Exhibit 10.3

Execution Version

SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of January 31, 2013 (this
“Agreement”), is entered into among HORIZON LINES, INC., a Delaware corporation
(“Parent”), HORIZON LINES, LLC, a Delaware limited liability company (the
“Borrower”), the Guarantors party hereto, the Lenders party hereto, and WELLS
FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as
administrative agent for the Lenders (in such capacity, the “Agent”).

PRELIMINARY STATEMENTS

The Borrower, Parent, the Lenders and the Agent are parties to that certain
Credit Agreement dated as of October 5, 2011 (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”).

The Borrower has informed the Lenders and the Agent that it intends (a) to form
one or more new special purpose entities as Subsidiaries of Horizon Alaska (as
defined below) to, among other things, borrow $75,000,000 in principal amount of
senior secured term loans to finance (in part) the purchase of the three
U.S.-flag D-7 class containerships currently subchartered by Borrower for use in
the Alaska trade lane, (b) to borrow $20,000,000 in principal amount of senior
secured term loans secured by second priority Liens on the ABL Priority
Collateral and first priority Liens on the Secured Note Priority Collateral, the
proceeds of which shall be applied as a capital contribution to the foregoing
special purpose entities for financing (together with the proceeds of the term
loan financing described in clause (a)) the purchase price of such
containerships and related transaction fees and expenses, (c) to assign Horizon
Alaska’s rights with respect to certain land use agreements with the
Municipality of Anchorage, Alaska to one of such special purpose entities and
enter into arrangements with respect to such land use agreements to sublease the
rights thereunder to Horizon Alaska, and (d) to enter into leasing arrangements
with such special purpose entities so that Borrower and its Subsidiaries can
continue to operate such containerships.

The Borrower has requested that the Required Lenders agree to amend the Credit
Agreement and consent to the redelivery of the Compliance Certificate with
respect to the fiscal month ended November 18, 2012 as more specifically set
forth herein. Subject to the terms and conditions set forth herein, the Agent
and the Required Lenders have agreed to such request of the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms. Except as otherwise provided herein, all capitalized undefined
terms used in this Agreement (including, without limitation, in the introductory
paragraph and the preliminary statements hereto) shall have the meanings
assigned thereto in the Credit Agreement.

2. Amendments.

(a) New Definitions. The following new definitions are hereby added to
Schedule 1.1 of the Credit Agreement in appropriate alphabetical order to read
in their entirety as follows:

“Alaska D-7 Vessels” means the three U.S.-flag D-7 class containerships HORIZON
ANCHORAGE (Official No. 910306), HORIZON KODIAK (Official No. 910308) and
HORIZON TACOMA (Official No. 910307), which constitute Chartered Vessels.

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“Alaska Land Use SPE” means Horizon Lines Alaska Terminals, LLC, a Delaware
limited liability company and wholly owned direct Subsidiary of the Alaska
Pledgor SPE.

“Alaska Pledgor SPE” means Horizon Lines Merchant Vessels, LLC, a Delaware
limited liability company and wholly owned direct Subsidiary of Horizon Alaska.

“Alaska SPEs” means each of Alaska Vessel SPE, Alaska Land Use SPE and Alaska
Pledgor SPE.

“Alaska Vessel SPE” means Horizon Lines Alaska Vessels, LLC, a Delaware limited
liability company and wholly owned direct Subsidiary of the Alaska Pledgor SPE.

“Alaska Vessel Term Loan Agreement” means that certain Term Loan Agreement dated
as of January 31, 2013 by and among the Alaska Vessel SPE, as borrower, the
other Alaska SPEs, as guarantors, the lenders from time to time party thereto
and U.S Bank, National Association, as agent.

“Alaska Vessel Term Loan Documents” means, collectively, the Alaska Vessel Term
Loan Agreement and all other loan agreements, indentures, note purchase
agreements, promissory notes, guarantees, security agreements, intercreditor
agreements, assignment and assumption agreements and other instruments and
agreements evidencing the terms of the Alaska Vessel Term Loan Facility.

