

 

USD

 

SB20110026

 

BCIC Phase One, LLC

 

29,354.40

 

8/12/2011

 

8/5/2013

 

USD

 

 

Existing Letters of Credit on the First Amendment Effective Date issued by Wells
Fargo Bank, National Association:

 

No.

 

Beneficiary

 

Amount (in
Dollars)

 

Issuance Date

 

Expiry Date

 

Currency

 

SM227390W

 

United States Fidelity and Guaranty Company

 

910,000.00

 

8/21/2007

 

1/10/2016

 

USD

 

SM227399W

 

National Union Fire Insurance of Pittsburgh

 

1,366,396.00

 

8/21/2007

 

2/27/2016

 

USD

 

SM231642W

 

KTR South Bay I, LLC

 

1,750,000.00

 

6/12/2008

 

10/5/2015

 

USD

 

 

--------------------------------------------------------------------------------

 

Schedule 2.01

 

COMMITMENTS AND APPLICABLE PERCENTAGES

 

Lender

 

Commitment

 

Applicable Percentage of
Aggregate Commitments

 

Bank of America, N.A.

 

$

50,000,000

 

12.500000000

%

First Hawaiian Bank

 

$

50,000,000

 

12.500000000

%

Branch Banking and Trust Company

 

$

40,000,000

 

10.000000000

%

JPMorgan Chase Bank, N.A.

 

$

40,000,000

 

10.000000000

%

PNC Bank, National Association

 

$

40,000,000

 

10.000000000

%

U.S. Bank National Association

 

$

40,000,000

 

10.000000000

%

American Savings Bank, F.S.B.

 

$

25,000,000

 

6.250000000

%

Bank of Hawaii

 

$

25,000,000

 

6.250000000

%

KeyBank National Association

 

$

25,000,000

 

6.250000000

%

Royal Bank of Canada

 

$

25,000,000

 

6.250000000

%

Wells Fargo Bank, National Association

 

$

25,000,000

 

6.250000000

%

Central Pacific Bank

 

$

15,000,000

 

3.750000000

%

TOTAL

 

$

400,000,000

 

100.000000000

%

 

--------------------------------------------------------------------------------

 

Exhibit F

 

FORM OF COMPLIANCE CERTIFICATE

 

For the fiscal quarter ended                  , 20   . (“Statement Date”)

 

I,                       , [Title] of Matson, Inc., a Hawaii corporation (the
“Borrower”) hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of June 4, 2012 (as amended,
modified, restated or supplemented from time to time, the “Credit Agreement”;
all of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Lenders and Bank of America, N.A., as Agent:

 

(a)                                 The company-prepared financial statements
which accompany this certificate are true and correct in all material respects
and have been prepared in accordance with GAAP consistently applied throughout
the period covered thereby, subject only to changes resulting from year-end
adjustments.

 

(b)                                 (select one):

 

o                                    Since             (the date of the last
similar certification, or, if none, the Closing Date) no Default or Event of
Default has occurred under the Credit Agreement.

 

o                                    The following covenants or conditions have
not been performed or observed and the following is a list of the nature and
period of existence of each such Default and what action the Borrower proposes
to take with respect thereto:

 

(c)                                  (select one):

 

o                                    Attached hereto are supplements to Schedule
5.08 to the Credit Agreement such that, as supplemented, such Schedule is
accurate and complete as of the date hereof.

 

o                                    No such supplements are required at this
time.

 

Delivered herewith are detailed calculations demonstrating compliance by the
Loan Parties with the financial covenants contained in Sections 7.01 and 7.05 of
the Credit Agreement as of the end of the fiscal period referred to above.

 

This        day of            , 20  .

