Document:

EX-10.52

 MELINDA HAAG (CABN 132612) 
 United States Attorney 
 MIRANDA KANE (CABN 150630) 

Chief, Criminal Division 
 STACEY P. GElS (CABN
181444) 
 OWEN P. MARTIKAN (CABN 177104) 
 Assistant United States Attorneys 
 450 Golden Gate Ave., Box 36055 

San Francisco, California 94102 
 Telephone: (415) 436-7200 
 Fax: (415) 436-7234 

E-Mail: Stacey.Geis@usdoj.gov 
     Owen.Martikan@usdoj.gov 
 Attorneys for the United States of America

 UNITED STATES DISTRICT COURT 
 NORTHERN DISTRICT OF CALIFORNIA 
 SAN FRANCISCO DIVISION 

 

					
	UNITED STATES OF AMERICA,	 	)	  	No.
		 	)	  	
	 Plaintiff,
	 	)	  	PLEA AGREEMENT
		 	)	  	
	 v.
	 	)	  	
		 	)	  	
	HORIZON LINES, LLC,	 	)	  	
		 	)	  	
	 Defendant.
	 	)	  	
	  
	 	)	  	

 Defendant HORIZON LINES, LLC (“Horizon”), and the United States Attorney’s Office for the
Northern District of California (hereafter “the government”) enter into this written plea agreement (the “Agreement”) pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure: 

The Defendant’s Promises 
 1. Horizon agrees to plead guilty to both counts of the captioned Information charging it with making false writings, in violation of 18 U.S.C. § 1001(a)(3). Horizon agrees that the elements of the
offense are as follows: (1) Horizon, by and through the actions of its 

  
 PLEA AGREEMENT 

 
agents and/or employees, used a writing or document that contained a false statement in a matter within the jurisdiction of the United States Coast Guard; (2) Horizon, by and through the
actions of its agents and/or employees, acted knowingly and willfully, that is deliberately and with knowledge that the writing or document was untrue; and (3) the writing or document was material to the United States Coast Guard’s
activities or decisions. 
 2. Horizon acknowledges that under U.S. principles of corporate liability and respondeat
superior, a corporate defendant is liable for the actions of its agents or employees while acting within the scope of their agency and employment and for the benefit of the corporation. Horizon agrees that by entering these guilty pleas it
admits that it is in fact guilty of the offenses to which it is pleading guilty which were committed by its agents, in this case crew members of the SS Horizon Enterprise, acting within the scope of their agency, and that there is a sufficient
factual basis for its guilty pleas. 
 3. Horizon agrees that the maximum penalties for each charged violation are as follows:

  

							
	 	  	 	    	 	    	 
	a.	  	Maximum fine	    	$500,000/count, or twice the gross gain or loss resulting from the unlawful conduct	    
	  
 b.
	  	  
 Maximum probation term
	    	  
 5 years
	    
	  
 c.
	  	  
 Mandatory special assessment
	    	  
 $400/count
	    

 4. Horizon agrees that it is guilty of the offenses to which it will plead guilty, and agrees that the
following facts are true: 
 a. Horizon, a Delaware limited liability company headquartered in Charlotte, North Carolina, is a
domestic shipping company that operates container vessels engaged in shipping cargo among domestic ports and ports in Puerto Rico. These container vessels each typically carry officers and crew totaling between 25 to 30 persons. The engineering
staff includes a Chief Engineer, who supervises an engine department consisting of other licensed engineers and crew men. 
 b.
Engine department operations on container vessels such as the SS Horizon Enterprise generate large quantities of oily waste from leaks and drips from the engine’s 

  

					
	PLEA AGREEMENT	 	2	 	

 
lubrication and fuel systems. This waste oil, combined with water, detergents, solvents, and other wastes, accumulates in the bottom or the “bilges” of the vessel. This oily bilge waste
must be processed through a pollution control device known as an Oily Water Separator (“OWS”) designed to treat the bilge waste in order to achieve the limitations imposed by international treaties and the laws and regulations of the
United States. 
 c. The discharge of oily Wastes from ships is regulated by International Treaty and United States laws.
Specifically, the 1973 International Convention for the Prevention of Pollution From Ships and the related Protocol of 1978 (hereinafter referred to as “MARPOL”) is an international treaty implemented in the United States by the Act to
Prevent Pollution from Ships (“APPS”), 33 U.S.C. § 1901 et seq. APPS makes it a crime for any person to knowingly violate MARPOL, APPS, or the federal regulations promulgated under APPS. 33 U.S.C. § 1908(a). These regulations
apply to all commercial vessels when such vessels operate in United States waters or are at a port or terminal under the jurisdiction of the United States. 33 C.F.R. § 151.09. 

d. MARPOL sets the standard for the maximum amount of oil permitted to be discharged overboard from any commercial vessel. Pursuant to
the MARPOL standard, vessels may discharge only those wastes with less than 15 parts per million (“ppm”) oil content without dilution. To ensure that this standard is met, vessels must have equipment on board, such as an Oily Water
Separator (“OWS”), which is designed to treat oily bilge waste and reduce the oil content to below the legal limit, MARPOL also requires vessels to have and maintain an oil sensing device (the “Oil Content Meter”), generally
found on an OWS, that is designed to stop a discharge of a mixture containing more than the legally permitted concentration of 15 ppm oil. When the Oil Content Meter detects more than the allowable parts per million of oil, it redirects that
effluent to a storage tank on board a vessel. 
 e. To monitor compliance with this limitation on oil discharges, MARPOL
requires vessels to maintain an Oil Record Book in which all transfers and discharges of oil and oily wastes are recorded. Consistent with this requirement, and as applied to this case, United States regulations require that each non-tanker vessel
of more than 400 gross tons maintain an 

  

