EX-10.2






Exhibit 10.2




FIRST AMENDMENT TO CREDIT AGREEMENT




     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 11,
2009, is by and among HORIZON LINES, INC., a Delaware corporation (the “Borrower”), the
Subsidiaries of the Borrower as may from time to time become a party hereto (collectively, the
“Guarantors”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent on behalf
of the Lenders under the Credit Agreement (as hereinafter defined) (in such capacity, the
“Administrative Agent”). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement.



W I T N E S S E T H




     WHEREAS, the Borrower, the Guarantors, certain banks and financial institutions from time to
time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain
Credit Agreement dated as of August 8, 2007 (as amended, modified, extended, restated, replaced, or
supplemented from time to time, the “Credit Agreement”); and



     WHEREAS, the Credit Parties and the Required Lenders have agreed to amend the Credit Agreement
in accordance with and subject to the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:



ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT




     1.1 New Definitions. The following definitions are hereby added to Section 1.1 of the
Credit Agreement in the appropriate alphabetical order:



     “Deposit Account Control Agreement” shall mean an agreement, among a Credit Party, a
depository institution, and the Administrative Agent, which agreement is in a form reasonably
acceptable to the Administrative Agent and the depository institution and which provides the
Administrative Agent with “control” (as such term is used in Article 9 of the UCC) over the deposit
account(s) described therein (which control is exercisable upon the occurrence and continuance of
an Event of Default), as the same may be amended, modified, extended, restated, replaced, or
supplemented from time to time.



     “DOJ Investigation” shall mean the investigation by the Antitrust Division of the
United States Department of Justice regarding possible antitrust violations by the Credit Parties
or their Subsidiaries with respect to the ocean shipping business.



 









 





     “First Amendment” shall mean the First Amendment to Credit Agreement, dated as of the
First Amendment Effective Date, among the Credit Parties and the Administrative Agent, on behalf of
the Lenders.



     “First Amendment Effective Date” shall mean June 11, 2009.



     “Litigation Matters” shall mean any civil action, criminal action or investigation,
including related shareholder litigation, involving any allegation of a violation of federal, state
or other antitrust law by any of the Credit Parties or their Subsidiaries with respect to the
ocean shipping business.



     “Puerto Rico Settlement” shall mean the settlement of certain class action lawsuits
(which were consolidated into a single multidistrict litigation proceeding (case no. MDL1960) in
the District of Puerto Rico), in each case involving any allegation of a violation of federal,
state or other antitrust law by any of the Credit Parties or their Subsidiaries with respect to the
ocean shipping business in the Puerto Rico trade lanes.



     “Securities Account Control Agreement” shall mean an agreement among a Credit Party, a
securities intermediary, and the Administrative Agent, which agreement is in a form reasonably
acceptable to the Administrative Agent and the securities intermediary and which provides the
Administrative Agent with “control” (as such term is used in Articles 8 and 9 of the UCC) over the
securities account(s) described therein (which control is exercisable upon the occurrence and
continuance of an Event of Default), as the same may be as amended, modified, extended, restated,
replaced, or supplemented from time to time.



     1.2 Deleted Definitions. The definitions of “Additional Loan”, “Incremental
Facility”, “Incremental Revolver” and “Incremental Term Loan” are hereby deleted from Section 1.1
of the Credit Agreement.



     1.3 Amendments to Definition of Applicable Percentage. The definition of “Applicable
Percentage” set forth in Section 1.1 of the Credit Agreement is hereby amended in the following
respects:




     (a) The pricing grid contained therein is hereby amended and restated in its entirety
to read as follows:



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






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     (b) A new sentence is hereby added to the end of such definition to read as follows:




     Notwithstanding the foregoing, the Applicable Percentage shall be as set forth
above opposite Level III beginning on the First Amendment Effective Date through
(but not including) the first Interest Determination Date after the First Amendment
Effective Date.



