Amendment No. 1 to Credit Agreement dated as of September 30, 2004



 Exhibit 10.3 
  
 AMENDMENT NO. 1 
  
 AMENDMENT NO. 1 (this “Amendment”), dated as of September 30, 2004, to that certain Credit Agreement, dated as of July 7, 2004 (the
“Credit Agreement”; capitalized terms used herein and not defined herein shall have the meaning set forth in the Credit Agreement), among Horizon Lines, LLC, a Delaware limited liability company, as borrower
(“Borrower”), UBS AG, Stamford Branch, as administrative agent (the “Administrative Agent”), the lenders from time to time party thereto (the “Lenders”), and the other parties thereto. 

 
 W I T N E S S E
T H: 
  
 WHEREAS, Section 9.2 of the Credit
Agreement permits the Credit Agreement to be amended from time to time; 
  
 NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  
 SECTION ONE Amendment. Section 6.14 of the Credit Agreement shall be
amended by: (i) replacing the “and” appearing immediately before “(b)” in such Section with a comma and (ii) adding, at the end of the sentence appearing in such Section, the following, “and (c) expenditures made during such
fiscal year in respect of a buy-out, acquisition or other purchase of a Chartered Vessel subject to a Chartered Vessel Document that would otherwise be classified as Capital Expenditures shall be deemed not to be Capital Expenditures for such fiscal
year solely for the purposes of this Section 6.14”. 
  
 SECTION TWO Conditions to Effectiveness. This Amendment shall become effective as of the date (the “Effective Date”) when, and only when the Administrative Agent shall have received counterparts of this Amendment
executed by the Borrower and a number of Lenders sufficient to constitute the Required Lenders. The effectiveness of this Amendment (other than Sections Five, Six and Seven hereof) is conditioned upon the accuracy of the representations and
warranties set forth in Section Three hereof. 
  
 SECTION THREE
Representations and Warranties; Covenants. In order to induce the Required Lenders to enter into this Amendment, the Borrower represents and warrants to each of the Lenders that both before and after giving effect to this Amendment: (a) no
Default or Event of Default has occurred and is continuing and (b) all of the representations and warranties in the Credit Agreement are true and complete in all material respects on and as of the date hereof as if made on the date hereof (or, if
any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date). 
  
  

 550257 








 SECTION FOUR Reference to and Effect on the Credit Agreement. On and after the Effective Date,
each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring the Credit Agreement, and each reference in each of the Loan Documents to “the Credit
Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment. The Credit Agreement and each of the other
Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. 
  
 SECTION FIVE Costs and Expenses. Borrower agrees to pay all reasonable
costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, if any (including, without limitation, the reasonable fees
and expenses of Cahill Gordon & Reindel LLP, counsel to the Administrative Agent). 
  
 SECTION SIX Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment. 
  
 SECTION SEVEN Governing Law. THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW). 
  
 [Signature Pages Follow] 
  

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	 HORIZON LINES, LLC, as Borrower

		
	 By:
	 	 /s/ Michael T. Avara


	 Name:
	 	 Michael T. Avara

	 Title:
	 	 Treasurer



  
  
  
  
  

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	 HARBOUR TOWN FUNDING LLC, as Lender

		
	 By:
	 	 /s/ DIANA M. HIMES


	 Name:
	 	 DIANA M. HIMES

	 Title:
	 	 ASSISTANT VICE PRESIDENT



  
  

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	 ABN AMRO Bank NV, as Lender

		
	 By:
	 	 /s/ Angela Noique


	 Name:
	 	 Angela Noique

	 Title:
	 	 Director

		
	 By:
	 	 /s/ John M. Pastore


	 Name:
	 	 John M. Pastore

	 Title:
	 	 Vice President



  
  

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	 Sankaty Advisors, LLC as Collateral
 Manager for AVERY POINT CLO,
 LTD., as Term Lender, as Lender

		
	 By:
	 	 /s/ Diane Exter


	 Name:
	 	 Diane Exter

	 Title:
	 	 Managing Director/Portfolio Manager











			
	 SANKATY ADVISORS, LLC AS COLLATERAL MANAGER FOR
 RACE POINT CLO, LIMITED, AS TERM LENDER

		
	 By:
	 	 /s/ Diane Exter


	 Name:
	 	 Diane Exter

	 Title:
	 	 Managing Director/Portfolio Manager



  

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	 Sankaty Advisors, LLC as Collateral
 Manager for Race Point II CLO,
 Limited, as Term Lender, as Lender

		
	 By:
	 	 /s/ Diane Exter


	 Name:
	 	 Diane Exter

	 Title:
	 	 Managing Director/Portfolio Manager











			
	 SANKATY ADVISORS, LLC AS COLLATERAL MANAGER FOR
 CASTLE HILL II–INGOTS, LTD., AS TERM LENDER

		
	 By:
	 	 /s/ Diane Exter


	 Name:
	 	 Diane Exter

	 Title:
	 	 Managing Director/Portfolio Manager



  
  