“Alaska Vessel Term Loan Facility” means the term loan credit facility evidenced
by the Alaska Vessel Term Loan Agreement in an aggregate principal amount not to
exceed $75,750,000.

“Alaska Vessel Transactions” means, collectively, (a) formation of the Alaska
SPEs, (b) the incurrence of Indebtedness under the Superpriority Term Loan
Facility, (c) the contribution of the cash proceeds of the Superpriority Term
Loan Facility to Alaska Pledgor SPE (and the contribution in turn of such
amounts to the Alaska Vessel SPE), (d) the incurrence of Indebtedness under the
Alaska Vessel Term Loan Facility, (e) the purchase of the Alaska D-7 Vessels by
the Alaska Vessel SPE, with the proceeds of such Indebtedness under the Alaska
Vessel Term Loan Facility and the proceeds of such contribution to Alaska Vessel
SPE, (f) the charter arrangements between Borrower and its Subsidiaries and the
Alaska Vessel SPE for the charter of the Alaska D-7 Vessels pursuant to the
Chartered Vessel Documents with respect thereto, and (g) the Land Use Agreement
Transactions.

“Horizon Alaska” means Horizon Lines of Alaska, LLC, a Delaware limited
liability company.

 

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“Land Use Agreements” means, collectively, (a) the following agreements in
effect on the Second Amendment Effective Date in each case between the
Municipality of Anchorage (“MOA”) and Horizon Alaska (or the Borrower): (i) that
certain Preferential Usage Agreement, (ii) that certain Crane Agreement,
(iii) those certain Revocable Use Permits and (iv) those certain Land-Use
Leases, collectively relating to the usage by Horizon Alaska of Lots 4A, 4A-1,
5D-1, 5F-1, 6C-1 and 6D-1 on or about the Port of Anchorage, and (b) such other
agreements in effect on the Second Amendment Effective Date between the MOA and
Horizon Alaska (or the Borrower), as the Borrower may elect, relating to the
Port of Anchorage, and any amendments, supplements, modifications, extensions or
replacements of the agreements referred to in clauses (a) and (b).

“Land Use Agreement Transactions” means, collectively, (a) the assignment by
Horizon Alaska of its rights with respect to the Land Use Agreements to the
Alaska Land Use SPE, and (b) the sublease by Alaska Land Use SPE to Horizon
Alaska (and/or any other Loan Party) of such Land Use Agreements.

“Reporting Trigger Amount” means the greater of (a) $14,000,000 and (b) 14.0% of
the Maximum Revolver Amount.

“Reporting Trigger Period” means the period (a) commencing on the date that
(i) an Event of Default occurs, or (ii) Excess Availability is less than the
Reporting Trigger Amount for 3 consecutive Business Days and (b) continuing
until, during the preceding consecutive 45 days, no Event of Default exists and
Excess Availability is equal to or greater than the Reporting Trigger Amount at
all times.

“Second Amendment” means the Second Amendment to Credit Agreement dated as of
January 31, 2013, entered into by and among the Borrower, the Parent, the other
Guarantors, the Agent and the Lenders.

“Second Amendment Effective Date” means January 31, 2013.

“Superpriority Term Loan Agreement” means that certain Term Loan Agreement dated
as of January 31, 2013 by and among the Borrower, as borrower, the Guarantors,
as guarantors, the lenders from time to time party thereto and U.S Bank,
National Association, as agent.

“Superpriority Term Loan Documents” means, collectively, the Superpriority Term
Loan Agreement and all other loan agreements, indentures, note purchase
agreements, promissory notes, guarantees, security agreements, intercreditor
agreements, assignment and assumption agreements and other instruments and
agreements evidencing the terms of the Superpriority Term Loan Facility.

“Superpriority Term Loan Facility” means the term loan credit facility evidenced
by the Superpriority Term Loan Agreement.

