Page | ||||
ARTICLE 1 Definitions; Interpretations | 1 | |||
Section 1.01.Definitions | 1 | |||
Section 1.02.Rules of Construction | 42 | |||
Section 1.03.References to Interest | 42 | |||
Section 1.04.References to Subordination | 43 | |||
ARTICLE 2 Issue, Description, Execution, Registration and Exchange of Notes | 43 | |||
Section 2.01.Designation and Amount | 43 | |||
Section 2.02.Form of Notes | 43 | |||
Section 2.03.Date and Denomination of Notes; Payments of Interest | 44 | |||
Section 2.04.Execution, Authentication and Delivery of Notes | 46 | |||
Section 2.05.Exchange and Registration of Transfer of Notes; Depositary; Automatic Exchange | 46 | |||
Section 2.06.Mutilated, Destroyed, Lost or Stolen Notes | 49 | |||
Section 2.07.Temporary Notes | 51 | |||
Section 2.08.Cancellation of Notes Paid, Etc | 51 | |||
Section 2.09.CUSIP Numbers | 51 | |||
Section 2.10.Additional Notes; Purchases | 52 | |||
ARTICLE 3 [Intentionally Omitted] | 52 | |||
ARTICLE 4 Particular Covenants of the Company | 52 | |||
Section 4.01.Payment of Principal and Interest | 52 | |||
Section 4.02.Maintenance of Office or Agency | 52 | |||
Section 4.03.Appointments to Fill Vacancies in Trustee’s Office | 53 | |||
Section 4.04.Provisions as to Paying Agent | 53 | |||
Section 4.05.Existence | 55 | |||
Section 4.06.Reports | 55 | |||
Section 4.07.Stay, Extension and Usury Laws | 56 | |||
Section 4.08.Compliance Certificate; Statements as to Defaults | 56 | |||
Section 4.09.Restricted Payments | 57 | |||
Section 4.10.Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries | 62 | |||
Section 4.11.Incurrence of Indebtedness and Issuance of Preferred Stock | 65 |
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Section 4.12.Asset Sales | 71 | |||
Section 4.13.Transactions with Affiliates | 75 | |||
Section 4.14.Liens | 78 | |||
Section 4.15.Business Activities | 78 | |||
Section 4.16.Repurchase at the Option of Holders upon Change of Control | 78 | |||
Section 4.17.Payments for Consent | 80 | |||
Section 4.18.Additional Note Guarantees | 81 | |||
Section 4.19.Designation of Restricted and Unrestricted Subsidiaries | 81 | |||
Section 4.20.Anti-Layering | 82 | |||
Section 4.21.Restrictions on Purchases of Existing Notes | 82 | |||
ARTICLE 5 Merger, Consolidation or Sale of Assets | 83 | |||
Section 5.01.Merger, Consolidation or Sale of Assets | 83 | |||
Section 5.02.Successor Company Substituted | 84 | |||
Section 5.03.Opinion Of Counsel To Be Given Trustee | 84 | |||
ARTICLE 6 Lists of Noteholders and Reports by the Company and the Trustee | 85 | |||
Section 6.01.Lists of Noteholders | 85 | |||
Section 6.02.Preservation and Disclosure of Lists | 85 | |||
Section 6.03.Reports by Trustee | 85 | |||
ARTICLE 7 Defaults and Remedies | 86 | |||
Section 7.01.Events of Default | 86 | |||
Section 7.02.Payments of Notes on Default; Suit Therefor | 90 | |||
Section 7.03.Application of Monies or Property Collected by Trustee | 91 | |||
Section 7.04.Proceedings by Noteholders | 92 | |||
Section 7.05.Proceedings by Trustee | 93 | |||
Section 7.06.Remedies Cumulative and Continuing | 93 | |||
Section 7.07.Direction of Proceedings and Waiver of Defaults by Majority of Noteholders | 93 | |||
Section 7.08.Notice of Defaults | 94 | |||
Section 7.09.Undertaking to Pay Costs | 94 | |||
ARTICLE 8 Concerning the Trustee | 95 | |||
Section 8.01.Duties and Responsibilities of Trustee | 95 | |||
Section 8.02.Reliance on Documents, Opinions, Etc | 97 | |||
Section 8.03.No Responsibility for Recitals, Etc | 98 | |||
Section 8.04.Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes | 98 | |||
Section 8.05.Monies to Be Held in Trust | 99 | |||
Section 8.06.Compensation and Expenses of Trustee | 99 |
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Section 8.07.Officer’s Certificate as Evidence | 100 | |||
Section 8.08.Conflicting Interests of Trustee | 100 | |||
Section 8.09.Eligibility of Trustee | 100 | |||
Section 8.10.Resignation or Removal of Trustee | 100 | |||
Section 8.11.Acceptance by Successor Trustee | 102 | |||
Section 8.12.Succession by Merger, Etc | 102 | |||
Section 8.13.Limitation on Rights of Trustee as Creditor | 103 | |||