 

 

MATSON, INC.,

 

a Hawaii corporation

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

 

Attachment to Officer’s Certificate

Computation of Financial Covenants and Consolidated Net Leverage Ratio

 

4 Quarter Period

Ending     /     /     

 

I. Consolidated Interest Coverage Ratio - Section 7.01(a)

A. Consolidated EBITDA for the most recent 4 quarters

1.                                      Consolidated Net Income

2.                                      Consolidated Interest Expense

3.                                      federal, state, local and foreign income
tax expense

4.                                      Depreciation Expense

5.                                      Amortization Expense

6.                                      deferred dry-docking amortization
expense

7.                                      one-time expenses and costs related to
the Horizon Acquisition to the extent Incurred within 12 months of the Horizon
Acquisition and in an aggregate Amount not to exceed $50,000,000 during the term
of the Credit Agreement

8.                                      Non-cash stock-based compensation

9.                                      Matson Alaska EBITDA contribution(1)

10.                               Consolidated EBITDA

B. Consolidated Interest Expense

1.                                      Interest, premium payments, debt
discounts, fees, charges and related expenses in connection with borrowed money
(including capitalized interest)

2.                                      Portion of rent expense under capital
leases

3.                                      Consolidated Interest Expense

 

Consolidated Interest Coverage Ratio

     : 1.00

Minimum Permitted = 3.50 : 1

Covenant Compliance

Yes/No

 

II. Consolidated Leverage Ratio - Section 7.01(b)

A. All Debt of the Company and Subsidiaries on a consolidated basis

B. Consolidated EBITDA

 

Consolidated Leverage Ratio

       : 1.00

Maximum Permitted = 3.25 : 1

Covenant Compliance

Yes/No

 

III. Priority Debt - Section 7.01(c)

(including, without limitation, all Title XI and all Debt secured by marine
assets)

 

B. Consolidated Tangible Assets

C. Priority Debt / Consolidated Tangible Assets

    %

 

Maximum Permitted = 20%

 

--------------------------------------------------------------------------------

(1)  Insert the amounts specified in the definition of Consolidated EBITDA for
the applicable period.

 

--------------------------------------------------------------------------------

 

Covenant Compliance

Yes/No

 

D. Principal amount of Priority Debt that is not Title XI Priority Debt

C. Priority Debt / Consolidated Tangible Assets

     %

 

Maximum Permitted = 10%

Covenant Compliance

Yes/No

 

IV. Sale of Capital Assets - Section 7.05

A. Amount of Capital Assets dispositions by Matson Navigation during the
twelve-month period

B. Total value of consolidated assets of the Borrower As of December, 31, 2014

C. IV A / IV B

%

 

Maximum Permitted = 10%

Covenant Compliance

Yes/No

 

D. All Capital Assets sold or otherwise disposed of subsequent to December 31,
2014

E. IV D / IV B

    %

 

Maximum Permitted = 30%

Covenant Compliance

Yes/No

 

V. Consolidated Net Leverage Ratio

A. All Net Debt of the Company and Subsidiaries on a consolidated basis

1.                                      Debt of the Borrower and its
Subsidiaries

2.                                      unrestricted cash and cash equivalents

3.                                      60% of the amount in the CCF

4.                                      $15,000,000

5.                                      Net Debt

B. Consolidated EBITDA

 

Consolidated Net Leverage Ratio

       : 1.00

 

--------------------------------------------------------------------------------

 

Exhibit I

 

FORM OF NOTICE OF LOAN PREPAYMENT

 

DATE:                     ,

 

TO:                           Bank of America, N.A., as [Agent][and Swing Line
Lender]

 

Reference is hereby made to that certain Credit Agreement, dated as of June 4,
2012 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among Matson, Inc., a Hawaii corporation (the
“Borrower”), the Lenders from time to time party thereto, and Bank of America,
N.A., as Agent.  Capitalized terms used but not otherwise defined herein have
the meanings provided in the Credit Agreement.

 

The Borrower hereby notifies the [Agent][and the Swing Line Lender] that on
             , pursuant to the terms of Section 2.05 of the Credit Agreement,
that the Borrower intends to prepay/repay the following Loans as more
specifically set forth below [subject to the conditions set forth below]:

 

o                                    Voluntary prepayment of Loan[s] in the
following amount(s):

 

o                                    Eurodollar Loans: $

Applicable Interest Period(s):

 

o                                    Base Rate Loans: $

 

o                                    Voluntary prepayment of Swing Line Loans in
the following amount(s): $

 

[Any conditions to prepayment to be inserted here per Section 2.05 of the Credit
Agreement.]

 

[Signature page follows]

 

--------------------------------------------------------------------------------

 

The Borrower has caused this Notice of Loan Prepayment to be duly executed and
delivered as of the date first above written.