(b) Adjusted EBITDA. The definition of “Adjusted EBITDA” contained in
Schedule 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as set forth on Schedule 1 hereto.

 

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(c) Fixed Charges. The definition of “Fixed Charges” contained in Schedule 1.1
of the Credit Agreement is hereby amended by adding immediately prior to the “.”
at the end of such definition the following:

and (d) for any calculation of Fixed Charges for any period that includes any
month commencing prior to the Second Amendment Effective Date, the pro forma
amount of interest expense shown for each such applicable month set forth in the
applicable line item of Schedule A-3.

(d) Intercreditor Agreement. The definition of “Intercreditor Agreement”
contained in Schedule 1.1 of the Credit Agreement is hereby amended and restated
in its entirety as follows:

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of Second Amendment Effective Date, by and among Parent, Borrower, Agent and the
applicable trustee or agent under each of the Secured Notes, in substantially
the form of Exhibit I-1, as it may be amended, amended and restated,
supplemented or otherwise modified from time to time.

(e) Permitted Indebtedness. The definition of “Permitted Indebtedness” contained
in Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the
reference to “$20,000,000” in clause (x) thereof and substituting therefor
“$10,000,000”, (ii) deleting the “and” at the end of clause (x) thereof,
(iii) deleting the “.” at the end of clause (y) thereof and substituting
therefor “,”, and (iv) adding at the end thereof the following new clauses
(z) and (aa):

(z) Indebtedness under the Superpriority Term Loan Facility in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding less the
aggregate amount of principal repayments and prepayments with respect thereto
made after the Closing Date, and Refinancing Indebtedness in respect thereof;
and

(aa) unsecured guarantees of the obligations of Horizon Alaska owing to the
Alaska SPEs under the Chartered Vessel Documents with respect to the Alaska D-7
Vessels and the Land Use Agreements.

(f) Permitted Investments. The definition of “Permitted Investments” contained
in Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the
“and” at the end of clause (u) thereof; (ii) adding at the end of clause
(v) thereof “, and”; and (iii) adding at the end thereof the following new
clause (w):

(w) (i) the Investments described in clauses (a) and (c) of the definition of
“Alaska Vessel Transactions”, (ii) the Investments resulting from consummation
of the Land Use Agreement Transactions, (iii) Investments by any Loan Party in
the Alaska SPEs for repairs, maintenance or improvements to the Alaska D-7
Vessels constituting Capital Expenditures, whether financed or unfinanced (for
the avoidance of doubt (A) payments required by the Chartered Vessel Documents
with respect to the Alaska D-7 Vessels, including but not limited to payments
(x) made by any Borrower or its Subsidiaries to the Alaska Vessel SPE for the
charter of the Alaska D-7 Vessels and (y) made by any Borrower or its
Subsidiaries to any Person for maintenance, insurance, repairs and drydocking,
and (B) operating expenditures related to the Alaska D-7 Vessels, including but
not limited to fuel, crew costs and spare parts, and (C) the assignment of
insurances (and any payments thereunder) to the Alaska Vessel SPE pursuant to
the Chartered Vessel Documents with respect to the Alaska D-7 Vessels, shall in
each case not be considered Investments for purposes of this Agreement and the
Loan Documents), and (iv) additional Investments by any Loan Party in the Alaska
SPEs in an aggregate amount to not exceed $3,000,000 at any time outstanding

 

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(g) Permitted Liens. The definition of “Permitted Liens” contained in
Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the “and”
at the end of clause (dd) thereof and substituting therefor “,”, (ii) deleting
the “.” at the end of clause (ee) thereof and substituting therefor “,”
(ii) adding the following new clauses (ff) and (gg) immediately before the
proviso therein:

(ff) Liens on the Collateral securing Indebtedness permitted under clause (z) of
the definition of Permitted Indebtedness; provided that such Indebtedness is
subject to the Intercreditor Agreement, and

(gg) any assignment of insurances to a lessor and/or its lenders with respect to
Chartered Vessels pursuant to the applicable Chartered Vessel Documents.