Section 8.14.Trustee’s Application for Instructions from the Company | 103 | |||
ARTICLE 9 Concerning the Noteholders | 103 | |||
Section 9.01.Action by Noteholders | 103 | |||
Section 9.02.Proof of Execution by Noteholders | 104 | |||
Section 9.03.Who Are Deemed Absolute Owners | 104 | |||
Section 9.04.Company-Owned Notes Disregarded | 104 | |||
Section 9.05.Revocation of Consents; Future Holders Bound | 105 | |||
ARTICLE 10 Note Guarantees | 105 | |||
Section 10.01.Guarantee | 105 | |||
Section 10.02.Limitation on Guarantor Liability | 107 | |||
Section 10.03.Execution and Delivery of Note Guarantee | 107 | |||
Section 10.04.Guarantors May Consolidate, etc., on Certain Terms | 108 | |||
Section 10.05.Releases | 109 | |||
ARTICLE 11 Supplemental Indentures | 109 | |||
Section 11.01.Supplemental Indentures Without Consent of Noteholders | 109 | |||
Section 11.02.Supplemental Indentures With Consent of Noteholders | 111 | |||
Section 11.03.Effect of Supplemental Indentures | 113 | |||
Section 11.04.Notation on Notes | 113 | |||
Section 11.05.Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee | 113 | |||
ARTICLE 12 Satisfaction and Discharge | 114 | |||
Section 12.01.Satisfaction and Discharge | 114 | |||
ARTICLE 13 Immunity of Incorporators, Shareholders, Officers and Directors | 114 | |||
Section 13.01.Indenture and Notes Solely Corporate Obligations | 114 |
iii
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ARTICLE 14 Conversion of Notes | 115 | |||
Section 14.01.Right to Convert Series A Notes | 115 | |||
Section 14.02.Conversion Procedures for Series A Notes. | 115 | |||
Section 14.03.Conversion of Series A Notes at the Option of the Company | 116 | |||
Section 14.04.Mandatory Conversion of Series B Notes | 117 | |||
Section 14.05.Payment Upon Conversion | 118 | |||
Section 14.06.Adjustment of Conversion Rate | 118 | |||
Section 14.07.Adjustment of Average Prices | 129 | |||
Section 14.08.Adjustments Upon Fundamental Changes | 129 | |||
Section 14.09.Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale | 131 | |||
Section 14.10.Taxes on Shares and Warrants Issued | 132 | |||
Section 14.11.Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock | 132 | |||
Section 14.12.Responsibility of Trustee | 133 | |||
Section 14.13.Notice to Holders Prior to Certain Actions | 134 | |||
Section 14.14.Stockholder Rights Plan | 134 | |||
Section 14.15.Company Determination Final | 135 | |||
Section 14.16.Jones Act Restrictions | 135 | |||
Section 14.17.Limitation on Shares Deliverable Upon Conversion | 136 | |||
ARTICLE 15 Intercreditor Agreement | 136 | |||
ARTICLE 16 Collateral | 136 | |||
Section 16.01.Security Documents | 136 | |||
Section 16.02.Collateral Agent | 137 | |||
Section 16.03.Authorization of Actions to Be Taken | 138 | |||
Section 16.04.Release of Collateral | 138 | |||
Section 16.05.Use of Collateral; Compliance with Section 314(d) of the Trust Indenture Act | 140 | |||
Section 16.06.Powers Exercisable by Receiver or Trustee | 141 | |||
Section 16.07.Voting | 141 | |||
Section 16.08.Collateral Proceeds Account | 141 | |||
Section 16.09.Appointment and Authorization of U.S. Bank National Association as Collateral Agent. | 143 | |||
Section 16.10.Recordings and Opinions. | 144 | |||
ARTICLE 17 Miscellaneous Provisions | 145 | |||
Section 17.01.Provisions Binding on Company’s Successors | 145 | |||
Section 17.02.Official Acts by Successor | 145 | |||
Section 17.03.Addresses for Notices, Etc | 145 | |||
Section 17.04.Governing Law | 145 |
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Section 17.05.Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee | 146 | |||
Section 17.06.Legal Holidays | 146 | |||
Section 17.07.Trust Indenture Act | 146 | |||
Section 17.08.Benefits of Indenture | 147 | |||
Section 17.09.Table of Contents, Headings, Etc | 147 | |||
Section 17.10.Authenticating Agent | 147 | |||
Section 17.11.Execution in Counterparts | 148 | |||
Section 17.12.Severability | 148 | |||
Section 17.13.Waiver of Jury Trial | 148 | |||
Section 17.14.Consent to Jurisdiction; Consent to Service of Process | 149 | |||
Section 17.15.Force Majeure | 149 | |||