     1.4 Amendment to Definition of Consolidated EBITDA. The definition of Consolidated
EBITDA set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




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



3









 







compensation programs solely in order to make withholding tax payments, (xiv) expenses
incurred as a result of the Share Repurchase Program (but excluding the actual cost of any
share repurchase), (xv) the amount of any non-controlling (minority) interest expense
attributable to non-controlling (minority) equity interests of the Credit Parties and their
Subsidiaries in any joint venture thereof, (xvi) any cash or non-cash charges for such
period relating to the Puerto Rico Settlement and lawsuits of claimants that opt out of the
class action lawsuits that are subject to the Puerto Rico Settlement, or the DOJ
Investigation; provided that the aggregate amount of such cash and non-cash charges shall
not exceed $25,000,000 (net of any insurance proceeds received in connection therewith)
during the term of this Agreement and (xvii) legal and professional fees and expenses
incurred by the Credit Parties during such period relating to Litigation Matters in an
aggregate amount not to exceed (A) $15,000,000 during any twelve-month period and (B)
$25,000,000 during the term of this Agreement; minus (c) non-cash charges and
non-cash expenses previously added back to Consolidated Net Income in determining
Consolidated EBITDA (including non-cash charges with respect to Litigation Matters added
back to Consolidated Net Income pursuant to clause (b)(iv) above) to the extent such
non-cash charges and non-cash expenses have become cash charges and cash expenses during
such period; minus (d) any extraordinary cash gains, extraordinary non-cash gains
and other non-cash gains during such period; minus (e) the amount of any
non-controlling (minority) interest income attributable to non-controlling (minority) equity
interests of the Credit Parties and their Subsidiaries in any joint venture thereof to the
extent included in the calculation of Consolidated Net Income.



     1.5 Amendment to Definition of Consolidated Net Income. The definition of
Consolidated Net Income set forth in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:




     “Consolidated Net Income” shall mean, as of any date of determination for any
period ending on such date, the net income or loss (excluding extraordinary losses and gains
and all non-cash income expense, interest income and tax credits) of the Credit Parties and
their Subsidiaries on a Consolidated basis for such period, all as determined in accordance
with GAAP.



     1.6 Amendment to Definition of Restricted Payment. The definition of Restricted
Payment set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




     “Restricted Payment” shall mean (a) any dividend or other distribution, direct
or indirect, on account of any shares (or equivalent) of any class of Capital Stock of any
Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares (or equivalent) of any class of Capital Stock of any Credit Party
or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of any Credit Party or any of its Subsidiaries, now or
hereafter outstanding, (d) any payment with respect to any earn out



4









 







obligation, (e) any payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Subordinated Debt of any Credit Party or any of its Subsidiaries, (f) the payment by
any Credit Party or any of its Subsidiaries of any management, advisory or consulting fee to
any Person or the payment of any extraordinary salary, bonus or other form of compensation
to any Person who is directly or indirectly a significant partner, shareholder, owner or
executive officer of any such Person, to the extent such extraordinary salary, bonus or
other form of compensation is not included in the corporate overhead of such Credit Party or
such Subsidiary, (g) any cash payment with respect to Indebtedness convertible into Capital
Stock due upon the conversion thereof and (h) any prepayment of principal or any redemption,
purchase, retirement, defeasance, sinking fund or similar payment prior to maturity with
respect to any unsecured Indebtedness, Indebtedness convertible into Capital Stock or other
Indebtedness junior to the Loans of any Credit Party or any of its Subsidiaries.



     1.7 Amendment to Definition of Transaction Costs. The definition of Transaction Costs
set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:




     “Transaction Costs” shall mean the fees and expenses incurred by the Borrower
and its Subsidiaries in connection with (a) the Transactions and (b) the First Amendment.



     1.8 Amendment to Section 2.5. Section 2.5 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:




     Section 2.5 [Reserved].



     1.9 Amendment to Section 4.2. Subsection (g) contained in Section 4.2 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:




     (g) [Reserved].



     1.10 Amendment to Section 5.14. The last sentence contained in Section 5.14(a) of the
Credit Agreement is hereby amended and restated in its entirety to read as follows:




     Without limiting the foregoing, the Credit Parties hereby agree that upon entering into
any Bank Product after the Closing Date, they will execute, deliver and cause to be recorded
an amendment to the Vessel Fleet Mortgage as reasonably requested by the Administrative
Agent.



     1.11 Amendment to Section 6.1. Section 6.1 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:



5









 






     Section 6.1 Consolidated Senior Secured Leverage Ratio.




     The Consolidated Senior Secured Leverage Ratio for the twelve (12) month period ending
as of each fiscal quarter end shall be less than or equal to (a) at all times from the
Closing Date through and including the fiscal quarter ended on or around September 30, 2009,
3.00 to 1.00 and (b) at all times thereafter, 2.75 to 1.00.