 

 

MATSON, INC.,

 

a Hawaii corporation

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

 

Exhibit J -1

 

[FORM OF] SECURITY AGREEMENT

 

Vessel Type Aloha Class — Hull No. 29

 

SECURITY AGREEMENT dated             , 2015, 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 Credit Agreement dated as of June 4, 2012 (the
“Credit Agreement”) among the Obligor, Bank of America, N.A., as administrative
agent, and the lenders party thereto (together with their respective successors,
transferees and assigns, the “Lenders”), as modified by that certain Assignment
and Assumption Agreement dated as of June 28, 2012 among Alexander & Baldwin
Holdings, Inc., the Obligor and Bank of America, N.A. and as amended by that
certain First Amendment to Credit Agreement dated as of July 30, 2015,
(ii) Second Amended and Restated Note Agreement dated as of June 4, 2012 (the
“Prudential Note Agreement”) by and among the Obligor and certain purchasers
party thereto (together with their respective successors, transferees and
assigns, the “Prudential Purchasers”), as modified by that certain Company
Assignment, Assumption and Release Agreement dated as of June 29, 2012 among
Matson, Inc., the Obligor and the purchasers party thereto, and as amended by
that certain Amendment to Second Amended and Restated Note Agreement dated as of
July 30, 2015, (iii) the Guaranty Agreement dated as of June 28, 2012 (the
“Credit Agreement Guaranty”) executed by  the Obligor, Matson Logistics, Inc.,
Matson Terminals, Inc. and Matson Ventures, Inc.(2) (collectively, the
“Guarantors”), (iv) the Multiparty Guaranty dated as of June 29, 2012 (the
“Prudential Guaranty”) executed by the Guarantors, (v) the Multiparty Guaranty
dated as of January 28, 2014 (the “NYL Guaranty” and, together with the Credit
Agreement Guaranty and the Prudential Guaranty, the “Guaranties”) executed by
the Guarantors, (vi) the Note Agreement dated as of November 5, 2013 (the “NYL
Note Agreement” and, collectively with the Credit Agreement and the Prudential
Note Agreement, the “Financing Agreements”)(3) by and among Matson, Inc. and the
purchasers party thereto (together with their respective successors, transferees
and assigns, the “NYL Purchasers” and, collectively with the Lenders and the
Prudential Purchasers, the “Secured Parties”), as amended by that certain First
Amendment to Note Purchase Agreement dated as of July 30, 2015 and (vii) the
Intercreditor and Collateral Agency Agreement dated as of the date hereof among
the Secured Parties and the Collateral Agent (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

 

--------------------------------------------------------------------------------

(2)                                 To be updated for any additional guarantors.

(3)                                 To be updated for any additional Note
Purchase Agreements and related 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 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 Shipbuilding Contract (Vessel
Type Aloha Class — Hull No. 29) by and between Aker Philadelphia Shipyard, Inc.
and Matson Navigation Company, Inc. dated as of November 6, 2013 (the
“Shipbuilding Contract”);

 

(b)                                 any personal property assets constituting
(i) work in process under the Shipbuilding Contract, including without
limitation, the applicable partially-constructed vessel, (ii) Buyer’s Supplies
(as defined in the Shipbuilding Contract), and (iii) any Goods, Inventory and
material the Obligor has title to under 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
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.  Provided that no Event of Default under any of the Financing
Agreements has then occurred and is continuing, upon the earlier of (a) delivery
of the Vessel (as defined in the Shipbuilding Contract) to the Obligor and
(b) 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.  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.

 

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 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 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.

 

--------------------------------------------------------------------------------

 

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: [M. J. Cox]

 

 

 

Title: [President and Chief Executive Officer]

 

 

 

Address:

 

555 12th Street, 8th Floor

 

Oakland, CA 94067

 

Attention: Chief Financial Officer

 

Email:

 

Fax:

 

 

 

COLLATERAL AGENT:

 

 

 

BANK OF AMERICA, N.A.

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Address:

 

Bank of America, N.A.