					
	PLEA AGREEMENT	 	3	 	

 
Oil Record Book. Pursuant to MARPOL and United States regulations, the Oil Record Book must contain entries for various engine room operations including the incineration or other disposal of oily
residue and sludge or the discharge overboard or otherwise disposal of bilge waste that has accumulated in machinery spaces. All accidental, emergency, or other exceptional discharges of bilge waste or oil must be recorded in the Oil Record Book
along with the reason for the discharge. Each of these engine room operations, including the overboard discharge of bilge waste, is required to be fully recorded without delay in the Oil Record Book. The entries are to be signed by the person or
persons in charge of the operation and each completed page must be signed by the Captain of the ship. 
 f. The United States
Coast Guard is charged with enforcing the laws of the United States and is empowered to board vessels and conduct inspections and investigations of potential violations. The contents of a vessel’s Oil Record Book, and the operation of its OWS,
are material to the Coast Guard’s performance of its duties. 
 g. Between October 21, 2010, and October 23,
2010, engineers aboard the SS Horizon Enterprise intentionally allowed the flushing valve for the Oil Content Meter to stay open on at least two occasions while the OWS was running, thus intentionally diluting the sample to the meter and allowing
the OWS to release water that potentially exceeded MARPOL guidelines for the discharge of oily waste to be released into the ocean. To disguise this conduct from the Coast Guard, engineers aboard the SS Horizon Enterprise made one false entry in the
ship’s Oil Record Book on October 21, 2010, claiming that oily water had been processed through functioning MARPOL equipment, when in fact the oily water had been run through the OWS at the same time as flushing water was being run through
the Oil Content Meter, in violation of MARPOL. On a separate occasion on October 23, 2010, engineers aboard the SS Horizon Enterprise failed to record the operation of the OWS in the Oil Record Book in violation of MARPOL. The Oil Record Book
containing these false entries or omissions was then presented to Coast Guard inspectors during their inspection of the SS Horizon Enterprise, giving those inspectors the false impression that the ship’s OWS had been operated in accordance with
MARPOL and United States law. The Oil Record Book’s entries are material to the Coast Guard’s performance of its inspection function. Horizon acknowledges that similar conduct occurred on this vessel on occasion going back several years,

  

					
	PLEA AGREEMENT	 	4	 	

 5. Horizon agrees to give up all rights that it would have if it chose to proceed to trial,
including the rights to a jury trial with the assistance of an attorney; to confront and cross-examine government witnesses; to remain silent or testify; to move to suppress evidence or raise any other Fourth or Fifth Amendment claims; to any
further discovery from the government; and to pursue any affirmative defenses and present evidence. Horizon also agrees to waive any challenge to venue. 
 6. Horizon agrees to give up its right to appeal its conviction, the judgment, and orders of the Court. Horizon also agrees to waive any right it may have to appeal any aspect of its sentence. 

7. Horizon agrees to waive any right it may have to file any collateral attack on its conviction or sentence, including a petition under
28 U.S.C. § 2255 or 28 U.S.C. § 2241, or motion under 18 U.S.C. § 3582, at any time in the future after it is sentenced, except for a claim that its constitutional right to the effective assistance of counsel was violated. 

8. Horizon agrees not to ask the Court to withdraw its guilty plea at any time after it is entered, unless the Court declines to accept
the sentence agreed to by the parties. Horizon agrees that the government may withdraw from this Agreement if the Court does not accept the agreed upon-sentence set out below. Horizon agrees that if the Court does not accept the agreed-upon sentence
set out below, the statute of limitations shall be tolled from the date it signed the plea agreement until the date the Court does not accept the Agreement. Horizon further agrees not to ask the Court for a continuance of its sentencing hearing
without the consent of the government. 
 9. Horizon agrees to provide cooperation to the government in its continuing
investigation of possible violations of federal law that may have been committed by other companies or individuals stemming from the events that are the subject of the Information filed in this case and the facts recited in paragraph 4,
supra, including producing relevant documents and working to facilitate the availability of its own employees for interviews that may be requested by the government. 

  

					
	PLEA AGREEMENT	 	5	 	

 Applicability of Sentencing Guidelines 

10. Horizon understands and acknowledges that, at sentencing, the Court is required to consider the United States Sentencing Guidelines,
together with the other sentencing goals set forth in Title 18, United States Code, Section 3553(a). Horizon understands and acknowledges that the United States Sentencing Guidelines, including Chapter Eight that provide guidance for the
sentencing of Horizon, must be considered by the Court. Horizon further understands and acknowledges that Chapter Eight is not applicable to the determination of the appropriate fine in this case, because the offense does not fall under
Section 8C2.1. See Section 2B1.1(c)(3). Accordingly, pursuant to Section 8C2.10, Horizon agrees that Title 18, United States Code, Sections 3553 and 3571 apply to determination of the fine. All other sections of Chapter Eight
of the Sentencing Guidelines that are applicable to Horizon are applicable to this case, including provisions of probation and community service. 
 Sentencing Agreement 
 11. Horizon agrees that a reasonable and appropriate
disposition of this case, applying factors set forth at 18 U.S.C. § 3553(a), is as follows: 
 Horizon shall pay a total
aggregate amount of One Million Five Hundred Thousand Eight Hundred Dollars ($1,500,800.00) as set forth below: 
 a.
Fine. Horizon shall pay a fine of One Million Dollars ($1,000,000.00), according to the following payment schedule: 

i. Horizon shall make a payment of Five Hundred Thousand Dollars ($500,000.00) payable to the “United States District Court
Clerk” within twelve (12) months after the day of sentencing. 
 ii. Horizon shall make a payment of Five Hundred
Thousand Dollars ($500,000.00) payable to the “United States District Court Clerk” within twenty-four (24) months after the day of sentencing. 
 b. Mandatory Special Assessment: Pursuant to 18 U.S.C. § 3013, Horizon will pay an Eight Hundred Dollar ($800.00) mandatory special assessment at the time of sentencing. 

  

					
	PLEA AGREEMENT	 	6	 	

 c. Community Service: Pursuant to Section 8B1.3 of the United States Sentencing
Guidelines and in furtherance of the sentencing principles provided for under 18 U.S.C. § 3553(a), Horizon shall make a community service payment of Five Hundred Thousand Dollars ($500,000.00). On the 60th day after sentencing, the Community
Service payment shall be paid as follows: 
 i. Five Hundred Thousand Dollars ($500,000.00) payable to the “National
Fish & Wildlife Foundation,” taxpayer ID No. 52 138 4139, with reference made to “United States v. Horizon Lines LLC” with its corresponding docket number. The monies shall be used to fund environmental projects,
initiatives, and enforcement activities designed for the benefit, preservation, and restoration of the environment, watersheds, and ecosystems in the Northern District of California, including, but not limited to, the protection, conservation, and
restoration of natural resources in the San Francisco Bay. The funds shall be managed as an endowment or a quasi-endowment designed to provide long-term funding for projects, initiatives, and activities as set forth above. Monies shall be accounted
for to Congress in annual reports required by 16 U.S.C. § 3706(b). The payment shall be made by way of cashier’s check delivered to the National Fish & Wildlife Foundation’s headquarters at 1133 15th Street, N. W., Suite
1100, Washington, D.C. 20005 to the attention of the Chief Financial Officer, or by electronic funds transfer, in accordance with wiring instructions provided in writing by the National Fish & Wildlife Foundation prior to the transfer.

 d. Probation: Horizon agrees to be placed on organizational probation for a term of three (3) years, starting the
day Horizon is sentenced by the Court. The terms of probation shall be: 
 i. No further violations. Horizon agrees that
it shall commit no further criminal violations of federal, state, or local law, including those laws and regulations for which primary enforcement has been delegated to state authorities, and shall conduct all its operations in accordance with the
environmental laws of the United States. 

  

					
	PLEA AGREEMENT	 	7	 	

 ii. Payments. Payment in full of the monetary amounts set forth herein including all
special assessments, fines and restitution and community service. 
 iii. Environmental Compliance Plan. Consistent with
the sentencing policies set forth in United States Sentencing Guideline § 8D1.4, Horizon agrees to develop, adopt, implement and fund the Environmental Compliance Plan (“ECP”) attached hereto as Exhibit A. 

iv. Horizon agrees that during the period of probation, and at all reasonable times and with as reasonable prior notice to the
government as practicable, it will provide the government with full access to its Northern California operations as appropriate within its security and its safety policies and practices, as well as all facilities, employees, and records that are
relevant to monitoring compliance with the terms and conditions of the ECP. 
 v. If Horizon changes its name, the renamed
company shall be obliged to meet all of the obligations of Horizon under this agreement. If Horizon merges with another company, the newly created or merged company shall be obliged to meet all of the obligations of Horizon under this agreement.

 12. Horizon agrees not to commit or attempt to commit any crimes before sentence is imposed; not to intentionally provide
false information to the Court, the Probation Office, or the government; and not to fail to comply with any of the other promises it has made in this Agreement. Horizon agrees that, if it fails to comply with any promises it has made in this
Agreement, then the government will be released from all of its promises in this Agreement, including those set forth in paragraphs 15 and 16 below, but it will not be released from its guilty plea. The parties hereby waive a pre-sentence report and
request that the Court accept this Agreement and sentence defendant at the time of defendant’s entry of its guilty pleas. 

13. Horizon agrees that this Agreement contains all of the promises and agreements between it and the government, and it will not claim
otherwise in the future. 
 14. Horizon agrees that this Agreement binds the U.S. Attorney’s Office for the Northern
District of California only, and does not bind any other federal, state, or local agency. 

  

					
	PLEA AGREEMENT	 	8	 	

 The Government’s Promises 

15. The government agrees not to file any additional charges against the defendant that could be filed as a result of the investigation
that led to the captioned Information. 
 16. The government agrees that the reasonable and appropriate sentence in this case
should be as set forth in paragraph 11 above, unless the defendant violates the Agreement as set forth in paragraphs 11 and 12 above or fails to accept responsibility. 
 The Defendant’s Affirmations 
 17. Horizon represents that this
agreement shall bind Horizon, its successor corporation if any, and any other person or entity that assumes the obligations contained herein (“successors-in-interest”). Horizon, or its successors-in-interest, if applicable, shall provide
the government and the United States Probation Office for the Northern District of California with immediate notice of any name change, change in corporate or individual control, business reorganization, change in ownership, merger, change of legal
status, sale or purchase of assets, divestiture of assets, or similar action affecting their ability to pay the fine or otherwise comply with this Agreement. No change in name, change in corporate or individual control, business reorganization,
change in ownership, merger, change of legal status, sale or purchase of assets, divestiture of assets, or similar action shall alter defendant’s obligations under this Agreement. Horizon shall not engage in any action to seek to avoid the
obligations set forth in this Agreement. 
 18. Horizon understands that its convictions may subject it to various collateral
consequences, including, but not limited to the suspension or revocation of any regulatory licenses or permits Horizon holds and suspension or debarment of Horizon from contracting with the United States or with any office, agency, or department
thereof. By this Agreement, the government makes no representation or promise concerning suspension or revocation of any regulatory licenses or permits or suspension or debarment. In particular, suspension and debarment of organizations convicted
under various federal environmental protection and criminal statutes is a discretionary administrative action solely within the authority of federal contracting agencies. Horizon understands that unanticipated collateral consequences will not serve
as grounds to withdraw Horizon’s guilty plea. 

  

					
	PLEA AGREEMENT	 	9	 	

 19. Horizon represents that it is authorized to enter into this Agreement. On or before the
date of entry and filing of the Agreement, Horizon shall provide to the government and the Court a notarized written statement, certifying that. Horizon is authorized to enter into and comply with all of the provisions of this Agreement. The
resolutions further shall authorize a company representative and Horizon’s counsel to enter into this Agreement, and that all company formalities for such authorizations have been observed. 

20. Horizon confirms that its decision to enter a guilty plea is made knowing the charges that have been brought against it, any possible
defenses, and the benefits and possible detriments of proceeding to trial. Horizon acknowledges that it has entered into this Agreement freely and voluntarily and that it has been fully advised by counsel, and that no threats or promises were made
to induce it to enter into the guilty pleas called for by this Agreement. 
  

							
	Dated: 01/27/2012	 		 	BY	 	 /s/ Michael F. Zendan II

		 		 		 	On Behalf of Horizon Lines, LLC
				
		 		 		 	EXECUTED BY MICHAEL F. ZENDAN II
		 		 		 	ITS SENIOR VICE PRESIDENT, GENERAL COUNSEL
				
		 		 		 	  

		 		 		 	Corporate Representative

  

							
	Dated: 1/27/12	 		 		 	MELINDA HAAG
		 		 		 	United States Attorney
				
		 		 		 	 /s/ Owen P. Martikan

		 		 		 	OWEN P. MARTIKAN
		 		 		 	STACEY GEIS
		 		 		 	Assistant United States Attorneys

 STATE OF NORTH CAROLINA: 
 COUNTY OF MECKLEN BURG: 
 SWORN AND SUBSCRIBED TO BEFORE ME BY MICHAEL F. ZENDAN II 

THIS
27th DAY OF JANUARY, 2012 

SANDRA L. FRAZIER 
  

 

  

					
	PLEA AGREEMENT	 	10	 	

 I have fully explained to my client all the rights that a criminal defendant has and all the
terms of this Agreement. In my opinion, my client understands all the terms of this Agreement and all the rights it is giving up by pleading guilty, and, based on the information now known to me, its decision to plead guilty is knowing and
voluntary. 
  

									
	Dated: January 27, 2012	 		 		 		 	 /s/ John Cox

		 		 		 		 	JOHN COX
		 		 		 		 	Attorney for Horizon Lines, LLC.

  

					
	PLEA AGREEMENT	 	11EX-10.53

 Exhibit 10.53 
 SETTLEMENT AGREEMENT 
 This agreement
(“Settlement Agreement”) is made and entered into as of the 23rd day of November 2011, by and between the Horizon Entities (as defined herein) and the Settling Claimants (as defined herein) to resolve claims, as set forth more fully herein, that the Settling Claimants
may have against the Horizon Entities. The Horizon Entities and the Settling Claimants collectively constitute the “Parties” to the Settlement Agreement. 
 WHEREAS, various shippers filed class actions against the Horizon Entities that were consolidated under the caption In re Puerto Rico Cabotage Antitrust Litigation, MDL 1960 (the “Class
Action”), in the United States District Court for the District of Puerto Rico (the “Court”); 
 WHEREAS, the
Horizon Entities settled the Class Action and the Court certified a Settlement Class, but the Settling Claimants opted out of the Settlement Class to reserve their rights to pursue claims against the Horizon Entities alleging violations of the
antitrust laws with respect to Puerto Rican Cabotage; 
 WHEREAS, the Settling Claimants have indicated an intention to pursue
claims against the Horizon Entities, and the Horizon Entities would assert a number of defenses to any claims asserted against them by the Settling Claimants; 
 WHEREAS, the Horizon Entities and the Settling Claimants have agreed to the terms of this Settlement Agreement, including the Exhibits thereto, to resolve and release claims as set forth more fully
herein; and 
 WHEREAS, the Horizon Entities and the Settling Claimants agree that this Settlement Agreement shall not be deemed
or construed to be an admission or evidence of the truth of any of the claims or allegations that the Settling Claimants might have made against the Horizon Entities; 

  
 1 

 NOW, THEREFORE, it is agreed by and among the undersigned, on behalf of the Horizon Entities
and the Settling Claimants, that the Settling Claimants shall release the Horizon Parties Subject to Release (as defined herein) from the Horizon Claims Subject to Release (as defined in paragraph 5) in exchange for the Consideration set forth
herein, on the following terms and conditions. 
 1. Definitions. The following terms shall have the following meanings
for purposes of this Settlement Agreement: 
 1.1 “Antitrust Laws” means any and all federal,
state, local, or foreign antitrust, unfair competition, unfair practices, trade practices, consumer protection, fraud protection, price discrimination, unitary pricing, RICO, or similar laws, including without limitation, the Sherman Act, 15 U.S.C.
§1 el seq., and the antitrust law of Puerto Rico, P.R. Laws Ann. tit. 10 §258. 
 1.2
“Cabotage” means shipping services provided in the noncontiguous ocean trade between the continental United States and Alaska, Hawaii, and U.S. territories and commonwealths, including Puerto Rico, and between any of them.

 1.3 “Counsel for Settling Claimants” means the undersigned law firms representing the
Settling Claimants. 
 1.4 “Effective Date” means the date upon which counsel for all of the
Parties have signed this Settlement Agreement. 
 1.5 “Horizon Entities” means Horizon Lines,
Inc., Horizon Lines, LLC, Horizon Logistics Holdings, LLC, Horizon Logistics, LLC and Horizon Lines of Puerto Rico, Inc. 
 1.6 “Horizon Parties Subject to Release” means the Horizon Entities and all present and former direct and indirect parents, subsidiaries, divisions, affiliates or associates (including,
but not limited to, as defined in SEC Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934) of the Horizon Entities and all present and former stockholders, officers, directors, members, equity owners in any form, employees (except
R. Kevin Gill, Gregory Glova, and Gabriel Serra), and legal representatives of any of the foregoing entities (with respect to any conduct of any of those entities); and the predecessors, heirs, executors, administrators, successors and assigns of
any of the foregoing persons or entities. With respect to any natural person who was employed by any of the Horizon Entities, such person shall be a Party Subject to Release only with respect to any act or conduct that occurred while that person was
acting as an officer, director, member, employee, or legal representative of an Horizon Entity. 

  
 2 

 1.7 “Jenner & Block Claimants” means those clients
of Jenner & Block identified in Exhibit 1. 
 1.8 “Kenny Nachwalter Claimants” means
those clients of Kenny Nachwalter identified in Exhibit 2. 
 1.9 “Nexsen Pruet Claimants” means
those clients of Nexsen Pruet identified in Exhibit 3. 
 1.10 “Puerto Rican Cabotage” means
shipping services provided in the noncontiguous ocean trade between the United States and Puerto Rico. 
 1.11
“Releasing Party” means any Settling Claimant, on its own behalf and on behalf of its present and former officers, directors, stockholders, agents, employees, legal representatives, trustees, parents, associates, controlled
affiliates, subsidiaries, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns, to the extent that they could bring a claim on behalf of a Settling Claimant. 

1.12 “Settlement” means the settlement set forth herein. 

1.13 “Settling Claimants” means all of the persons and entities that Counsel for the Settling Claimants
requested be excluded from the Settlement Class in the Class Action, as set forth in Exhibits 1-3. 
 1.14
“United States” means the fifty states of the United States, the District of Columbia, the Commonwealth of Puerto Rico and any other United States territories. 

2. Effectiveness of the Settlement Agreement. This Settlement Agreement shall become effective on the Effective Date. 

3. Consideration. Subject to the provisions hereof, and in full, complete and final settlement of the Horizon Claims Subject to
Release, as defined in paragraph 5, of the Settling Claimants with respect to the Horizon Parties Subject to Release, the Horizon Entities agree to pay by wire transfers, pursuant to instructions provided to counsel for the Horizon Entities by
Counsel for Settling Claimants, the amount of $13,750,000 (the “Settlement Amount”) as follows: 
  

	 	a.	The Horizon Entities shall pay $5,750,000 within 10 business days after the Effective Date to Counsel for Settling Claimants. 

  
 3 

	 	b.	The Horizon Entities shall pay $4,000,000 on or before June 30, 2012, to Counsel for the Settling Claimants. 

 

	 	c.	The Horizon Entities shall pay $4,000,000 on or before December 24, 2012, to Counsel for the Settling Claimants. 

The Horizon Entities shall make the above payments to counsel for the Jenner & Block Claimants, counsel for the Kenny Nachwalter Claimants, and
counsel for the Nexsen Pruet Claimants in the amounts as set forth in the confidential side letter from those counsel to counsel for the Horizon Entities, dated November 23, 2011, which letter is incorporated by reference into this Settlement
Agreement. Counsel for the Settling Claimants shall be solely responsible for distributing the Settlement Amount to their respective clients in such amounts and in such manner as they determine in their sole discretion, and the Horizon Parties
Subject to Release shall have no say in the allocation of these funds by Counsel for Settling Claimants. The Horizon Parties Subject to Release shall have no responsibility for the allocation or distribution of the Settlement Amount among the
Settling Claimants and shall have no financial obligations to the Settling Claimants under this Settlement other than to make the payments specified in this paragraph. 
 4. Expenses and Attorneys’ Fees. The Parties agree to bear their own costs and attorneys’ fees. 
 5. Conditional Release as to the Horizon Parties Subject to Release. The Release of the Horizon Parties Subject to Release shall be conditional upon full payment of the Settlement Amount consistent
with the payment schedule set forth in paragraph 3. Absent full and timely payment of each installment pursuant to paragraph 3, there shall be no release of the Horizon Parties Subject to Release. If full payment is made consistent with the schedule
in paragraph 3, Settling Claimants, as Releasing Parties, release and forever discharge the Horizon 

  
 4 

 
Parties Subject to Release from all manner of claims, demands, actions, suits, causes of action, counterclaims, affirmative defenses, or rights of set off, damages whenever incurred,
liabilities of any nature whatsoever, including costs, expenses, penalties and attorneys’ fees, known or unknown, derivative or direct, suspected or unsuspected, accrued or non-accrued, asserted or unasserted in law or equity (including,
without limitation, claims which have been asserted or could have been asserted in any litigation against the Horizon Parties Subject to Release arising out of the matters relating to Cabotage) that any Releasing Party now has, ever had, or may have
had as of the date of this Settlement Agreement, whether directly, representatively, derivatively or in any other capacity, based on purchases of Cabotage or relating in any way to the supplying, pricing, or distribution of Cabotage (hereinafter the
“Horizon Claims Subject to Release”); provided, however, that this conditional release does not release claims set forth in paragraph 7. 
 Between the Effective Date and June 30, 2012 (or December 24, 2012, if the June 30, 2012, payment is timely made by the Horizon Entities), the Settling Claimants covenant not to file, sue,
or otherwise assert Horizon Claims Subject to Release against the Horizon Parties Subject to Release. Likewise, any and all statutes of limitation, statutes of repose, other time-related defenses, whether at law or in equity (including, but not
limited to the doctrines of waiver, laches, acquiescence, and estoppel) that are or may be applicable to the Horizon Claims Subject to Release against the Horizon Parties Subject to Release that have not already run by the Effective Date of this
Agreement are tolled from the Effective Date through June 30, 2012 (or December 24, 2012, if the June 30, 2012 payment is timely made by the Horizon Entities). Upon full and final payment of the Settlement Amount in accordance with
the schedule in paragraph 3, the Claims against the Horizon Parties Subject to Release will be deemed fully released. In the event the Horizon Entities fail to pay the Settlement Amount in accordance with

  
 5 

 
the schedule in paragraph 3, the conditional release contained herein will be of no force and effect, and Settling Claimants will be free to file suit or otherwise assert the Horizon Claims
Subject to Release against the Horizon Parties Subject to Release. In any such subsequent action, any amounts already paid by the Horizon Entities to the Settling Claimants under paragraph 3 may be set off by the Horizon Parties Subject to Release
against any monetary judgment rendered against the Horizon Parties Subject to Release. 
 6. Waiver of Release
Limitations. Subject to the conditions set forth in paragraph 5 and the reservations in paragraph 7, to the extent permitted by law, each Settling Claimant shall also be deemed to have expressly waived, released and forever discharged any and
all defenses, provisions, rights and benefits that may be available under: 
  

	 	a.	Section 1542 of the California Civil Code, which provides: 

 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor; 
 and/or, 

 

	 	b.	Any law in any of the United States that is similar, comparable or equivalent to Section 1542 of the California Civil Code (each a “Comparable Law”).

 With respect to the Horizon Claims Subject to Release, each Settling Claimant hereby: (i) assumes all risks for claims
heretofore and hereafter arising, whether known or unknown, suspected or unsuspected, contingent or non-contingent; (ii) releases and forever discharges such claims consistent with paragraph 5 as part of the Horizon Claims Subject to Release;
and (iii) expressly and irrevocably waives any rights he, she or it may have under Section 1542 of the California Civil Code and any Comparable Law. 

  
 6 

 7. Reservation of Claims. Pursuant to this Settlement Agreement and paragraph 5
above, each Settling Claimant settles and releases only the Horizon Parties Subject to Release, and the Parties do not intend this Settlement Agreement, or any part hereof or any other aspect of the Settlement, to release or otherwise affect in any
way any claims or rights any Settling Claimant has or may have against any non-settling entity or person whatsoever, including, but not limited to, any other Cabotage carrier or its present or former parents, affiliates, subsidiaries, officers,
directors, or employees, other than the Horizon Parties Subject to Release. Non-settling entities or persons shall remain jointly and severally liable for the total volume of commerce affected by the conspiracy, including the volume directly
attributable to the Horizon Entities, arising from any alleged combination and conspiracy relating to Cabotage, including, but not limited to, any alleged damage or responsibility for any of the acts of the Horizon Parties Subject to Release. In the
event that any Settling Claimant files an antitrust claim against any non-settling entity or person, such claim shall be brought under federal law and not under the laws of any state, commonwealth, or U.S. territory. In addition, this Settlement
Agreement shall not limit in any way any claims the Horizon Entities may have against any Settling Claimant relating to accounts receivable, contract obligations, or claims and defenses in existing litigation or bankruptcy proceedings. In addition,
this Settlement Agreement shall not limit in any way any claims that any of the Settling Claimants may have against the Horizon Entities relating to claims based on breach of contract, breach of warranty, or damage to goods, personal injury or
bankruptcy proceeding, that do not involve any claims under the Antitrust Laws. 

  
 7 

 8. Enforcement of Settlement Agreement and Releases. Subject to paragraphs 5 and 6,
from and after the full satisfaction by the Horizon Entities of all the payments required under paragraph 3, this Settlement Agreement may be pleaded as a full and complete defense to any claim, action, suit or other proceeding that has been or may
be instituted, prosecuted or attempted by Settling Claimants with respect to any of the Horizon Claims Subject to Release. The Parties agree that for any such proceeding, any court of competent jurisdiction may enter an injunction restraining
prosecution of such proceeding. The Parties further agree that this Settlement Agreement may be pleaded as necessary for the purpose of enforcing the Settlement Agreement. 
 9. Consent to Jurisdiction. Any controversy, claim, or dispute arising out of, relating to, or in connection with this Settlement Agreement shall be brought in the United States District Court for
the Western District of North Carolina. 
 10. Cooperation Agreement. The Horizon Entities will cooperate with Counsel
for Settling Claimants with respect to Puerto Rican Cabotage as set forth in this paragraph. 
  

	 	a.	 Promptly, but no later than thirty (30) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will begin
producing to Counsel for Settling Claimants non-privileged documents that have been seized by, or produced (or compiled for production) to, the U.S. Department of Justice relating to Puerto Rican Cabotage. The documents will be made available to
Counsel for Settling Claimants at a time and in a manner reasonably agreeable to them, and documents stored or maintained in electronic format shall be produced in 

  
 8 

	 	
electronic format. The production of such documents will be subject to a confidentiality agreement and contractual or statutory confidentiality limitations on disclosure. The Horizon Entities
agree to produce a person(s) sufficiently qualified to authenticate company documents, including electronic data, as business records of the Horizon Entities (or their predecessors) as may reasonably be requested by Counsel for Settling Claimants.

  

	 	b.	Promptly, but no later than fifteen (15) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will produce to Counsel for
the Settling Claimants transactional data regarding shipments by the Horizon Entities (and their predecessors) of cargo in Puerto Rican Cabotage from January 1, 1998, through the Effective Date, to the extent that such information is reasonably
available to the Horizon Entities. Documents and data stored in electronic format shall be produced in electronic format. For purposes of this paragraph, transactional data shall include data fields that reflect or refer to the actual amounts that
the Horizon Entities (and their predecessors) charged their customers for Puerto Rican Cabotage, including, without limitation, unit rates, total price, volume, size and type of container, cargo type, origin and destination points and ports, all
surcharges or accessorials, and all other charges, set forth by customer and by transaction, to the extent maintained in the ordinary course of business by the Horizon Entities (or their predecessors). The production of such transactional data will
be subject to a confidentiality agreement and contractual or statutory confidentiality limitations on disclosure. 

  
 9 

	 	c.	Promptly, but no later than fifteen (15) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will produce to Counsel for
the Settling Claimants documents reflecting, referring to, or itemizing the Horizon Entities’ (and their predecessors’) costs and capacity in Puerto Rican Cabotage, from January 1, 1998, through the Effective Date, including actual
costs underlying each surcharge or accessorial fee, to the extent such information is reasonably available to the Horizon Entities. The production of such documents will be subject to a confidentiality agreement and contractual or statutory
confidentiality limitations on disclosure. 

  

	 	d.	Promptly, but no later than fifteen (15) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will produce to Counsel for
the Settling Claimants financial statements reflecting the Horizon Entities’ (and their predecessors’) profit and loss performance in Puerto Rican Cabotage from January 1, 1998, through the Effective Date, to the extent such
information is reasonably available to the Horizon Entities. Such reports shall be provided by month, quarter, or year and shall report units and surcharge information, to the extent such information is reasonably available to the Horizon Entities.
The production of such documents will be subject to a confidentiality agreement and contractual or statutory confidentiality limitations on disclosure. 

  
 10 

	 	e.	Promptly, but no later than thirty (30) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will use all reasonable
efforts to make their current officers or employees available for interviews, depositions, declarations/affidavits, and trial testimony regarding Puerto Rican Cabotage, as may reasonably be requested by Counsel for Settling Claimants. Promptly, but
no later than forty (40) business days following the Effective Date of the Settlement Agreement, the Horizon Entities will use all reasonable efforts to make their former officers or employees available for interviews, depositions,
declarations/affidavits, and trial testimony regarding Puerto Rican Cabotage, as may reasonably be requested by Counsel for Settling Claimants. 

  

	 	f.	The Parties agree that counsel for the Horizon Entities may be present at any depositions, trial testimony, and interviews of current or former officers or employees of
one of the Horizon Entities that they make available. 

  

	 	g.	Promptly, but no later than thirty (30) business days following the Effective Date of the Settlement Agreement, the Horizon Entities agree to make their counsel
available upon reasonable request to meet with Counsel for Settling Claimants to provide information, related to Puerto Rican Cabotage, concerning documents, witnesses, and events not covered by any privilege, work product, or other protection. The
production of such information will be subject to a confidentiality agreement and contractual or statutory confidentiality limitations on disclosure. 

  
 11 

	 	h.	Counsel for Settling Claimants agree that they will not assert that the Horizon Entities have waived any attorney-client privilege, work-product immunity, or any other
privilege or protection, with respect to documents or information provided to, or identified to, them pursuant to the Settlement Agreement. 

  

	 	i.	The obligations of the Horizon Entities to provide cooperation pursuant to this paragraph shall continue for as long as Settling Claimants are litigating claims related
to Puerto Rican Cabotage against entities not Parties to this Settlement Agreement. 

  

	 	j.	The Settling Claimants shall not be responsible for any attorneys’ fees and costs that the Horizon Entities incur in complying with this paragraph and all of its
subparts. 

  

	 	k.	The Horizon Entities will produce such other documents and data relating to Puerto Rican Cabotage (or Settling Claimants’ antitrust claims relating thereto) that
Counsel for Settling Claimants may reasonably request. The production of such documents and/or data will be subject to a confidentiality agreement and contractual or statutory confidentiality limitations on disclosure. In the event that the Horizon
Entities do not produce documents, data, and/or witnesses requested by Settling Claimants, Settling Claimants may seek such documents, data, and/or witnesses from the Horizon Entities by way of third-party subpoena(s) pursuant to the Federal Rules
of Civil Procedure, and the Horizon Entities may object to any such subpoena(s). 

  
 12 

 Notwithstanding anything in this paragraph 10, the Parties understand that cooperation of individuals shall
be subject to their individual rights and obligations. The refusal of any individual to agree to make himself or herself available for interviews, depositions, declarations/affidavits or trial testimony shall not constitute a breach of the Horizon
Entities’ obligations under this Settlement Agreement, provided that the Horizon Entities have exercised reasonable efforts as set forth in this paragraph. 
 11. Binding Effect. This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of the Parties hereto. Without limiting the generality of the foregoing,
each covenant and agreement made herein on behalf of Settling Claimants shall be binding upon all Settling Claimants. 
 12.
Authorization to Enter into Settlement Agreement. The undersigned counsel for the Horizon Entities covenant and represent that they are fully authorized to enter into and to execute this Settlement Agreement on behalf of the Horizon Entities.
Counsel for the Settling Claimants covenant and represent that they are fully authorized by each of the Settling Claimants to conduct settlement negotiations with counsel for the Horizon Entities and to enter into and execute this Settlement
Agreement on behalf of each of the Settling Claimants. 
 13. Notices. All required notices to the Parties to this
Settlement Agreement shall be in writing. Each such notice shall be given either by (a) hand delivery; or (b) an overnight express delivery service and shall be addressed, if directed to Counsel for Settling Claimants or counsel for the
Horizon Entities, to the addresses set forth on the signature pages hereof, or such other address as any of them may subsequently provide, pursuant to notice in the manner described in this paragraph. 

  
 13 

 14. No Admission. Whether or not the Settlement Agreement becomes effective or is
terminated, neither this Settlement Agreement nor its contents and exhibits, nor the associated statements, negotiations, documents and discussions, may be deemed or construed to be an admission or evidence of any violation by any of the Horizon
Parties Subject to Release of any statute or law, or of any liability or wrongdoing, or of the truth of any of claims or allegations or any other pleading, and evidence thereof shall not be discoverable or used, directly or indirectly, in any way
against any of the Horizon Parties Subject to Release. 
 15. Intended Beneficiaries. No provision of this Settlement
Agreement shall provide any rights to, or be enforceable by, any person or entity not a Settling Claimant or a Horizon Party Subject to Release. Absent court order or written agreement of the Parties hereto, no Settling Claimant or its Counsel may
assign or otherwise convey any right to participate in or enforce any provision of this Settlement Agreement. 
 16. No
Conflict Intended; Headings. Any inconsistency between this Settlement Agreement and the exhibits attached hereto shall be resolved in favor of this Settlement Agreement. The headings used in this Settlement Agreement are intended for the
convenience of the reader only and shall not affect the meaning or interpretation of this Settlement Agreement. 
 17. No
Party Is the Drafter. No Party or signatory shall be considered the drafter of this Settlement Agreement for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed
against the drafter. 

  
 14 

 18. Confidentiality. Unless the Parties consent or unless a court so orders, the
Parties agree that neither the Settling Claimants (including Counsel for Settling Claimants) nor the Horizon Entities will disclose the terms of this Settlement Agreement. Nothing in this Settlement Agreement shall prohibit the Parties hereto from
making a disclosure as required by federal or state securities laws or as otherwise necessary to conduct business (e.g., disclosure to counsel, accountants, lenders, etc.). 
 19. Choice of Law. All terms of this Settlement Agreement and the exhibits attached hereto shall be governed by and interpreted according to the substantive laws of the State of New York without
regard to its choice of law or conflict of laws principles. 
 20. Amendment; Waiver. This Settlement Agreement shall not
be modified in any respect except by a writing executed by all the Parties hereto, and the waiver of any rights conferred hereunder shall be effective only if made by written instrument of the waiving Party. The waiver by any Party of any breach of
this Settlement Agreement shall not be deemed or construed as a waiver of any other breach, whether prior to, subsequent to or contemporaneous with, this Settlement Agreement. 
 21. Execution in Counterparts. This Settlement Agreement may be executed in counterparts. Scanned signatures shall be considered valid signatures made on the date transmitted. 

22. Integrated Agreement. This Settlement Agreement contains an entire, complete, and integrated statement of each and every term
and provision agreed to by and among the Parties hereto, and it is not subject to any condition not provided for herein. 

  
 15 

 IN WITNESS WHEREOF, the Parties hereto, through their authorized representatives, have agreed and entered
into this Settlement Agreement as of the date first written above. 
 ON BEHALF OF THE SETTLING CLAIMANTS: 

 

											
		 	KENNY NACHWALTER, P.A.	 		 	JENNER & BLOCK LLP
						
		 	By:	 	 /s/ William J. Blechman
	 		 	By:	 	 /s/ John F. Kinney

		 		 	William J. Blechman	 		 		 	John F. Kinney
		 		 	201 South Biscayne Blvd.	 		 		 	353 N. Clark Street
		 		 	Suite 1100	 		 		 	Chicago, Illinois 60654-3456
		 		 	Miami, Florida 33131-4327	 		 		 	Tel: (312) 923-2807
		 		 	Tel: (305) 373-1000	 		 		 	Fax: (312) 923-2907
		 		 	Fax: (305) 372-1861	 		 		 	jkinney@jenner.com
		 		 	wblechman@kennynachwalter.com	 		 		 	
				
		 	Counsel for the Kenny Nachwalter Claimants as set forth in Ex. 2	 		 	Counsel for the Jenner & Block Claimants as set forth in Ex. 1
						
		 	Date:	 	November 23, 2011	 		 	Date:	 	November 23, 2011
					
		 	NEXSEN PRUET, LLC	 		 		 	
						
		 	By:	 	 /s/ David C. Eddy
	 		 		 	
		 		 	David C. Eddy	 		 		 	
		 		 	1230 Main Street	 		 		 	
		 		 	Columbia, South Carolina 29202	 		 		 	
		 		 	Tel: (803) 253-8267	 		 		 	
		 		 	Fax: (803) 253-8277	 		 		 	
		 		 	deddy@nexsenpruet.com	 		 		 	
					
		 	Counsel for the Nexsen Pruet Claimants as set forth in Ex. 3	 		 		 	
						
		 	Date:	 	November 23, 2011	 		 		 	

 Counsel for Settling Claimants 

  
 16 

 ON BEHALF OF THE HORIZON ENTITIES: 

 

					
		 	MCGUIREWOODS LLP
			
		 	By:	 	 /s/ Richard J. Rappaport

		 		 	Richard J. Rappaport
		 		 	Amy B. Manning
		 		 	Tammy L. Adkins
		 		 	77 West Wacker Drive
		 		 	Suite 4100
		 		 	Chicago, IL 60601-1818
		 		 	Tel: (312) 750-8618
		 		 	Fax: (312) 920-3696
		 		 	rrappaport@mcguirewoods.com
		 		 	amanning@mcguirewoods.com
		 		 	tadkins@mcguirewoods.com
			
		 	Date:	 	November 23, 2011
		
		 	 SKADDEN, ARPS, SLATE,
 MEAGHER & FLOM LLP

			
		 	By:	 	 /s/ John M. Nannes

		 		 	John M. Nannes
		 		 	Tiffany Rider
		 		 	1440 New York Avenue, N.W.
		 		 	Washington, DC 20005
		 		 	Tel: (202) 371-7500
		 		 	Fax: (202) 661-9191
		 		 	john.nannes@skadden.com
		 		 	tiffany.rider@skadden.com
			
		 	Date:	 	November 23, 2011

 Attorneys for Horizon Lines, Inc., Horizon Lines, LLC, Horizon Logistics Holdings, LLC, 

Horizon Logistics, LLC, and Horizon Lines of Puerto Rico, Inc. 

  
 17

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