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	 AVENUE CLO FUND, LIMITED, as Lender

		
	 By:
	 	 /s/ RICHARD D’ADDARIO


	 Name:
	 	 RICHARD D’ADDARIO

	 Title:
	 	 SENIOR PORTFOLIO MANAGER



  
  

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	 SRF 2000, INC., as Lender

		
	 By:
	 	 /s/ DIANA M. HIMES


	 Name:
	 	 DIANA M. HIMES

	 Title:
	 	 ASSISTANT VICE PRESIDENT



  

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	 Fidelity Advisor Series II: Fidelity Advisor
 Floating Rate High Income Fund, as Lender

		
	 By:
	 	 /s/ John H. Costello


	 Name:
	 	 John H. Costello

	 Title:
	 	 Assistant Treasurer



  
  

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	 Ballyrock CLO II Limited, By: Ballyrock
 Investment Advisors LLC, as Collateral
 Manager, as Lender

		
	 By:
	 	 /s/ Lisa Rymut


	 Name:
	 	 Lisa Rymut

	 Title:
	 	 Assistant Treasurer



  

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	 Ballyrock CDO I Limited, By: Ballyrock
 Investment Advisors LLC, as Collateral
 Manager, as Lender

		
	 By:
	 	 /s/ Lisa Rymut


	 Name:
	 	 Lisa Rymut

	 Title:
	 	 Assistant Treasurer



  

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	 PPM SPYGLASS FUNDING TRUST, as Lender

		
	 By:
	 	 /s/ Diana M. Himes


	 Name:
	 	 DIANA M. HIMES

	 Title:
	 	 AUTHORIZED AGENT



  
  

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	 PPM MONARCH BAY FUNDING LLC, as Lender

		
	 By:
	 	 /s/ Diana M. Himes


	 Name:
	 	 DIANA M. HIMES

	 Title:
	 	 ASSISTANT VICE PRESIDENT



  

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	 HUDSON STRAITS CLO 2004, LTD.
 By Royal Bank of Canada as Collateral Manager

		
	 By:
	 	 /s/ Melissa Marano


	 Name:
	 	 Melissa Marano

	 Title:
	 	 Authorized Signatory



  

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	 TRS CALLISTO LLC, as Lender

		
	 By:
	 	 /s/ Alice L. Wagner


	 Name:
	 	 Alice L. Wagner

	 Title:
	 	 Vice President











			
	Addison CDO, Limited
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  
  

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	Jissekikun Funding, Ltd.
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  
  

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	Loan Funding III LLC
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	 Mohan V. Phansalkar
 Managing
Director



  

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	SEQUILS-MAGNUM, LTD.
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  

 -4- 









			
	Southport CLO, Limited
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  

 -4- 









			
	Waveland – INGOTS, LTD.
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  

 -4- 









			
	Wrigley CDO, Ltd.
		
	 By:
	 	 Pacific Investment Management Company LLC,
 as its Investment Advisor

		
	 By:
	 	 /s/ Mohan V. Phansalkar


	 	 	Mohan V. Phansalkar
	 	 	Managing Director


  

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	Clydesdale CLO 2004, Ltd., as Lender
		
	 By:
	 	 /s/ Elizabeth MacLean


	 Name:
	 	Elizabeth MacLean
	 Title:
	 	Director
	
	 NOMURA CORPORATE RESEARCH
 AND
ASSET MANAGEMENT INC.
 AS
 INVESTMENT
ADVISER



  

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	Clydesdale CLO 2001-1, Ltd., as Lender
		
	By:	 	 /s/ Elizabeth MacLean


	Name:	 	Elizabeth MacLean
	Title:	 	Director
	 	 	 
	 NOMURA CORPORATE RESEARCH
 AND
ASSET MANAGEMENT INC.
 AS
 COLLATERAL
MANAGER



  

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	 ARUM CLO 2002-1 LTD., by Columbia
 Management Advisors, Inc. as Investment Manager,
 as a Lender

		
	 By:
	 	 /s/ MARK PELLETIER


	 Name:
	 	 MARK PELLETIER

	 Title:
	 	 DIRECTOR











			
	 Franklin CLO I, Limited,
 as Lender

		
	 By:
	 	 /s/ DAVID ARDINI


	 Name:
	 	 DAVID ARDINI

	 Title:
	 	 VICE PRESIDENT



  

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	 Franklin CLO II, Limited,
 as Lender

		
	 By:
	 	 /s/ DAVID ARDINI


	 Name:
	 	 DAVID ARDINI

	 Title:
	 	 VICE PRESIDENT



  

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	 Franklin CLO III, Limited,
 as Lender