(h) Permitted Restricted Debt Payments. The definition of “Permitted Restricted
Debt Payments” contained in Schedule 1.1 of the Credit Agreement is hereby
amended by (i) deleting the “and” at the end of clause (f) thereof;
(ii) deleting the reference in clause (h) thereof to “clauses (a) through (f)”
and substituting therefor “clauses (a) through (g)”; and (iii) adding
immediately prior to clause (h) thereof the following new clause (g):

(g) Restricted Debt Payments of the Secured Notes (Convertible), together with
customary make-whole premiums with respect thereto, so long as (a) Excess
Availability for the 30 consecutive days ending on the date of such Restricted
Debt Payments (including the date thereof) (calculated on a pro forma basis
after giving effect to such Restricted Debt Payments) shall not be less than
$17,500,000 and (b) no Default or Event of Default is continuing or would result
from such Restricted Debt Payments, and

(i) Secured Notes. The definition of “Secured Notes” contained in Schedule 1.1
of the Credit Agreement is hereby amended and restated in its entirety as
follows:

“Secured Notes” means, collectively, the Secured Notes (Convertible), the
Secured Notes (First Lien), the Secured Notes (Second Lien) and the
Superpriority Term Loan Facility.

(j) Secured Notes Documents. The definition of “Secured Notes Documents”
contained in Schedule 1.1 of the Credit Agreement is hereby amended and restated
in its entirety as follows:

“Secured Notes Documents” means, collectively, the Secured Notes Documents
(Convertible), the Secured Notes Documents (First Lien), the Secured Notes
Documents (Second Lien) and the Superpriority Term Loan Documents.

 

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(k) Section 1.2. Section 1.2 of the Credit Agreement is hereby amended by
(i) relettering clause (b) as clause (c) and inserting the following new clause
(b):

(b) the leases evidenced by the Chartered Vessel Documents with respect to the
Alaska D-7 Vessels shall be treated as operating leases and shall not be treated
as Capital Leases (or given a similar treatment) for purposes of the definition
of Indebtedness or any related definitions or in the computation of any
financial ratio or requirement set forth in any Loan Document,

(l) Section 2.1(c). Section 2.1(c) of the Credit Agreement is hereby amended by
(i) deleting the “and” at the end of clause (iii) thereof, and (iii) adding the
following new clause (v) immediately before the proviso therein:

and (v) at any time on or after the occurrence of a default or event of default
under the Secured Notes Documents (Convertible) until such time as such default
or event of default is cured or waived or the Secured Notes (Convertible) are
repaid in full, reserves in an amount up to the aggregate amount of outstanding
Secured Notes (Convertible);

(m) Section 3.3. Section 3.3 of the Credit Agreement is hereby amended by
deleting the first sentence thereof and substituting therefor the following:

This Agreement shall continue in full force and effect for a term ending on
October 5, 2016 (the “Maturity Date”); provided that if the Secured Notes (First
Lien), the Secured Notes (Second Lien), any Additional Notes, the Alaska Vessel
Term Loan Facility, and the Superpriority Term Loan Facility shall have not been
repaid, refinanced, or defeased in full or, in the reasonable determination of
Agent, adequately reserved for or cash collateralized on or prior to the 90th
day immediately preceding the maturity date of the Secured Notes (First Lien),
the Secured Notes (Second Lien), any Additional Notes, the Alaska Vessel Term
Loan Facility, and the Superpriority Term Loan Facility, respectively, then the
Maturity Date will occur on the 90th day immediately preceding the earliest
maturing and outstanding of the Secured Notes (First Lien), the Secured Notes
(Second Lien), any Additional Notes, the Alaska Vessel Term Loan Facility, or
the Superpriority Term Loan Facility; provided further that, with respect to any
Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness
shall have a maturity date that is at least 90 days later than the Maturity
Date.