Section 17.16.Currency Indemnity | 149 | |||
Section 17.17.Calculations | 150 | |||
Section 17.18.U.S.A. Patriot Act | 150 | |||
Section 17.19.Conflict with Other Documents | 150 | |||
Section 17.20.Communication by Holders of Notes with Other Holders of Notes | 150 | |||
Section 17.21.Rules by Trustee and Agents | 151 | |||
Section 17.22. No Adverse Interpretation of Other Agreements | 151 |
Exhibit A _____ Form of Series A Note | A-1 | |||
Exhibit B _____ Form of Series B Note | B-1 | |||
Exhibit C _____ Form of Conversion Notice | C-1 | |||
Exhibit D _____ Form of Change of Control Purchase Notice | D-1 | |||
Exhibit E _____ Form of Assignment and Transfer | E-1 | |||
Exhibit F _____ Form of Notation of Guarantee | F-1 | |||
Exhibit G _____ Form of Supplemental Indenture | G-1 |
v
Definitions; Interpretations
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Issue, Description, Execution, Registration and Exchange of Notes
43
44
45
46
47
48
49
50
51
[Intentionally Omitted]
Particular Covenants of the Company
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
Merger, Consolidation or Sale of Assets
83
84
Lists of Noteholders and Reports by the Company and the Trustee
85
Defaults and Remedies
86
87
88
89
90
91
92
93
94
Concerning the Trustee
95
96
97
98
99
100
101
102
Concerning the Noteholders
103
104
Note Guarantees
105
106
107
108
Supplemental Indentures
109
110
111
112
113
Satisfaction and Discharge
Immunity of Incorporators, Shareholders, Officers and Directors
114
Conversion of Notes
115
116
117
118
CR1= | CR0 X OS1 | |||
OS0 |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable; | |
CR1 = | the Conversion Rate in effect immediately after the open of business on such Adjustment Date or effective date, as applicable; | |
OS0 = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Adjustment Date or effective date, as applicable; and | |
OS1 = | the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. |
119
CR1=CR0 X | OS0 + X | |
OS0 + Y |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date for such issuance; | |
CR1 = | the Conversion Rate in effect immediately after the open of business on such Adjustment Date; | |
OS0 = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Adjustment Date; | |
X = | the total number of shares of Common Stock issuable pursuant to such rights or warrants; and | |
Y = | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrantsdivided bythe average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Days ending on the Trading Day immediately preceding the date of announcement of the issuance of such rights or warrants. |
120
CR1=CR0 X | SP0 | |||
SP0 + FMV |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date for such distribution; | |
CR1 = | the Conversion Rate in effect immediately after the open of business on such Adjustment Date; | |
SP0 = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Days ending on the Trading Day immediately preceding the Adjustment Date for such distribution; and | |
FMV = | the Fair Market Value (as determined by the Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of the Common Stock on the Adjustment Date for such distribution. |
121
CR1=CR0 X | FMV0 + MP0 | |||
MP0 |
CR0 = | the Conversion Rate in effect immediately prior to the end of the Valuation Period; | |
CR1 = | the Conversion Rate in effect immediately after the end of the Valuation Period; | |
FMV0= | the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after, and including, the Ex-Dividend Date of the Spin-off (the “Valuation Period”); and | |
MP0 = | the average of the Last Reported Sale Prices of Common Stock over the Valuation Period. |
122
CR1=CR0 X | SP0 | |||
SP0 — C |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date for such dividend or distribution; | |
CR1 = | the Conversion Rate in effect immediately after the open of business on the Adjustment Date for such dividend or distribution; | |
SP0 = | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Adjustment Date for such dividend or distribution; and | |
C = | the amount in cash per share the Company distributes to holders of Common Stock. |
CR1=CR0 X | AC + (SP1 X OS1 | |||