		
	 By:
	 	 /s/ DAVID ARDINI


	 Name:
	 	 DAVID ARDINI

	 Title:
	 	 VICE PRESIDENT



  

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	 FRANKLIN CLO IV, LIMITED,
 as Lender

		
	 By:
	 	 /s/ DAVID ARDINI


	 Name:
	 	 DAVID ARDINI

	 Title:
	 	 VICE PRESIDENT



  

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	 FRANKLIN FLOATING RATE DAILY ACCESS FUND,
 as Lender

		
	 By:
	 	 /s/ Richard Hsu


	 Name:
	 	 Richard Hsu

	 Title:
	 	 Vice President



  

 -4- 









			
	 Franklin Floating Rate Trust,
 as Lender

		
	 By:
	 	 /s/ Richard Hsu


	 Name:
	 	 Richard Hsu

	 Title:
	 	 Vice President



  

 -4- 









			
	Franklin Floating Rate Master Series, as Lender
		
	 By:
	 	 /s/ Richard Hsu


	 Name:
	 	 Richard Hsu

	 Title:
	 	 Vice President



  

 -4- 









			
	 SECURITY INCOME FUND-INCOME
 OPPORTUNITY SERIES, as Lender
 By: Four Corners Capital Management
 LLC, as Collateral Manager

		
	 By:
	 	 /s/ STEVEN COLUMBARO


	 Name:
	 	 STEVEN COLUMBARO

	 Title:
	 	 Vice President



  

 -4- 









			
	 FORTRESS PORTFOLIO TRUST, as Lender

	 By: Four Corners Capital Management
 LLC, as Collateral Manager

		
	 By:
	 	 /s/ STEVEN COLUMBARO


	 Name:
	 	 STEVEN COLUMBARO

	 Title:
	 	 Vice President



  

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	 FIRST TRUST/FOUR CORNERS
 SENIOR FLOATING RATE INCOME
 FUND II, as Lender

	 By: Four Corners Capital Management
 LLC, as Collateral Manager

		
	 By:
	 	 /s/ STEVEN COLUMBARO


	 Name:
	 	 STEVEN COLUMBARO

	 Title:
	 	 Vice President



  

 -4- 









			
	 FIRST TRUST/FOUR CORNERS
 SENIOR FLOATING RATE INCOME
 FUND, as Lender

	 By: Four Corners Capital Management
 LLC, as Collateral Manager

		
	 By:
	 	 /s/ STEVEN COLUMBARO


	 Name:
	 	 STEVEN COLUMBARO

	 Title:
	 	 Vice President



  

 -4- 









			
	 LaSalle Bank, National Association as Lender

		
	 By:
	 	 /s/ Kathleen L. Ross


	 Name:
	 	 Kathleen L. Ross

	 Title:
	 	 Senior Vice President



  

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	 TORONTO DOMINION (NEW YORK), INC.,
 as Lender

		
	 By:
	 	 /s/ MASOOD VIKREE


	 Name:
	 	 MASOOD VIKREE

	 Title:
	 	 VICE PRESIDENT



  

 -4- 









			
	 Metropolitan Life Insurance Company, as Lender

		
	 By:
	 	 /s/ James A. Winott


	 Name:
	 	 James A. Winott

	 Title:
	 	 Managing Director



  

 -4- 









			
	 MetLife Bank N.A., as Lender

		
	 By:
	 	 /s/ Kenneth A. McIntyre


	 Name:
	 	 Kenneth A. McIntyre

	 Title:
	 	 Commercial Loan Officer



  

 -4- 









			
	UBS LOAN FINANCE LLC, as Lender
		
	By:	 	 /s/ Juan Zuriga


	Name:	 	Juan Zuriga
	Title:	 	 Associate Director
 Banking Products Services,
US

		
	By:	 	 /s/ Safloz Sikka


	Name:	 	Safloz Sikka
	Title:	 	 Associate Director
 Banking Products Services,
US



  

 -4- 









			
	UBS AG, STAMFORD BRANCH, as Lender
		
	By:	 	 /s/ Juan Zuriga


	Name:	 	Juan Zuriga
	Title:	 	 Associate Director
 Banking Products Services,
US

		
	By:	 	 /s/ Safloz Sikka


	Name:	 	Safloz Sikka
	Title:	 	 Associate Director
 Banking Products Services,
US



  

 -4- 









			
	 Dryden V-Leveraged Loan CD( 2003,
 By
Prudential Investment Management, Inc., as
 Collateral Manager

		
	By:	 	 /s/ Janet G. Crowe


	Name:	 	Janet G. Crowe
	Title:	 	Vice President


  

 -4- 









			
	WhiteHorse I, Ltd, as Lender
		
	By:	 	 /s/ Ethan M Underwood


	Name:	 	Ethan M Underwood
	Title:	 	Portfolio Manager


  

 -4- 









			
	 Denali Capital LLC, managing member of
 DC
Funding Partners, portfolio manager for
 DENALI CAPITAL CLO III, LTD., or an affiliate

		
	By:	 	 /s/ Kelli C. Marti


	Name:	 	Kelli C. Marti
	Title:	 	VICE PRESIDENT


  

 -4- 









			
	 Denali Capital LLC, managing member of
 DC
Funding Partners, portfolio manager for
 DENALI CAPITAL CLO IV, LTD., or an affiliate

		
	By:	 	 /s/ Kelli C. Marti


	Name:	 	Kelli C. Marti
	Title:	 	Vice President


  

 -4- 









			
	 Carlyle High Yield Partners II, Ltd.
 [INSERT NAME OF LENDER], as Lender

		
	By:	 	 /s/ Linda Pace


	Name:	 	Linda Pace
	Title:	 	Managing Director


  

 -4- 









			
	
	Carlyle High Yield Partners VI, Ltd., as Lender
		
	 By:
	 	 /s/ Linda Pace


	 Name:
	 	Linda Pace
	 Title:
	 	Managing Director


  
  

 -4- 









			
	 General Electric Capital Corporation, as Lender

		
	 By:
	 	 /s/ Robert M Kadlick


	 Name:
	 	 Robert Kadlick

	 Title:
	 	 Duly Authorized Signatory



  

 -4- 









			
	 BUSHNELL CBNA LOAN FUNDING LLC, as Lender

		
	 By:
	 	 /s/ JANET HAACK


	 Name:
	 	JANET HAACK
	 Title:
	 	AS ATTORNEY-IN-FACT


  
  

 -4- 









			
	 FEINGOLD O’KEEFFE CAPITAL LLC, as Lender

		
	 By:
	 	 /s/ SCOTT DORSI


	 Name:
	 	 SCOTT DORSI

	 Title:
	 	 PRINCIPAL



  
  

 -4- 









			
	 WESTERN ASSET FLOATING RATE HIGH
 INCOME FUND LLC, as Lender

		
	 By:
	 	 /s/ Western Asset Floating Rate High Income Fund LLC


	 Name:
	 	 
	 Title:
	 	 


  

 -4- 









			
	 New Alliance Global CDO, Limited, as Lender

	
	 By: Alliance Capital Management L.P., as Sub-Advisor

	
	 By: Alliance Capital Management Corporation,
 as General Partner

		
	 By:
	 	 /s/ Sverker Johansson


	 Name:
	 	 Sverker Johansson

	 Title:
	 	 Vice President



  

 -4- 









			
	Hewett’s Island CLO II, Ltd.
	 By: CypressTree Investment Management
 Company, Inc., as Portfolio Manager

	
	 /s/ Jeffrey Megar


	 Name:
	 	 Jeffrey Megar

	 Title:
	 	 Managing Director



  

 -3- 









			
	 NATIONAL CITY BANK, as Lender

		
	 By:
	 	 /s/ Theresa Marie Smith


	 Name:
	 	 Theresa Marie Smith

	 Title:
	 	 Senior Vice President



  

 -4- 









			
	 LCM I Limited Partnership

		
	 By:
	 	 Lyon Capital Management LLC,
 as Collateral Manager,
as Lender

		
	 By:
	 	 /s/ Farboud Tavangar


	 Name:
	 	 Farboud Tavangar

	 Title:
	 	 LYON CAPITAL MANAGEMENT LLC

	 	 	 Senior Portfolio Manager



  

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	 STANFIELD MODENA CLO, LTD.

		
	 By:
	 	 Stanfield Capital Partners LLC
 as its Asset Manager
 as Lender

		
	 By:
	 	 /s/ Christopher E. Jansen


	 Name:
	 	 Christopher E. Jansen

	 Title:
	 	 Managing Partner



  

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	 Landmark IV CDO, Limited as Lender

		
	 By:
	 	 /s/ Alex Baldwin


	 Name:
	 	 Alex Baldwin

	 Title:
	 	 Authorized Signatory



  

 -4- 









			
	 PROTECTIVE LIFE INSURANCE
 COMPANY, as Lender

		
	 By:
	 	 /s/ Diane S. Griswold


	 Name:
	 	 Diane S. Griswold

	 Title:
	 	 AVP



  

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	 GOLDMAN SACHS CREDIT PARTNERS L.P., as Lender

		
	 By:
	 	 /s/ Pedro Ramirez


	 Name:
	 	 Pedro Ramirez

	 Title:
	 	 Authorized Signatory



  

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	 GOLDMAN SACHS CREDIT PARTNERS
 L.P., as Lender

		
	 By:
	 	 /s/ Elizabeth Fischer


	 Name:
	 	 Elizabeth Fischer

	 Title:
	 	 Authorized Signatory



  

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