(n) Sections 4.1, 4.17 and 4.28. Sections 4.1, 4.17 and 4.28 of the Credit
Agreement are hereby amended by deleting the words “Closing Date” each time they
appear therein and substituting therefor the words “Second Amendment Effective
Date”.

(o) Section 5.7. Section 5.7 of the Credit Agreement is hereby amended by
deleting the words “Trigger Event” therein and substituting therefor the words
“Trigger Period”.

(p) Section 5.17. Section 5.17 of the Credit Agreement is hereby amended by
adding the words “and its Subsidiaries” after the words “Loan Party” therein.

(q) Section 5.19. Section 5 of the Credit Agreement is hereby amended by adding
at the end thereof the following new Section 5.19:

 

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5.19 Treatment of Alaska SPEs.

(a) No Alaska SPE shall engage in any business or activities, or own any assets
or have any liabilities other than (a) engaging in the Alaska Vessel
Transactions, (b) owning the Alaska D-7 Vessels, (c) leasing the Alaska D-7
Vessels to Borrower and its Subsidiaries and performing its obligations under
the related Chartered Vessel Documents, (d) leasing and sub-leasing the Land Use
Agreements to Borrower and its Subsidiaries and performing its obligations
thereunder, (e) performing its obligations under the Alaska Vessel Term Loan
Documents and (f) de minimis activities, de minimis assets and de minimis
liabilities substantially related or incidental to those businesses and
activities set forth in clauses (a) through (e) above.

(b) Notwithstanding anything herein to the contrary, where reference is made
herein to the “Parent on a consolidated basis” or “Parent and its Subsidiaries
on a consolidated basis” or similar language, any such references to the
Subsidiaries or consolidation shall include the Alaska SPEs.

(c) Notwithstanding anything herein to the contrary, no Alaska SPE shall
constitute a “Subsidiary” of Parent (or of any Subsidiary of Parent) for any
purposes of this Agreement or any of the other Loan Documents except for
purposes of (i) clauses (a) and (b) above, (ii) Sections 4.1(c) (solely the
first sentence thereof), 4.3, 4.7, 4.8, 4.9, 4.11, 4.12, 4.18, 4.20, 4.21, 4.22,
4.23, 4.24, 4.29, 5.17, 5.19, and 8.16, and (iii) the definition of Fixed Charge
Coverage Ratio and the component definitions and the terms used in the
definition of Fixed Charge Coverage Ratio.

(r) Section 6.12. Section 6.12 of the Credit Agreement is hereby amended by
adding immediately prior to the “.” at the end of clause (i) thereof the phrase
“and any Investments permitted pursuant to clause (w) of the definition of
Permitted Investments”.

(s) Section 6.15. Section 6.15 of the Credit Agreement is hereby amended (i) by
adding immediately prior to the reference to “the Secured Notes Documents” the
phrase “the Superpriority Term Loan Documents,” (ii) deleting the “or” at the
end of clause (O) thereof and substituting therefor “,”, and (iii) adding
immediately prior to the “.” at the end thereof the following new clauses
(P) and (Q):

, (P) are restrictions imposed by Chartered Vessel Documents with respect to the
applicable Chartered Vessels, provided that such restrictions shall apply only
to the rights and interests (including insurance and the proceeds thereof) with
respect to such Chartered Vessels, or (Q) are restrictions on assignment, lease,
sublease or other transfer by Horizon Alaska (and/or any other Loan Party) of
the sublease to it of the Land Use Agreements (and the rights thereunder)

(t) Section 8.7. Section 8.7 of the Credit Agreement is hereby amended by
amending and restating in its entirety clause (a)(i) thereof as follows:

(i) default in respect of (A) any Secured Notes (other than the Secured Notes
(Convertible)) or any Additional Notes and such default results in an “Event of
Default” (or the equivalent term) under, and as defined in, the Secured Notes
Documents (other than the Secured Notes Documents (Convertible)) or the
documents evidencing the Additional Notes, or (B) the Secured Notes
(Convertible) and the holders of such Indebtedness (or their authorized
representatives on their behalf) exercise any remedies (other than solely the
acceleration thereof) available to the holders of such Indebtedness (or their
authorized representatives on their behalf) under the Secured Notes Documents
(Convertible),

 

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(u) Section 8.14. Section 8.14 of the Credit Agreement is hereby amended by
adding the following words “or Land Use Agreements” after each instance of the
words “Chartered Vessel Documents” therein.

(v) Section 8.15. Section 8.15 of the Credit Agreement is hereby amended by
(i) adding the words “or Alaska D-7 Vessel” after each instance of the words
“Mortgaged Vessel” therein and (ii) adding the words “, mortgagee or similar
Person” after the words “Mortgage Trustee” therein.

(w) Section 8.16. Section 8.16 of the Credit Agreement is hereby amended by
adding the words “or Subsidiary thereof” after each instance of the words “Loan
Party” therein.

(x) Section 8.17. A new Section 8.17 is added to the Credit Agreement as
follows:

8.17 Alaska D-7 Vessels Guaranty. If the guaranty dated on or about the Second
Amendment Effective Date of the Loan Parties in favor of the Alaska Vessel SPE
guaranteeing the obligations of the Borrower under the charter of the Alaska D-7
Vessels (as amended, restated, replaced or otherwise modified from time to time)
is invoked or otherwise enforced with respect to any Loan Party.

(y) Section 15.11. Section 15.11 of the Credit Agreement is hereby amended by
adding immediately prior to the reference to “or the Secured Notes” the phrase
“or the Superpriority Term Loan Facility,”.

(z) Schedules. (i) Schedule 5.2 is hereby amended by deleting the reference in
the first row thereof to “Trigger Period” and substituting therefor “Reporting
Trigger Period”, (ii) Schedule A-3 is hereby added to the Credit Agreement, and
(iii) Schedules 4.1, 4.17 and 4.28 of the Credit Agreement are hereby amended
and restated, each as attached hereto.

(aa) Exhibit. Exhibit I-1 is hereby added to the Credit Agreement as attached
hereto.

3. Consent. Subject to the terms and conditions hereof, the Agent and the
Lenders party hereto hereby consent to the redelivery, on or prior to the third
Business Day following the Agreement Effective Date, of the Compliance
Certificate attaching the Excess Availability Calculation, the calculation of
Leverage Ratio, the calculation of Fixed Charge Coverage Ratio and the
calculation of Adjusted EBITDA required by Section 5.1 of the Credit Agreement
for the month ended November 18, 2012, which calculations shall give effect to
the amendments set forth in this Agreement and shall apply for all purposes of
the Credit Agreement and the Loan Documents as the calculations of such amounts
for the fiscal month then ended. In addition, for the avoidance of doubt, the
Excess Availability Calculation, the calculation of Leverage Ratio, the
calculation of Fixed Charge Coverage Ratio and the calculation of Adjusted
EBITDA and the related Compliance Certificates for the fiscal month and fiscal
quarter ended December 23, 2012 and for the fiscal month ended January 20, 2013
shall give effect to the amendments set forth in this Agreement.

 

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4. Condition to Effectiveness. This Agreement shall be effective upon
satisfaction of each of the following conditions (the first date on which such
conditions are satisfied, the “Agreement Effective Date”).

(a) Executed Amendment. The Agent’s receipt of counterparts of this Agreement
executed by the Borrower, Parent, Guarantors, the Required Lenders and the
Agent.

(b) Executed Intercreditor Agreement. The Agent’s receipt of counterparts of the
Intercreditor Agreement executed by the Borrower, Parent, Guarantors, the Agent
and the applicable trustee or agent under each of the Secured Notes.

(c) Alaska Vessel Transactions Documents. The Agent’s receipt of (i) copies of
the Alaska Vessel Term Loan Agreement and any guaranty, security agreement,
pledge agreement or vessel mortgage related thereto (including any attachments
thereto) being entered into on or prior to the Second Amendment Effective Date,
(ii) copies of the Superpriority Term Loan Agreement and any guaranty, security
agreement, pledge agreement or vessel mortgage related thereto (including any
attachments thereto) being entered into on or prior to the Second Amendment
Effective Date and (iii) the bareboat charter, any guaranty or other agreement
(including any attachments thereto) obligating any Person to make payments in
respect such bareboat charter, and any other Chartered Vessel Documents
requested by the Agent with respect to the Alaska D-7 Vessels being entered into
on or prior to the Second Amendment Effective Date, in each case, on terms and
conditions reasonably satisfactory to Agent (it being understood and agreed that
the terms and conditions set forth in the “Summary of Indicative Terms and
Conditions” attached to that certain Commitment Letter dated December 22, 2012
relating to the Alaska Vessel Term Loan Facility and the “Summary of Indicative
Terms and Conditions” attached to that certain Commitment Letter dated
December 22, 2012 relating to the Superpriority Term Loan Facility are
satisfactory to Agent).

(d) Officer’s Certificate. Agent’s receipt of a certificate of a Responsible
Officer of Borrower certifying that on and as of the Agreement Effective Date no
default or event of default exists (and other matters related thereto) under
Senior Notes Documents or will result on such date after giving effect to the
consummation of any of the Alaska Vessel Transactions or the execution and
delivery of this Agreement or the Intercreditor Agreement.

(e) Other Certificates. Agent’s receipt of copies of all certificates of any
Loan Party and attachments thereto furnished to the trustee, agent or
representative of the holders of the Secured Notes in connection with the
execution by such trustee, agent or representative of (i) the Intercreditor
Agreement or (ii) any other agreements in connection with the Alaska Vessel
Transactions.

(f) Legal Opinions. Agent’s receipt of a legal opinion from Kirkland and Ellis
LLP, legal counsel to the Loan Parties, addressed to Agent and each Lender and
otherwise in form and substance reasonably satisfactory to Agent.

(g) Fee and Expenses. The Borrower shall have paid (i) to Agent (or its
Affiliate) an amendment fee in an amount equal to $100,000 and (ii) the legal
fees and expenses of Winston & Strawn LLP then due and owing, as invoiced in
writing to the Borrower.

 

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5. Effect of the Amendments. Except as expressly provided herein, the Credit
Agreement and the other Loan Documents shall remain unmodified and in full force
and effect. Except as expressly set forth herein, this Agreement shall not be
deemed (a) to be a waiver of, or consent to, a modification of or amendment of,
any other term or condition of the Credit Agreement or any other Loan Document,
(b) to prejudice any other right or rights which the Agent or the Lenders may
now have or may have in the future under or in connection with the Credit
Agreement or the other Loan Documents or any of the instruments or agreements
referred to therein, as the same may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, (c) to be a commitment or
any other undertaking or expression of any willingness to engage in any further
discussion with the Borrower, Parent or any other Person with respect to any
waiver, amendment, modification or any other change to the Credit Agreement or
the Loan Documents or any rights or remedies arising in favor of the Lenders or
the Agent, or any of them, under or with respect to any such documents or (d) to
be a waiver of, or consent to or a modification or amendment of, any other term
or condition of any other agreement by and among any Loan Party, on the one
hand, and the Agent or any other Lender, on the other hand. References in the
Credit Agreement to “this Agreement” (and indirect references such as
“hereunder”, “hereby”, “herein”, and “hereof”) and in any Loan Document to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
modified hereby.

6. Representations and Warranties/No Default. By their execution hereof, each
Loan Party hereby represents and warrants as follows:

(a) Such Loan Party has the right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each other document executed in connection
herewith to which it is a party in accordance with their respective terms.

(b) This Agreement and each other document executed in connection herewith has
been duly executed and delivered by its duly authorized officers, and each such
document constitutes the legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors’ rights in general and the availability of equitable
remedies.

(c) Each of the representations and warranties set forth in the Credit Agreement
and the other Loan Documents is true and correct in all material respects as of
the date hereof (except to the extent that (i) any such representation or
warranty that is qualified by materiality or by reference to Material Adverse
Effect, in which case such representation or warranty is true and correct in all
respects as of the date hereof or (ii) any such representation or warranty
relates only to an earlier date, in which case such representation or warranty
shall remain true and correct as of such earlier date).

(d) No Default or Event of Default has occurred or is continuing or would result
after giving effect to the extension and the other transactions contemplated by
this Agreement.

7. Reaffirmations. Each Loan Party (a) agrees that the transactions contemplated
by this Agreement shall not limit or diminish the obligations of such Person
under, or release such Person from any obligations under, the Credit Agreement
and each other Loan Document to which it is a party, (b) confirms, ratifies and
reaffirms its obligations under the Credit Agreement and each other Loan
Document to which it is a party, and (c) agrees that the Credit Agreement and
each other Loan Document to which it is a party remain in full force and effect
and are hereby ratified and confirmed.

8. Release of Claims. To induce the Agent and the Lenders to enter into this
Agreement, each Loan Party hereby releases, acquits and discharges the Agent and
the Lenders, and all officers, directors, agents, employees, successors and
assigns of the Agent or any Lender, from any and all liabilities, claims,
demands, actions or causes of action of any kind or nature (if there be any),
whether absolute or contingent, disputed or undisputed, at law or in equity,
known or unknown, that such Loan Party now has or ever had against the Agent or
any Lender arising under or in connection with any of the Loan Documents or
otherwise. Each Loan Party represents and warrants to the Agent and the Lenders
that such Loan Party has not transferred or assigned to any Person any claim
that such Loan Party ever had or claimed to have against the Agent or any
Lender.

 

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9. Miscellaneous

(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. Without limiting the general
applicability of the foregoing and the terms of the other Loan Documents to this
Agreement and the parties hereto, the terms of Section 12 of the Credit
Agreement are incorporated herein by reference, mutatis mutandis.

(b) Loan Document. This Agreement shall constitute a “Loan Document” under and
as defined in the Credit Agreement.

(c) Counterparts; Electronic Execution. This Agreement 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. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement

(d) Severability. If any provision of any of this Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

(e) Entirety. This Agreement, the other Loan Documents and the other documents
relating to the Obligations represent the entire agreement of the parties hereto
and thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence relating to
the Loan Documents, any other documents relating to the Obligations, or the
transactions contemplated herein and therein.

[Remainder of page intentionally blank.]

 

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

 

HORIZON LINES, LLC, as Borrower By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Executive Vice President, General Counsel
and Secretary HORIZON LINES, INC., as Parent By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Executive Vice President, General Counsel
and Secretary AERO LOGISTICS, LLC, as Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HAWAII STEVEDORES, INC., as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary H-L DISTRIBUTION SERVICE, LLC,
as Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HORIZON LINES HOLDING CORP., as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Executive Vice President, General Counsel
and Secretary

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HORIZON LINES OF ALASKA, LLC, as Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HORIZON LINES OF GUAM, LLC, as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary

HORIZON LINES OF PUERTO RICO, INC., as Guarantor

By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HORIZON LINES VESSELS, LLC, as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HORIZON LOGISTICS, LLC, as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary HORIZON SERVICES GROUP, LLC, as
Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II Title:   Secretary

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SEA-LOGIX, LLC, as Guarantor By:  

/s/ Michael F. Zendan II

Name:   Michael F. Zendan II

Title:

  Secretary

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WELLS FARGO CAPITAL FINANCE, LLC, as Agent and as a Lender

By:  

/s/ Ryan Davison

Name:   Ryan Davison Title:   V.P.