     1.12 Amendment to Section 7.1. Subsection (e) contained in Section 7.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:




     (e) Indebtedness and obligations owing under Bank Products (including, without
limitation, Secured Hedging Agreements and other Hedging Agreements entered into not for
speculative purposes);



     1.13 Amendment to Section 7.10. Subsection (f) contained in Section 7.10 of the
Credit Agreement is hereby amended and restated in its entirety to read as follows:




     (f) to make any other Restricted Payments; provided that, on a Pro Forma Basis
after giving effect to any such Restricted Payment, (i) no Default or Event of Default shall
exist or would result therefrom, (ii) there shall be at least $20,000,000 of Accessible
Borrowing Availability, (iii) if such Restricted Payment is a dividend or other
distribution, direct or indirect, on account of any shares (or equivalent) of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter outstanding,
(A) the Consolidated Senior Secured Leverage Ratio shall be less than 2.50 to 1.00 and (B)
the aggregate amount of all such dividends and distributions during any twelve-month period
shall not exceed $14,000,000 and (iv) if such Restricted Payment is not a dividend or
distribution subject to clause (iii) above, the Consolidated Senior Secured Leverage Ratio
shall be less than 1.50 to 1.00.



     1.14 Amendment to Article VII. A new Section 7.14 is hereby added at the end of
Article VII of the Credit Agreement to read as follows:



     Section 7.14 Account Control Agreements; Bank Accounts.




     (a) Within sixty (60) days after the First Amendment Effective Date (or such extended
period of time as agreed to by the Administrative Agent), the Administrative Agent shall
have received evidence satisfactory to the Administrative Agent that the cash concentration
account and the money market account of Horizon Lines, LLC held at JPMorgan Chase Bank, N.A.
are subject to a Deposit Account Control Agreement and a Securities Account Control
Agreement, respectively, or have been closed (with the funds and financial assets contained
in such accounts having been transferred to a deposit account that is subject to a Deposit
Account Control Agreement or a securities account that is subject to a Securities Account
Control Agreement).




     (b) Subject to the terms of Section 7.14(a), each of the Credit Parties will not, nor
will it permit any Subsidiary to, open, maintain or otherwise have any checking,



6









 







savings or other accounts (including securities accounts) at any bank or other
financial institution, or any other account where cash or Cash Equivalents is or may be
deposited or maintained with any Person, other than (i) deposit accounts that are subject to
a Deposit Account Control Agreement, (ii) securities accounts that are subject to a
Securities Account Control Agreement, (iii) deposit accounts established solely as payroll,
zero balance and imprest accounts and (iv) other deposit accounts, so long as (A) the
balance of each such account is transferred to a deposit account that is subject to a
Deposit Account Control Agreement not less than once during every ten (10) business days and
(B) the balance in any such account does not exceed $4,000,000 at any time and the balance
in all such accounts does not exceed $10,000,000 at any time.



     1.15 Amendments to Section 8.1. Section 8.1(f) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:




     (f) Judgment Default. (i) One or more judgments, decrees, settlements or fines
(individually a “Judgment” and collectively the “Judgments”) shall be
entered by or entered or levied against a Credit Party or any of its Subsidiaries relating
to the Puerto Rico Settlement (other than Judgments with respect to lawsuits of claimants
that opt out of the class action lawsuits that are subject to the Puerto Rico Settlement)
and shall require aggregate cash payments in excess of $20,000,000; (ii) one or more
Judgments (other than Judgments referenced in clause (i)) shall be entered by or entered or
levied against a Credit Party or any of its Subsidiaries involving in the aggregate for all
such Judgments a liability (to the extent not covered by insurance) of $15,000,000 or more,
and all such Judgments shall not have been paid and satisfied in full, vacated, discharged
in full, stayed or bonded pending appeal within 45 days from the entry thereof;
provided that, in the event any such Judgment with respect to the DOJ Investigation
allows for payment or other satisfaction over a period greater than 45 days, such Judgment
shall not constitute an Event of Default hereunder if (A) the amount of cash payments with
respect to such Judgment does not exceed (1) $10,000,000 in the aggregate during any fiscal
year of the Borrower and (2) $30,000,000 in the aggregate for all such cash payments, and
(B) each payment with respect to such Judgment is made within 15 days of the due date with
respect to such payment; (iii) any injunction, temporary restraining order or similar decree
shall be issued against a Credit Party or any of its Subsidiaries that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect; or (iv) any
default or event of default shall occur under Section 5.10(h) (judgment default) or any
successor section of the Indenture, dated as of August 8, 2007, between the Borrower, as
issuer, and The Bank of New York Trust Company, N.A., as trustee, relating to the 2007
Senior Unsecured Convertible Notes; or