 

Port Orchard BC

 

1497 Olney Ave. SE

 

Port Orchard, WA 98366-4035

 

Email: brenda.schriner@baml.com

 

Fax: 415.343.0557

 

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Schedule I

 

Legal Name, Type of Organization and Jurisdiction of Organization

 

Matson Navigation Company, Inc., a Hawaii corporation

 

--------------------------------------------------------------------------------

 

Exhibit J -2

 

[FORM OF] SECURITY AGREEMENT

 

Vessel Type Aloha Class — Hull No. 30

 

SECURITY AGREEMENT dated       , 20  , 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 Credit Agreement dated as of June 4, 2012 (the
“Credit Agreement”) among the Obligor, Bank of America, N.A., as administrative
agent, and the lenders party thereto (together with their respective successors,
transferees and assigns, the “Lenders”), as modified by that certain Assignment
and Assumption Agreement dated as of June 28, 2012 among Alexander & Baldwin
Holdings, Inc., the Obligor and Bank of America, N.A. and as amended by that
certain First Amendment to Credit Agreement dated as of July 30, 2015,
(ii) Second Amended and Restated Note Agreement dated as of June 4, 2012 (the
“Prudential Note Agreement”) by and among the Obligor and certain purchasers
party thereto (together with their respective successors, transferees and
assigns, the “Prudential Purchasers”), as modified by that certain Company
Assignment, Assumption and Release Agreement dated as of June 29, 2012 among
Matson, Inc., the Obligor and the purchasers party thereto, and as amended by
that certain Amendment to Second Amended and Restated Note Agreement dated as of
July 30, 2015, (iii) the Guaranty Agreement dated as of June 28, 2012 (the
“Credit Agreement Guaranty”) executed by the Obligor, Matson Logistics, Inc.,
Matson Terminals, Inc. and Matson Ventures, Inc.(4) (collectively, the
“Guarantors”), (iv) the Multiparty Guaranty dated as of June 29, 2012 (the
“Prudential Guaranty”) executed by the Guarantors, (v) the Multiparty Guaranty
dated as of January 28, 2014 (the “NYL Guaranty” and, together with the Credit
Agreement Guaranty and the Prudential Guaranty, the “Guaranties”) executed by
the Guarantors, (vi) the Note Agreement dated as of November 5, 2013 (the “NYL
Note Agreement” and, collectively with the Credit Agreement and the Prudential
Note Agreement, the “Financing Agreements”)(5) by and among Matson, Inc. and the
purchasers party thereto (together with their respective successors, transferees
and assigns, the “NYL Purchasers” and, collectively with the Lenders and the
Prudential Purchasers, the “Secured Parties”), as amended by that certain First
Amendment to Note Purchase Agreement dated as of July 30, 2015 and (vii) the
Intercreditor and Collateral Agency Agreement dated as of the date hereof among
the Secured Parties and the Collateral Agent (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

 

--------------------------------------------------------------------------------

(4)                                 To be updated for any additional guarantors.

(5)                                 To be updated for any additional Note
Purchase Agreements and related guaranties.

 

--------------------------------------------------------------------------------

 

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 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 Shipbuilding Contract (Vessel
Type Aloha Class — Hull No. 30) by and between Aker Philadelphia Shipyard, Inc.
and Matson Navigation Company, Inc. dated as of November 6, 2013 (the
“Shipbuilding Contract”);

 

(b)                                 any personal property assets constituting
(i) work in process under the Shipbuilding Contract, including without
limitation, the applicable partially-constructed vessel, (ii) Buyer’s Supplies
(as defined in the Shipbuilding Contract), and (iii) any Goods, Inventory and
material the Obligor has title to under 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 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.  Provided that no Event of Default under any of the Financing
Agreements has then occurred and is continuing, upon the earlier of (a) delivery
of the Vessel (as defined in the Shipbuilding Contract) to the Obligor and
(b) 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.  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.

 

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 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 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.

 

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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: [M. J. Cox]

 

 

 

Title: [President and Chief Executive Officer]

 

 

 

Address:

 

555 12th Street, 8th Floor

 

Oakland, CA 94067

 

Attention: Chief Financial Officer

 

Email:

 

Fax:

 

 

 

COLLATERAL AGENT:

 

 

 

BANK OF AMERICA, N.A.

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Address:

 

Bank of America, N.A.

 

Port Orchard BC

 

1497 Olney Ave. SE

 

Port Orchard, WA 98366-4035

 

Email: brenda.schriner@baml.com

 

Fax: 415.343.0557

 

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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 Aloha Class — Hull No. 30) (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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