Document:

Amendment No. 1 to Amended and Restated Credit Agreement, dated Sept 22, 2005

 Exhibit 10.1 
  
 AMENDMENT NO. 1 
  
 This Amendment No. 1 (this “Amendment”) is dated as of September 22, 2005 and is to the Amended and Restated Credit Agreement,
dated as of April 7, 2005 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among HORIZON LINES, LLC, a Delaware limited liability company
(“Borrower”), HORIZON LINES HOLDING CORP., a Delaware corporation (“Co-Borrower”), the Guarantors (such term and each other capitalized term used but not defined herein having the meaning given it in the Credit
Agreement), the Lenders, UBS SECURITIES LLC and GOLDMAN SACHS CREDIT PARTNERS L.P., as joint lead arrangers and joint lead bookrunners, UBS AG, STAMFORD BRANCH, as administrative agent (in such capacity, “Administrative Agent”) for
the Lenders, collateral agent for the Secured Parties and as mortgage trustee, GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication Agent, and ABN AMRO INC., as co-arranger and documentation agent. 
  
 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 1.01 of the Credit Agreement is
hereby amended by, amending and restating the definition of the term “Specified IPO” in its entirety as follows: 
  
 ““Specified IPO” means the underwritten initial public offering of common stock of Horizon Lines, Inc. consummated on or prior to
October 15, 2005 pursuant to the Registration Statement generating gross proceeds of not less than $100,000,000, provided that a portion of such proceeds have been designated to be used to redeem not less than $40,000,000 in aggregate
principal amount of the High Yield Notes pursuant to the provisions of Section 6 of the form of note set forth in the High Yield Indenture.” 
  
 SECTION TWO Conditions to Effectiveness. This Amendment shall become effective as of the date (the “Effective Date”) if, at or
prior to 5 pm, New York City time, on September 26, 2005 (such date and time, the “Deadline”), the Administrative Agent shall have received (i) counterparts of this Amendment executed by the Borrower and the Administrative
Agent and (ii) Confidential Lender Authorizations (as defined below) executed by 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). 
  
 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; Amendment Fee. Whether or not the Effective Date occurs, the 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). Promptly (but in any event not later than one Business Day) following the Effective Date, the Borrower hereby covenants and agrees that it shall, in immediately
available funds through the Administrative Agent, pay to each (i) Tranche C Lender that delivers a Confidential Lender Authorization at or prior to the Deadline a fee equal to 0.10% of the aggregate principal amount of Tranche C Term Loans held
by such Tranche C Lender as of the Effective Date and (ii) Revolving Lender that delivers a Confidential Lender Authorization at or prior to the Deadline a fee equal to 0.10% of the aggregate principal amount of Revolving Commitments of such
Revolving Lender as of the Effective Date; provided that no fees referred to in this sentence shall be payable if the Effective Date shall not occur. If the foregoing sentence shall not be complied with, it is agreed that this Amendment shall
be void and of no further force or effect. 
  
 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 

  

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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 Confidential Lender Authorizations. “Confidential Lender Authorizations” are the confidential lender authorizations
in the form distributed to each of the Lenders in connection with this Amendment. Each Lender that signs a Confidential Lender Authorization shall be deemed to have approved this Amendment and shall be further deemed for the purposes of the Loan
Documents to have approved this Amendment. Each Lender signatory to a Confidential Lender Authorization agrees that such Lender shall not be entitled to receive a copy of any other Lender’s Confidential Lender Authorization, but agrees that a
copy of such Confidential Lender Authorization may be delivered to Borrower. 
  
 SECTION EIGHT 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 PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION).  
  