OS0 X SP1 |
CR0 = | the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | |
CR1 = | the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | |
AC = | the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased in such tender or exchange offer; |
123
OS0 = | the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires; | |
OS1 = | the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares accepted for purchase or exchanged in such tender or exchange offer); and | |
SP1 = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Days commencing on the Trading Day next succeeding the date such tender or exchange offer expires. |
CR1=CR0 X | OS0 + X | |||
OS0 + Y |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date for such issuance; | |
CR1 = | the Conversion Rate in effect immediately after the open of business on such Adjustment Date; | |
OS0 = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Adjustment Date on a fully diluted basis determined in accordance with the treasury stock method of computing fully diluted earnings per share in accordance with U.S. GAAP; |
124
X = | (i) the total number of shares of Common Stock issued (in the case of an issuance or sale of Common Stock) or (ii) the total number of shares of Common Stock issuable upon exercise, conversion or exchange of the Common Stock Equivalents issued or sold (in the case of an issuance or sale of Common Stock Equivalents); and | |
Y = | the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable (before the deduction of any underwriting or placement agency fees, discounts, commissions and expenses) (i) in respect of such shares of Common Stock issued or sold (in the case of an issuance or sale of Common Stock) or (ii) in respect of the shares of Common Stock issuable upon exercise, conversion or exchange of the Common Stock Equivalents issued or sold (in the case of an issuance or sale of Common Stock Equivalents) divided by (B) the Common Stock Trading Price. |
125
CR1=CR0 X | OS0 + X | |||
OS0 + Y |
CR0 = | the Conversion Rate in effect immediately prior to the open of business on the Adjustment Date for such issuance; | |
CR1 = | the Adjusted Conversion Rate; | |
OS0 = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Adjustment Date on a fully diluted basis determined in accordance with the treasury stock method of computing fully diluted earnings per share in accordance with U.S. GAAP; | |
X = | (i) the total number of shares of Common Stock issued (in the case of an issuance or sale of Common Stock) or (ii) the total number of shares of Common Stock issuable upon exercise, conversion or exchange of the Common Stock Equivalents issued or sold (in the case of an issuance or sale of Common Stock Equivalents); and | |
Y = | the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable (before the deduction of any underwriting or placement agency fees, discounts, commissions and expenses) (i) in respect of such shares of Common Stock issued or sold (in the case of an issuance or sale of Common Stock) or (ii) in respect of the shares of Common Stock issuable upon exercise, conversion or exchange of the Common Stock Equivalents issued or sold (in the case of an issuance or sale of Common Stock Equivalents) divided by (B) the Conversion Price in effect immediately preceding such issuance or sale. |
126
127
128
129
Effective Date | Stock Price | |||||||||||||||||||
$ | 0.45 | $ | 0.50 | $ | 0.55 | $ | 0.60 | $ | 0.63 | |||||||||||
9/25/2011 | 748.3294 | 591.1127 | 473.8027 | 383.8891 | 0.0000 | |||||||||||||||
9/25/2012 | 596.114 | 406.1116 | 253.4141 | 127.2355 | 0.0000 | |||||||||||||||
9/25/2013 | 553.1110 | 368.2784 | 219.7179 | 96.7258 | 0.0000 | |||||||||||||||
9/25/2014 | 508.3360 | 332.1373 | 191.0734 | 74.8164 | 0.0000 | |||||||||||||||
9/25/2015 | 447.0650 | 286.5368 | 160.8011 | 58.3179 | 0.0000 | |||||||||||||||
9/25/2016 | 303.8829 | 180.5104 | 95.3750 | 31.8085 | 0.0000 |
130
131
132
133
134
135
Intercreditor Agreement
Collateral
136
137
138
139
140
141
142
143
144
Miscellaneous Provisions
145
146
147
as Authenticating Agent, certifies that this is one of the Notes described in the within-named Indenture.