     1.16 Amendments to Section 9.12. The words “or Incremental Facility” appearing in the
last sentence of Section 9.12 of the Credit Agreement are hereby deleted in their entirety .



ARTICLE II

REVOLVING COMMITTED AMOUNT




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     Pursuant to Section 2.7(a) of the Credit Agreement, the Borrower hereby elects to permanently
reduce the Revolving Committed Amount to TWO HUNDRED TWENTY FIVE MILLION DOLLARS ($225,000,000).
The Credit Parties and the Administrative Agent, on behalf of the Lenders, hereby agree that, after
giving effect to this Amendment (a) the notice requirement set forth in Section 2.7(a) for any
voluntary reduction of the Revolving Committed Amount is hereby waived, (b) the Revolving Committed
Amount shall be reduced to $225,000,000 and (c) the Revolving Commitments of each Revolving Lender
shall be reduced pro rata to accommodate such reduction of the Revolving Committed Amount in
accordance with Section 2.12(a) of the Credit Agreement.



ARTICLE III

CONDITIONS TO EFFECTIVENESS




     3.1 Closing Conditions. This Amendment shall become effective as of the day and year
set forth above (the “Amendment Effective Date”) upon satisfaction of the following
conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):




     (a) Executed Amendment. The Administrative Agent shall have received a copy of
this Amendment duly executed by each of the Credit Parties and the Administrative Agent, on
behalf of the Lenders.




     (b) Executed Lender Consents. The Administrative Agent shall have received
executed consents, in substantially the form of Exhibit A attached hereto (each a
“Lender Consent”), from the Required Lenders (including Revolving Lenders holding in
the aggregate more than 50% of the outstanding Revolving Commitments) authorizing the
Administrative Agent to enter into this Amendment on their behalf. The delivery by the
Administrative Agent of its signature page to this Amendment shall constitute conclusive
evidence that the consents from the Required Lenders have been obtained.




     (c) Default. After giving effect to this Amendment, no Default or Event of
Default shall exist.




     (d) Fees and Expenses.




     (i) The Administrative Agent shall have received from the Borrower, for the
account of each Lender that executes and delivers a Lender Consent to the
Administrative Agent by 5 p.m. (EST) on or before May 28, 2009 (each such Lender, a
“Consenting Lender”, and collectively, the “Consenting Lenders”), an
amendment fee in an amount equal to 50 basis points on (A) the aggregate Revolving
Commitment of such Consenting Lender (prior to giving effect to the reduction in the
Revolving Committed Amount contemplated by Article II hereof) and (B) the
outstanding principal amount of the Term Loan held by such Consenting Lenders.



8









 






     (ii) The Administrative Agent and Wachovia Capital Markets, LLC and Banc of
America Securities LLC, as joint lead arrangers (collectively, the “Lead
Arrangers”), shall have received from the Borrower such other fees and expenses
that are payable in connection with the consummation of the transactions
contemplated hereby and Moore & Van Allen PLLC shall have received from the Borrower
payment of all outstanding fees and expenses previously incurred and all fees and
expenses incurred in connection with this Amendment.




     (e) Puerto Rico Settlement. The Administrative Agent shall have received a
copy of the settlement agreement with respect to the Puerto Rico Settlement (which shall not
differ in any material respects from the final, fully executed settlement agreement), in
form and substance reasonably acceptable to the Administrative Agent (which acceptance shall
not be unreasonably withheld or delayed), which settlement agreement shall limit the cash
payment liabilities and obligations of the Credit Parties and their Subsidiaries with
respect to the Puerto Rico Settlement to no more than $20,000,000 (it being understood and
agreed that the final, fully executed settlement agreement shall be delivered to the
Administrative Agent promptly upon becoming available).