 [Signature Pages Follow] 
  

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	 HORIZON LINES, LLC, as Borrower

		
	By:	 	/s/    ROBERT S.
ZUCKERMAN        
	 Name:
	 	Robert S. Zuckerman
	 Title:
	 	Vice President

  

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	UBS AG, STAMFORD BRANCH, as Administrative Agent, Collateral Agent and Mortgage Trustee
		
	By:	 	/s/    RICHARD L. TAVROW        
	 Name:
	 	Richard L. Tavrow
	 Title:
	 	Director Banking Products Services, US
		
	By:	 	/s/    SALLOZ SIKKA        
	 Name:
	 	Salloz Sikka
	 Title:
	 	Associate Director Banking Products Services, US

  

 -5-Stock Option Award Agreement

 Exhibit 10.2 
  
 HORIZON LINES, INC. 
 AMENDED AND RESTATED 
 EQUITY INCENTIVE PLAN  
 STOCK OPTION AWARD AGREEMENT 
  
 HORIZON LINES, INC., a Delaware corporation (the “Company”), hereby grants to Charles Raymond (the “Participant”) the following
option (the “Option”) to purchase Shares, subject to the following and pursuant to the Horizon Lines, Inc. Amended and Restated Equity Incentive Plan (the “Plan”). 
  
 Grant Date: September 27, 2005 (“Grant Date”) 
  
 Option Price: $10.00 per Share (“Option Price”) 
  
 Number of Shares: 124,000 Shares 
  
 Type of Option: Nonqualified Stock Option 
  
 Expiration Date: Tenth anniversary of the Grant Date (the “Option
Period”) 
  
 Relationship to Plan. This Option is
granted pursuant to the Plan and is in all respects subject to the terms, conditions and definitions of the Plan (including, but not limited to, provisions concerning exercise, restrictions on Options, termination, repurchase right,
nontransferability and adjustment of the number of Shares). The Participant hereby accepts this Option subject to all the terms and provisions of the Plan. The Participant further agrees that all decisions under and interpretations of the Plan by
the Administrator shall be final, binding and conclusive upon the Participant and his or her heirs. All capitalized terms used herein and not otherwise defined herein shall have the same meanings ascribed to them in the Plan. If there is any
inconsistency between the terms of this Stock Option Award Agreement (the “Agreement”) and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. 
  
 The Participant hereby acknowledges receipt of a copy of the Plan attached
hereto as Annex A as presently in effect, but as may be amended from time to time. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof, and supersede any prior written or oral
agreements. 
  
 Vesting Schedule. Subject to the
Participant’s continued employment with the Company and its Subsidiaries and Affiliates, the Option shall vest and become exercisable with respect to one hundred percent (100%) of the Shares covered by the Option on the third anniversary of the
Grant Date; provided, however, that if, prior to the third anniversary of the Grant Date, the Participant’s employment with the Company terminates due to his or her voluntary retirement on or after the Participant’s attainment of age
591⁄2, the Option shall vest and become exercisable with respect to a prorated portion of the Shares covered by the Option equal to the number of Shares covered by the Option multiplied by a fraction, the numerator of which is the number of days
from the Grant Date through the date of such retirement and the denominator of which is the number of days from the Grant Date through the third anniversary of the Grant Date. The Administrator reserves the right, in its sole discretion, to waive or
reduce the vesting requirements applicable to any Option at any time. 

 Exercisability of Option. Unless otherwise provided in this Agreement or the Plan, this Option
shall entitle the Participant to purchase, in whole at any time or in part from time to time, to the extent the Option is vested in accordance with the vesting schedule herein, the Shares subject to this Option, and each such right of purchase shall
be cumulative and shall continue, unless sooner exercised or terminated as herein provided, during the remaining Option Period. 
  
 Manner of Exercise and Payment. Subject to the terms and conditions of this Agreement and the Plan, this Option may be exercised by delivery of
written notice to the Administrator, at the Company’s principal executive office in the form of Annex B. Such notice shall state (i) that the person exercising this Option is entitled to exercise this Option, (ii) that such person is electing
to exercise this Option and (iii) the number of Shares in respect of which this Option is being exercised. 
  
 The Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Shares subject to this Option until
this Option shall have been exercised pursuant to the terms of this Agreement and the Participant shall have paid the full Option Price for the number of Shares in respect of which this Option was exercised. 
  
 The Option Price of the Shares as to which an Option shall be exercised shall
be paid to the Company at the time of exercise in cash or by such other method approved by the Administrator, in is sole discretion, as may be allowed under applicable law. 
  
 Withholding of Taxes. The Company may make such provisions and take such steps as it may deem necessary or
appropriate for the withholding of all federal, state, local and other taxes required by law to be withheld with respect to the Option including, but not limited to (a) reducing the number of Shares otherwise deliverable, based upon their Fair
Market Value on the date of exercise, to permit deduction of the amount of any such withholding taxes from the amount otherwise payable under the Plan, (b) deducting the amount of any such withholding taxes from any other amount then or thereafter
payable to a Participant, or (c) requiring a Participant, beneficiary or legal representative to pay to the Company the amount required to be withheld or to execute such documents as the Company deems necessary or desirable to enable it to satisfy
its withholding obligations as a condition of releasing the Share. 
  
 Repurchase Right. Any Shares held by a Participant issued in connection with the exercise of the Option shall be subject to the repurchase right set forth under Section 6(h) of the Plan. 
  
 Transferability. The Option shall be subject to the transfer
restrictions contained in Section 6(i) of the Plan. 
  
 No
Employment or Service Contract. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue such Participant’s relationship with the Company or a Subsidiary or Affiliate thereof, nor shall it give any
Participant the right to be retained in the employ of the Company or a Subsidiary or Affiliate or interfere with or otherwise restrict in any way the rights of the Company or a Subsidiary or Affiliate, which rights are hereby expressly reserved, to
terminate any Participant’s employment or relationship at any time for any reason. 
  
 Securities Laws. Upon the acquisition of any Shares pursuant to the exercise of the Option, the Participant will make or enter into such written representations, warranties and agreements as the Administrator
may reasonably request in order to comply with applicable securities laws or with this Agreement. 
  

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 Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of
its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party at such other address as either party hereto may hereafter
designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. 
  
 Modification of Agreement. This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by
a written instrument executed by the parties hereto. 
  
 Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms. 
  
 Other Agreements. As a condition to the grant of the Option hereunder, the Participant acknowledges and agrees that the Shares covered by this Option are subject to (i) the Amended and Restated Stockholders Agreement dated as of
September 20, 2005, among the Company, the Participant and the other parties thereto, as amended, supplemented or otherwise modified from time to time, (ii) the Amended and Restated Voting Trust Agreement dated as of October 15, 2004, among the
Company, John K. Castle, as voting trustee, the Participant, and the other parties thereto, as amended, supplemented or otherwise modified from time to time, and (iii) the Registration Rights Agreement dated as of September 20, 2005, among the
Company, the Participant and the other parties thereto, as amended, supplemented or otherwise modified from time to time. 
  
 Governing Law. The validity, interpretation, construction and performance of this Award Agreement shall be governed by the laws of the State of New
York without giving effect to the conflicts of laws principles thereof. 
  
 Jurisdiction. Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York and, by execution and delivery
of this Agreement, the Purchaser hereby accepts for himself and in respect of his property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Purchaser further irrevocably consents to the service of process out of any of
the aforementioned courts in any action or proceeding by the mailing of copies thereof by guaranteed overnight courier to the Purchaser. Nothing herein shall affect the right of the Company to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Purchaser in any other jurisdiction. The Purchaser hereby irrevocably waives any objection which he may now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum. 
  
 Waiver of
Jury Trial. The parties hereto each waive their respective rights to a trial by jury of any claim or cause of action based upon or arising out of or related to this Agreement or the transactions contemplated hereby in any action, proceeding or
other litigation of any type brought by any of the parties against any other party or parties, whether with respect to contract claims, tort claims, or otherwise. The parties hereto each agree that any such claim or cause of action shall be tried by
a court trial without a jury. Without limiting the foregoing, the parties further agree that their respective right to a trial by jury is waived by operation of this paragraph as to any action, counterclaim or other proceeding 
  

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 which seeks, in whole or in part, to challenge the validity or enforceability of this Agreement or any provision hereof.
This waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this Agreement. 
  
 Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 
  

					
	 Accepted and Agreed:
	 	 HORIZON LINES, INC.

			
	 /s/ Charles G. Raymond

	 	 By:
	 	 /s/ Robert S. Zuckerman

	 Charles G. Raymond
	 	 Name:
	 	 Robert S. Zuckerman

	 	 	 Title:
	 	 Vice President, General Counsel and Secretary

  

			
	Attachments:	 	Annex A (The Plan)
	 	 	Annex B (Form of Exercise Notice)

  
 Dated: September 27, 2005 

 

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