By:
Authorized Officer
148
149
150
151
HORIZON LINES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
HORIZON LINES, LLC HORIZON LINES HOLDING CORP. HAWAII STEVEDORES, INC. HORIZON LINES OF PUERTO RICO, INC. HORIZON LINES OF ALASKA, LLC HORIZON LINES OF GUAM, LLC HORIZON LINES VESSELS, LLC H-L DISTRIBUTION SERVICE, LLC HORIZON LOGISTICS, LLC AERO LOGISTICS, LLC SEA-LOGIX, LLC HORIZON SERVICES GROUP, LLC | ||||
By: | ||||
Name: | ||||
Title: |
U.S. BANK NATIONAL ASSOCIATION, as Trustee and Collateral Agent | ||||
By: | ||||
Name: | ||||
Title: |
2
A-1
No. | Initially $ |
A-2
A-3
HORIZON LINES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By: | ||||
A-4
6.00% Series A Convertible Senior Secured Note due 2017
A-5
A-6
A-7
6.00% Series A Convertible Senior Secured Notes due 2017
Principal Amount | Signature of | |||||||
Amount of | Amount of | of this Global Note | authorized | |||||
decrease in | increase in | following such | signatory of | |||||
Principal Amount | Principal Amount | decrease or | Trustee or | |||||
Date of Exchange | of this Global Note | of this Global Note | increase | Custodian | ||||
A-8
B-1
No. _____ | Initially $ _____ |
B-2
B-3
HORIZON LINES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By: | ||||
B-4
6.00% Series B Convertible Senior Secured Note
B-5
B-6
B-7
B-8
6.00% Series B Convertible Senior Secured Notes
Principal Amount | Signature of | |||||||
Amount of | Amount of | of this Global Note | authorized | |||||
decrease in | increase in | following such | signatory of | |||||
Principal Amount | Principal Amount | decrease or | Trustee or | |||||
Date of Exchange | of this Global Note | of this Global Note | increase | Custodian | ||||
B-9
To: | HORIZON LINES, INC. U.S. BANK NATIONAL ASSOCIATION, as Trustee and Conversion Agent |
Dated: | ||||||
Signature(s) |
Signature Guarantee
Signature(s) must be guaranteed
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if
shares of Common Stock are to be issued, or
Notes to be delivered, other than
to and in the name of the registered Holder.
C-1
Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered Holder: | ||
(Name) | ||
(Street Address) | ||
(City, State and Zip Code) | ||
Please print name and address |
Principal amount to be converted (if less than all): | ||
$ ,000 NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. | ||
Social Security or Other Taxpayer Identification Number |
C-2
To: | HORIZON LINES, INC. U.S. BANK NATIONAL ASSOCIATION, as Trustee |
Signature(s) | ||
Social Security or Other Taxpayer | ||
Identification Number | ||
Principal amount to be repaid (if less than all): | ||
$ ,000 NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. |
D-1
Dated: | ||
Signature(s) | ||
Signature Guarantee |
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if Notes are to be delivered, other
than to and in the name of the registered Holder.
E-1
F-1
HORIZON LINES, LLC HORIZON LINES HOLDING CORP. HAWAII STEVEDORES, INC. HORIZON LINES OF PUERTO RICO, INC. HORIZON LINES OF ALASKA, LLC HORIZON LINES OF GUAM, LLC HORIZON LINES VESSELS, LLC H-L DISTRIBUTION SERVICE, LLC HORIZON LOGISTICS, LLC AERO LOGISTICS, LLC SEA-LOGIX, LLC HORIZON SERVICES GROUP, LLC | ||||
By: | ||||
Name: | ||||
Title: | ||||
F-2
G-1
G-2
[NEW GUARANTOR] | ||||
By: | ||||
Name: | ||||
Title: | ||||
U.S. BANK NATIONAL ASSOCIATION, as Trustee | ||||
By: | ||||
Name: | ||||
Title: |
G-3