     (f) Organizational Documents. The Administrative Agent shall have received:




     (i) Articles and Bylaws. A certificate of a secretary or
assistant secretary of the Borrower (in form and substance reasonably
satisfactory to the Administrative Agent) certifying that the articles of
incorporation, bylaws and/or other organizational documents, as applicable,
of each Credit Party that were delivered on the Closing Date (as defined in
the Credit Agreement) or the date on which any Credit Party was joined as a
Guarantor pursuant to the terms of the Credit Agreement (the “Joinder
Date”), or certified updates as applicable, remain true and correct and
in force and effect as of the Amendment Effective Date.




     (ii) Resolutions. A copy of resolutions of the board of
directors of the Borrower approving and adopting this Amendment, the
transactions contemplated herein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of the Borrower
(pursuant to a secretary’s certificate in form and substance reasonably
satisfactory to the Administrative Agent) as of the Amendment Effective Date
to be true and correct and in force and effect as of such date.




     (iii) Good Standing. A copy of certificates of good standing,
existence or its equivalent with respect to each Credit Party certified as
of a recent date by the appropriate Governmental Authorities of the state of
its incorporation or organization.




     (iv) Incumbency. A certificate of a secretary or assistant
secretary of the Borrower (in form and substance reasonably satisfactory



9









 







to the Administrative Agent) certifying that each Person listed in the
incumbency certification contained in the Borrower’s Secretary’s Certificate
delivered on the Closing Date remains the duly elected and qualified officer
of the Borrower indicated in such Secretary’s Certificate.




     (g) Legal Opinion. The Administrative Agent shall have received an opinion of
counsel for the Borrower, dated the Amendment Effective Date and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably acceptable to the
Administrative Agent.




     (h) Miscellaneous. All other documents and legal matters in connection with
the transactions contemplated by this Amendment shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel.



ARTICLE IV

MISCELLANEOUS




     4.1 Amended Terms. On and after the Amendment Effective Date, all references to the
Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as
amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit
Agreement is hereby ratified and confirmed and shall remain in full force and effect according to
its terms.



     4.2 Representations and Warranties of Credit Parties. Each of the Credit Parties
represents and warrants as follows:




     (a) It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.




     (b) This Amendment has been duly executed and delivered by such Person and constitutes
such Person’s legal, valid and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights
generally and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).




     (c) No consent, approval, authorization that has not been obtained, or order of, or
filing, registration or qualification with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance by such Person
of this Amendment.




     (d) The representations and warranties set forth in Article III of the Credit Agreement
(i) that contain a materiality qualification are true and correct as of the date hereof and
(ii) that do not contain a materiality qualification are true and correct in all material
respects as of the date hereof, in each case except for those which expressly relate to an
earlier date.



10









 






     (e) After giving effect to this Amendment, no event has occurred and is continuing
which constitutes a Default or an Event of Default.




     (f) The Security Documents continue to create a valid security interest in, and Lien
upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders,
which security interests and Liens are perfected in accordance with the terms of the
Security Documents and prior to all Liens other than Permitted Liens.




     (g) The Credit Party Obligations are not reduced or modified by this Amendment and are
not subject to any offsets, defenses or counterclaims.



     4.3 Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies the
Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit
Agreement applicable to it and (b) that it is responsible for the observance and full performance
of its respective Credit Party Obligations.



     4.4 Credit Document. This Amendment shall constitute a Credit Document under the
terms of the Credit Agreement.



     4.5 Expenses. The Borrower agrees to pay all reasonable costs and out-of-pocket
expenses of the Administrative Agent in connection with the preparation, execution and delivery of
this Amendment, including without limitation the reasonable fees and expenses of the Administrative
Agent’s legal counsel.



     4.6 Further Assurances. The Credit Parties agree to promptly take such action, upon
the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.



     4.7 Entirety. This Amendment and the other Credit Documents embody the entire
agreement among the parties hereto and supersede all prior agreements and understandings, oral or
written, if any, relating to the subject matter hereof.



     4.8 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of an executed counterpart to this
Amendment by telecopy or other electronic means shall be effective as an original and shall
constitute a representation that an original will be delivered.



     4.9 No Actions, Claims, Etc. As of the date hereof, each of the Credit Parties hereby
acknowledges and confirms that it has no knowledge of any actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in equity, against the
Administrative Agent, the Lead Arrangers, the Bookrunners, the Lenders, or the Administrative
Agent’s, the Lead Arrangers’, the Bookrunners’, or the Lenders’ respective officers, employees,
representatives, agents, counsel or directors arising from any action by such Persons, or failure
of such Persons to act under the Credit Documents on or prior to the date hereof.



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     4.10 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW).



     4.11 Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.



     4.12 General Release. In consideration of the Administrative Agent’s, on behalf of
the Lenders, willingness to enter into this Amendment, each Credit Party hereby releases and
forever discharges the Administrative Agent, the Lead Arrangers, the Bookrunners, the Lenders and
the Administrative Agent’s, the Lead Arrangers’, the Bookrunners’ and the Lender’s respective
predecessors, successors, assigns, officers, managers, directors, employees, agents, attorneys,
representatives, and affiliates (hereinafter all of the above collectively referred to as the
“Released Parties”), from any and all claims, counterclaims, demands, damages,
debts, suits, liabilities, actions and causes of action of any nature whatsoever, including,
without limitation, all claims, demands, and causes of action for contribution and indemnity,
whether arising at law or in equity, whether known or unknown, whether liability be direct or
indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and
whether or not heretofore asserted, which any Credit Party may have or claim to have against any of
the Released Parties in any way related to or connected with the Credit Documents and the
transactions contemplated thereby.



     4.13 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 10.14
and 10.17 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.



     4.14 Reservation of Rights. The Administrative Agent and the Lenders expressly
reserve all rights they may have under the Credit Documents or applicable law with respect to the
Litigation Matters.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





12









 








HORIZON LINES, INC.

FIRST AMENDMENT TO CREDIT AGREEMENT




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



	 	 	 	 	 
	BORROWER:	 	HORIZON LINES, INC.,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	GUARANTORS:	 	HORIZON LOGISTICS, LLC,

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	HORIZON LINES OF PUERTO RICO, INC.,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	HORIZON LINES OF ALASKA, LLC,

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	SEA-LOGIX, LLC,

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary






13









 






	 	 	 	 	 
	 	 	HORIZON LINES, LLC,

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	HORIZON SERVICES GROUP, LLC,

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	HAWAII STEVEDORES, INC.,

a Hawaiian corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	AERO LOGISTICS, LLC, a Delaware limited 

liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary
	 
	 	 	 	 
	 	 	HORIZON LOGISTICS HOLDINGS, LLC, a Delaware 

limited
liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary






14









 






	 	 	 	 	 
	 	 	HORIZON LINES HOLDING CORP.,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Zuckerman
	 

	 	 	 	 
	 

	 	Name: Robert S. Zuckerman
	 

	 	Title: Secretary






15









 






	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender and as Administrative Agent on behalf of the
Lenders
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Andrew G. Payne
	 

	 	 	 	 
	 

	 	Name: Andrew G. Payne
	 

	 	Title: Director







16









 








EXHIBIT A




FORM OF

LENDER CONSENT




See Attached.




 









 






LENDER CONSENT




     This Lender Consent is given pursuant to the Credit Agreement, dated as of August 8, 2007 (as
amended, restated, modified or supplemented from time to time, the “Credit Agreement”), by
and among HORIZON LINES, INC., a Delaware corporation (the “Borrower”), those certain
Subsidiaries of the Borrower party thereto (collectively, the “Guarantors”), the lenders
and other financial institutions from time to time party thereto (the “Lenders”) and
WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders (in such
capacity, the “Administrative Agent”). Capitalized terms used herein shall have the
meanings ascribed thereto in the Credit Agreement unless otherwise defined herein.



     The undersigned hereby approves the First Amendment to Credit Agreement, to be dated on or
about [May ___], 2009, by and among the Borrower, the Guarantors party thereto, and the
Administrative Agent, on behalf of the Lenders (the “Amendment”) and hereby authorizes the
Administrative Agent to execute and deliver the Amendment on its behalf and, by its execution
below, the undersigned agrees to be bound by the terms and conditions of the Amendment and the
Credit Agreement.



     Delivery of this Lender Consent by telecopy or other electronic means shall be effective as an
original.



     A duly authorized officer of the undersigned has executed this Lender Consent as of the ___
day of May, 2009



	 	 	 	 	 	 	 
	 

	 	 	 	 	,	
	 	 	 	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 	 	 	 	 
	 

	 	Title: