8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 11, 2006

HORIZON LINES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-32627	74-3123672
(State or Other Jurisdiction of Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

4064 Colony Road, Suite 200

Charlotte, North Carolina 28211

(Address of Principal Executive Offices, including Zip Code)

(704) 973-7000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

ITEM 1.01  Entry into a Material Definitive Agreement

Horizon Lines, LLC (“Horizon Lines”), an indirect wholly owned subsidiary of Horizon Lines, Inc. (the “Company”), on April 11, 2006 completed a series of agreements with Ship Finance International Limited (“SFL”) and certain of its subsidiaries to charter five container vessels, each with capacity of 2,824 twenty-foot equivalent units (collectively, the “Vessels”). SFL Holdings LLC (“SFL Holdings”), a wholly owned subsidiary of SFL, has entered into five separate memoranda of agreement (collectively, the “MoAs”) as a buyer with the companies that have existing contracts with Hyundai Mipo Dockyard Co. Ltd. for the construction of the Vessels (collectively, the “Sellers”). SFL has guarantied the performance by SFL Holdings of its obligations under the MoAs. Upon delivery of each Vessel to SFL Holdings by the applicable seller under the applicable MoA, SFL Holdings will transfer the Vessel to one of the following of its wholly owned subsidiaries (collectively, the “Shipowners”): HL Eagle LLC, HL Falcon LLC, HL Hawk LLC, HL Hunter LLC, and HL Tiger LLC. The Shipowner to whom the Vessel is transferred will in turn bareboat charter the Vessel to Horizon Lines.

The purchase price to be paid by the Shipowners of the Vessels upon delivery will be partially funded with the proceeds of bank term loans to the Shipowners in the aggregate principal amount of $210 million made by a syndicate of banks (the “Fortis-Led Lenders”) led by Fortis Capital Corp. (“Fortis”). The credit agreement governing these bank term loans (the “Fortis Credit Agreement”) also provides for the issuance of standby letters of credit (the “Fortis Letters of Credit”), which have been used as security deposits under certain of the MoAs. In addition, the Fortis Credit Agreement provides for forward starting swaps to permit the Shipowners to lock in the interest rate on the term loan related to each Vessel.

The agreement of Horizon Lines and SFL, SFL Holdings and the Shipowners with respect to the aforementioned transactions is reflected in an Agreement to Acquire and Charter, a Reimbursement Agreement, and five separate Bareboat Charters. In addition, the Company has issued a Guarantee in favor of the Shipowners with respect to the performance by Horizon Lines of its obligations under the Agreement to Acquire and Charter, the Reimbursement Agreement, the Bareboat Charters, and an Interest and L/C Liability Agreement, among Horizon Lines, SFL and Fortis. Copies of the Agreement to Acquire and Charter, Guarantee, Reimbursement Agreement, and Interest and L/C Liability Agreement are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and incorporated herein by reference.

As partial security for the Shipowners’ obligations under the Fortis Credit Agreement, the Shipowners have assigned their interests to Fortis in the Reimbursement Agreement, Bareboat Charters, and the Guarantee, and SFL has guaranteed the Shipowners’ liabilities with respect to the interest-rate swaps and the Fortis Letters of Credit issued under the Fortis Credit Agreement during the period prior to vessel delivery, except to the extent any such

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liability is the result of a default by Horizon Lines under the Agreement to Acquire and Charter.

During the pre-delivery period, SFL Holdings will be liable to the Sellers under the MoAs for any failure to perform its obligations as the buyer thereunder. To partially secure its performance of the MoAs, SFL Holdings has caused security deposits to made on April 11, 2006 in the form of cash (from sources other than Horizon Lines) and Fortis Letters of Credit in the aggregate amount of $36,507,500 (collectively, the “SFL Security Deposits”). The aggregate stated amount of the Fortis Letters of Credit included in the SFL Security Deposits is $25,537,500.

Pursuant to the Agreement to Acquire and Charter and the Reimbursement Agreement, Horizon Lines has agreed to reimburse SFL, SFL Holdings and the Shipowners for their respective losses if there is a default by SFL Holdings as the buyer under the MoAs except under certain circumstances. The losses covered include forfeiture of the SFL Security Deposits, any damage claims made against SFL Holdings by the Sellers under the MoAs (to the extent such claims exceed the SFL Security Deposits), any liabilities of SFL and the Shipowners to Fortis for any draws on the letters of credit, any interest due under the Fortis Credit Agreement as a result of any such draws, and any interest-rate swap breakage fees. In addition, SFL Holdings has the right to require Horizon Lines to assume its obligations to the Sellers under the MoAs under certain circumstances.

To secure certain of its obligations under the Reimbursement Agreement (which was assigned by the Shipowners to Fortis), Horizon Lines has delivered letters of credit to Fortis in an aggregate stated amount of $29,337,500 (the “Horizon Letters of Credit”). To obtain the Horizon Letters of Credit, Horizon Lines, together with Horizon Lines Holding Corp., UBS AG, Stamford Bank, as administrative agent (in such capacity, the “Administrative Agent”), UBS AG, Stamford Branch, as issuing bank, and certain lenders, entered into Amendment No. 2 (“Amendment No. 2”) to the Amended and Restated Credit Agreement, dated as of April 7, 2005, (as amended, the “Pre-Existing Horizon Credit Agreement”), among such parties and the other parties thereto (if any). Amendment No. 2 amended the Pre-Existing Horizon Credit Agreement by, among other things, (i) increasing the aggregate amount of letters of credit permitted under the Pre-Existing Horizon Credit Agreement from $20,000,000 to $41,000,000 and (ii) permitting Horizon Lines or any of its subsidiaries to guarantee, directly or indirectly, up to $42,500,000 of the obligations of SFL and/or any of its subsidiaries or affiliates in connection with the charter by Horizon Lines of the Vessels from the Shipowners. A copy of Amendment No. 2 is attached hereto as Exhibit 10.5 and incorporated herein by reference. The Horizon Letters of Credit were issued by UBS AG, Stamford Branch, pursuant to the Pre-Existing Horizon Credit Agreement, as amended by Amendment No. 2. The Horizon Letters of Credit will be returned to Horizon Lines following the release to SFL Holdings of the SFL Security Deposits for the Vessels.

The Company and Horizon Lines have entered into an Agreement regarding Debt Assumption with SFL, SFL Holdings, the Shipowners and Fortis, pursuant to which Horizon Lines has the right to assume the Shipowners’ obligations under the

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Fortis Credit Agreement in the event that Horizon Lines exercises its right under the Bareboat Charters to purchase all of the Vessels or the equity interests in the Shipowners, provided that Horizon Lines delivers the collateral documentation required under the Fortis Credit Agreement and reaches agreement with the Fortis-Led Lenders to conform the financial covenants of the Shipowners under the Fortis Credit Agreement to those contained in the Pre-Existing Horizon Lines Credit Agreement, as amended, or, if there is no such credit agreement, covenants to be negotiated.

The Bareboat Charters for the Vessels are “hell or high water” charters, and Horizon Lines’ obligation to pay charter hire to the Shipowners for the Vessels is absolute and unconditional. The aggregate annual charter hire for the Vessels is approximately $32 million based on certain assumptions with respect to final vessel price and interest rates that will be adjusted on the date of the delivery of the particular Vessel. Horizon Lines is responsible for crewing, insuring, maintaining and repairing the Vessels and all other operating costs. The term of each of the Bareboat Charters is twelve years from the date of delivery of the related Vessel, with a three-year renewal option exercisable by Horizon Lines. In addition, Horizon Lines has the option to purchase the Vessels following the five, eight, twelve and, if applicable, fifteen year anniversaries of the date of delivery at pre-agreed purchase prices. If Horizon Lines elects to purchase the Vessels after the fifth or eighth year, it has the right to assume the outstanding debt under the Fortis Credit Agreement, which will be credited against the purchase price paid by it for such purchase. If Horizon Lines elects not to purchase the Vessels at the end of the initial twelve-year period and the Shipowners sell the Vessels for less than a specified amount, Horizon Lines is responsible for paying the amount of such shortfall, which shall not exceed $3,750,000 per Vessel. If the Vessels are to be sold by the Shipowners to an affiliated party for less than a different specified amount, Horizon Lines has the right to purchase the Vessels for that different specified amount.

In connection with its consent to the assignment of the Bareboat Charters to Fortis, Horizon Lines has entered into separate Subordination and Non-Disturbance Agreements, dated April 10, 2006, with Fortis with respect to each of the Vessels. Under the terms of those agreements, Horizon Lines has agreed to subordinate the lien of the Bareboat Charters to the lien of mortgages in favor of Fortis, and Fortis has agreed to allow Horizon Lines to have peaceful possession and quiet enjoyment of the Vessels following any foreclosure or other sale or transfer by Fortis of the Vessels provided that Horizon Lines is not in default under the Bareboat Charters.

ITEM 2.03  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The disclosure contained in Item 2.01 is incorporated herein by reference.

ITEM 2.04  Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

The disclosure contained in Item 2.01 is incorporated herein by reference.

ITEM 8.01  Other Events

On April 11, 2006, the Company issued a press release with respect to the matters referred to in Item 2.01 A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

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SAFE HARBOR STATEMENT

This Current Report on Form 8-K contains forward-looking statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “will,” “would,” “could” and similar expressions or phrases identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this Current Report on Form 8-K might not occur. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit No.	Description
10.1†*	Agreement to Acquire and Charter dated as of April 7, 2006, among Ship Finance International Limited, SFL Holdings, LLC, the five companies listed in Appendix I thereto, and Horizon Lines, LLC.
10.2*	Guarantee, dated April 7, 2006, by Horizon Lines, Inc. in favor of each of HL Tiger LLC, HL Hunter LLC, HL Hawk LLC, HL Falcon LLC, and HL Eagle LLC.
10.3*	Reimbursement Agreement, dated April 7, 2006, among Horizon Lines, LLC, Ship Finance International Limited, SFL Holdings LLC and the five companies listed on Appendix I thereto.
10.4*	Interest and L/C Liability Agreement dated April 10, 2006, among Horizon Lines, LLC, Ship Finance International Limited and Fortis Capital Corp., as Security Trustee for the Lenders and the Swap Providers.
10.5*	Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of April 7, 2006, among Horizon Lines, LLC, UBS AG, Stamford Branch, as Administrative Agent, UBS AG, Stamford Branch, as Issuing Bank, and the Lenders party thereto.
99.1*	Press Release dated April 11, 2006.

* Filed herewith.

† Portions of this document were omitted and filed separately pursuant to a request for confidential treatment in accordance with Rule 406 of the Securities Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HORIZON LINES, INC.
	(Registrant)
Date: April 17, 2006	By:	/S/    M. MARK URBANIA
		M. Mark Urbania
		Senior Vice President, Chief Financial Officer
		and Assistant Secretary

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EXHIBIT INDEX

Exhibit No.	Description
10.1†*	Agreement to Acquire and Charter dated as of April 7, 2006, among Ship Finance International Limited, SFL Holdings, LLC, the five companies listed in Appendix I thereto, and Horizon Lines, LLC.
10.2*	Guarantee, dated April 7, 2006, by Horizon Lines, Inc. in favor of each of HL Tiger LLC, HL Hunter LLC, HL Hawk LLC, HL Falcon LLC, and HL Eagle LLC.
10.3*	Reimbursement Agreement, dated April 7, 2006, among Horizon Lines, LLC, Ship Finance International Limited, SFL Holdings LLC and the five companies listed on Appendix I thereto.
10.4*	Interest and L/C Liability Agreement dated April 10, 2006, among Horizon Lines, LLC, Ship Finance International Limited and Fortis Capital Corp., as Security Trustee for the Lenders and the Swap Providers.
10.5*	Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of April 7, 2006, among Horizon Lines, LLC, UBS AG, Stamford Branch, as Administrative Agent, UBS AG, Stamford Branch, as Issuing Bank, and the Lenders party thereto.
99.1*	Press Release dated April 11, 2006.

* Filed herewith.

† Portions of this document were omitted and filed separately pursuant to a request for confidential treatment in accordance with Rule 406 of the Securities Act.

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EX-10.1

Exhibit 10.1

Execution Copy

AGREEMENT TO ACQUIRE AND CHARTER

THIS AGREEMENT TO ACQUIRE AND CHARTER is made and entered into this 7^th day of April 2006, by and between SHIP FINANCE INTERNATIONAL LIMITED, a Bermuda company (“SFL”), SFL HOLDINGS, LLC, a Delaware limited liability company and direct wholly-owned subsidiary of SFL (“Holdings”), the five companies listed in Appendix 1 hereto, each a Delaware limited liability company and a direct wholly-owned subsidiary of Holdings (each an “Owner” and collectively, the “Owners”), and HORIZON LINES, LLC, a Delaware limited liability company (“HLL”).

RECITALS

WHEREAS, HLL desires to charter five container vessels of approximately 2,800 TEU capacity per vessel for operation in its Transpacific-1 (“TP-1”) service;

WHEREAS, Hyundai Mipo Dockyard Co. Ltd., a Korean company (“Builder”), has entered into a series of Shipbuilding Contracts with subsidiaries of E.R. Schiffahrt GMBH & Cie. KG (“ER”) for the design, construction, sale and delivery of 2,824 TEU container vessels (each an “ER Vessel”);

WHEREAS, Builder has also entered into a series of Shipbuilding Contracts with subsidiaries of Tsakos Shipping & Trading S.A., a Panamanian company (“Tsakos”), for the design, construction, sale and delivery of 2,824 TEU container vessels (each a “Tsakos Vessel”);

WHEREAS, with certain modifications to satisfy U.S. flag and union and other operational requirements, the ER Vessels and the Tsakos Vessels would be suitable for employment in HLL’s TP-1 service;

WHEREAS, SFL is engaged in the business of owning and chartering vessels;

WHEREAS, SFL, through its newly-formed special purchase subsidiary Holdings, is willing to purchase two of the ER Vessels and three of the Tsakos Vessels (each a “Vessel” and, collectively, the “Vessels”) upon the condition that HLL assume certain risks relating to the pre-delivery period other than those arising from the fault of SFL, Holdings or any Owner (each an “SFL Party” and collectively, the “SFL Parties”);

WHEREAS, concurrent with the delivery of each Vessel to Holdings, SFL will provide funds to Holdings which, along with the proceeds from the Credit Facility (as defined below), are for the purpose of enabling Holdings to purchase such Vessel from the seller thereof and simultaneously transfer ownership of the Vessel to the intended Owner thereof as indicated on Appendix 1 hereto;

WHEREAS, concurrent with the delivery of each Vessel by Holdings to the intended Owner thereof, such Owner will demise charter the Vessel to HLL, and HLL shall accept such Vessel on demise charter from such Owner;

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THEREFORE, in consideration of the premises, the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, SFL, Holdings, the Owners and HLL hereby agree as follows:

ARTICLE I

AGREEMENT TO ACQUIRE AND CHARTER

1.1 Agreement to Acquire the Vessels. (a) Concurrently with the execution of this Agreement, Holdings has entered into the following agreements to acquire the Vessels:

(i) that certain Memorandum of Agreement, dated the date hereof, with Fortysixth Dragon Shipping Inc., a Liberian company and wholly-owned subsidiary of ER, for the sale and purchase of the ER Vessel designated Builder’s Hull No. 0409 (“Hull 0409”);

(ii) that certain Memorandum of Agreement, dated the date hereof, with Fiftyninth Dragon Shipping Inc., a Liberian company and wholly-owned subsidiary of ER, for the sale and purchase of the ER Vessel designated Builder’s Hull No. 0427 (“Hull 0427”);

(iii) that certain Memorandum of Agreement, dated the date hereof, with Fortune Spirit S.A., a Panamanian company and wholly-owned subsidiary of Tsakos, for the sale and purchase of the Tsakos Vessel designated Builder’s Hull No. 0387 (“Hull 0387”);

(iv) that certain Memorandum of Agreement, dated the date hereof, with Sea Merit S.A., a Panamanian company and wholly-owned subsidiary of Tsakos, for the sale and purchase of the Tsakos Vessel designated Builder’s Hull No. 0388 (“Hull 0388”); and

(v) that certain Memorandum of Agreement, dated the date hereof, with Triumph Maritime S.A., a Panamanian company and wholly-owned subsidiary of Tsakos, for the sale and purchase of the Tsakos Vessel designated Builder’s Hull No. 0389 (“Hull 0389”);

(each individually an “MOA,” and collectively the “MOAs” and each other party to an MOA being referred to individually as a “Seller” and collectively as the “Sellers”). Subject to the satisfaction or waiver of the conditions set forth in Section 5.1 hereof, SFL agrees to cause Holdings to discharge its obligations under each MOA, including without limitation, its obligation to purchase each Vessel from the Seller thereof pursuant to and in accordance with the terms of the applicable MOA.

(b) Holdings shall fund the cash deposits and shall furnish the letters of credit required under the ER MOAs and Tsakos MOAs, respectively, as amended to the date

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hereof, in each case, on or before the date and time required under each of the applicable MOAs. Each cash deposit shall be in the amount of $5,485,000 and shall be made in accordance with the terms of the amended ER MOAs. Each letter of credit shall be in the amount of $8,512,500 and shall be furnished in accordance with the terms of the amended Tsakos MOAs.

1.2 The Credit Agreement. (a) Concurrently with execution of this Agreement, the Owners have entered into that certain Credit Agreement, dated the date hereof (the “Credit Agreement”), with Fortis Capital Corp. and the other lenders named therein (collectively, the “Lenders”) pursuant to which the Lenders have agreed to advance to the Owners up to a maximum of Two Hundred Ten Million US Dollars ($210,000,000) for the purchase of the Vessels, to be split into five separate advances (each an “Advance”) equal to the lesser of seventy-five percent (75%) of the Adjusted Average Purchase Price (as defined in Section 1.4(b) hereof) of the subject Vessel or Forty-two Million US Dollars ($42,000,000). The Owners hereby agree that so long as no Event of HLL Default (as defined in Section 7.1 hereof) has occurred and is continuing, they shall exercise all of their rights and discharge all of their obligations as Borrower under the Credit Agreement. Capitalized terms used in this Agreement and not otherwise defined shall have the meaning assigned to them in the Credit Agreement.

(b) Except during the continuance of an Event of HLL Default, the Owners hereby agree to follow the reasonable instructions of HLL with respect to the exercise by the Owners of their rights under the following sections of the Credit Agreement unless such instruction would cause a default under the Credit Agreement or a violation of Applicable law.:

Sections 2.02(a), 2.08(b), 2.08(c), 2.11, 2.13(f), 2.15, 3.02 (a), 6.01(p), 8.01(c), 9.01, 9.04(a), 9.07(a) and (c), and the Definitions of “Issuing Lender” and “Classification Society”

In the absence of such instructions, the Owners shall have no obligation hereunder to take any such act with respect to the Credit Agreement. So that HLL may exercise such rights, the Owners shall promptly forward to HLL copies of any and all notices and other communications given by the Owners, or received by the Owners from the Agent, the Lenders or the Security Trustee, under the Credit Agreement. The Owners shall not agree to any amendment of the Credit Agreement or any of the Collateral Documents without the prior written consent of HLL.

(c) The Owners shall request that the Lenders issue Letters of Credit to the Sellers of each of the Tsakos Vessels, on behalf of Holdings, to satisfy Holdings’s deposit requirement under each of the Tsakos MOAs. HLL, SFL, Holdings and the Owners have entered into a Reimbursement Agreement, dated the date hereof, which sets forth the circumstances under which HLL will be obligated to reimburse SFL, Holdings and the Owners, among other things, for any amounts drawn under any such Letter of Credit.

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(d) Notwithstanding anything contained herein or in any other related agreement, the parties agree that HLL shall not in any way be, or be deemed to be, a borrower or an obligor under the Credit Agreement.

1.3 Agreement to Charter the Vessels. (a) Concurrently with the execution of this Agreement, each of the Owners has entered into a demise charter with HLL, dated the date hereof (each a “Charter” and, collectively, the “Charters”), covering the Vessel to be owned by such Owner, pursuant to which the Owner has agreed that, upon delivery of the Vessel to the Owner, the Owner shall demise charter the Vessel to HLL, and HLL shall hire the Vessel from the Owner, subject to and upon the terms and conditions contained in the Charter as amended by the Charter Supplement to be executed by the Owner and HLL upon delivery of the Vessel under the Charter.

(b) It is understood, acknowledged and agreed that delivery of each Vessel from the Seller thereof to Holdings, from Holdings to the intended Owner thereof, and from such Owner to HLL, shall be on back-to-back terms, so that in the absence of an Event of SFL Default (as defined below), (i) Holdings shall not be obligated to accept any Vessel under the applicable MOA unless HLL is also obligated to accept such Vessel under the terms of the applicable Charter, and (ii) acceptance of any Vessel by Holdings under the applicable MOA in accordance with the terms hereof shall be deemed to constitute acceptance of such Vessel by HLL under the terms of the applicable Charter (as defined below).

(c) Holdings and HLL agree that Holdings shall not accept any Vessel under any MOA, and SFL shall not be obligated to provide funds to Holdings, unless HLL simultaneously accepts such Vessel from the intended Owner thereof under the applicable Charter. If Holdings rejects any Vessel under an MOA at the direction of HLL and such rejection is later determined to have been a default under such MOA, such MOA default shall not be considered an Event of SFL Default hereunder.

1.4 Transfer of Vessels to Owners; Funding of Owners. (a) With respect to each Vessel, upon delivery of the Vessel to Holdings under the applicable MOA, provided no Event of HLL Default (as defined in Section 7.1(a) hereof) has occurred and is continuing, Holdings shall concurrently sell and transfer ownership of the Vessel to the intended Owner thereof under the applicable Resale Agreement (as defined in the Credit Agreement), and such Owner shall purchase the Vessel, for a purchase price equal to the “Adjusted Average Purchase Price” of such Vessel as defined in Section 1.4(b) below. Each Owner shall fund the purchase of its Vessel from Holdings (i) by making a Borrowing under the Credit Agreement in an amount equal to the lesser of 75% of the Adjusted Average Purchase Price of the Vessel and $42,000,000, and (ii) to the extent not funded by such Borrowing, by an equity investment from Holdings in such Owner. Holdings agrees to make such equity investment in each of the Owners as is necessary to enable such Owner to purchase its Vessel at the Adjusted Average Purchase Price and deliver such Vessel to HLL, and thereafter, from time to time, to provide funds as necessary to enable such Owner to discharge its obligations hereunder and under each of the other Transaction Documents to which it is a party.

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(b) For purposes of this Agreement, the “Average Purchase Price” of each Vessel as of the date hereof is agreed to be                 . The “Adjusted Average Purchase Price” of each Vessel shall be equal to the Average Purchase Price of such Vessel (as adjusted pursuant to Section 1.4(c) below) plus or minus the amount of any increase or decrease in the purchase price of such Vessel payable by or to Holdings under the MOA for such Vessel that occurs after the date hereof (or, if applicable, after the date of any adjustment pursuant to Section 1.4(c) below); provided, however, that increases or decreases (if any) in the purchase price of a Vessel under the MOA for such Vessel that are designated by and funded by HLL as a Leasehold Improvement (as defined in Section 2.6 hereof) shall not be considered in determining the Adjusted Average Purchase Price of such Vessel. Notwithstanding the foregoing, any decrease in the purchase price of a Vessel under an MOA as the result of a credit given for liquidated damages due to late delivery of such Vessel shall be subject to Section 2.10 hereof and shall not be considered in determining the Adjusted Average Purchase Price of the such Vessel.

(c) If the Adjusted Average Purchase Price of any Vessel on its Vessel Delivery Date would be greater than Fifty-Six Million US Dollars ($56,000,000), the Average Purchase Price of such Vessel and each of the other Vessels not yet purchased by Holdings and, to the extent necessary, the Adjusted Average Purchase Price of the Vessels previously purchased by Holdings (the “Previously Purchased Vessels”) shall be recalculated such that, to the maximum extent possible, the Adjusted Average Purchase Price of each Vessel will not be greater than $56,000,000. If, in making such recalculation, it is necessary to recalculate and increase the Adjusted Average Purchase Price of any Previously Purchased Vessel, the relevant Owner shall pay the amount of such increase to Holdings. To fund this additional payment, the Owner of such Vessel shall request an additional Borrowing under the Credit Agreement with respect to such Vessel and Holdings shall make an additional equity investment in such Owner, such that the ratio of aggregate Advances and equity used by such Owner to finance the purchase of the Previously Purchased Vessel shall be equal to 75% to 25% (the “Desired Debt/Equity Ratio”). If the recalculated Adjusted Average Purchase Price for such Previously Purchased Vessel is less than the previously-determined Adjusted Average Purchase Price for such Vessel, Holdings shall refund such excess to such Owner and such Owner shall prepay a portion of the aggregate Advances made with respect to such Vessel such that the Desired Debt/Equity Ratio for such Vessel is achieved. Any adjustments required pursuant to this Section 1.4(c) shall be made, to the maximum extent possible, to minimize the number of Previously Purchased Vessels effected by such adjustments and to minimize any costs that would be payable by the applicable Owner under the Credit Agreement or the Master Agreement. In no event shall Holdings be required to take delivery of any Vessel or to sell such Vessel to an Owner if the Adjusted Average Purchase Price of such Vessel is greater than $56,000,000.

(d) On the Vessel Delivery Date of the last Vessel to be delivered to HLL (hereafter, the “Calculation Date”), HLL shall pay to Holdings an amount equal to the difference between (i) the aggregate interest accrued at a rate equal to the internal rate of

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return of the Owner’s anticipated pre-tax cash flows over the Basic Period (the “Owner’s IRR”) divided by 365 (the “Daily IRR”) on                  for each Tsakos Vessel for the actual number of days elapsed from the Vessel Delivery Date of such Tsakos Vessel to the Calculation Date, and (ii) the aggregate interest accrued at the Daily IRR on                  for each ER Vessel for the actual number of days elapsed from the Delivery Date of such ER Vessel to the Calculation Date.

(e) With respect to each ER Vessel, upon the release of the cash deposit made by Holdings under the MOA with respect to such Vessel, HLL shall pay to Holdings an amount equal to the difference between (i) the interest accrued at a rate of ten percent (10%) divided by 365 on the amount of the cash deposit made by Holdings with respect to such Vessel for the actual number of days from the date such deposit was made to the date such deposit was released, and (ii) the aggregate interest on such cash deposit received by Holdings from the relevant Seller with respect to the period referred to in clause (i).

1.5 Adjustments to Bareboat Charter Terms. (a) It is recognized and acknowledged that the Basic Hire amounts, EBO Prices and Stipulated Loss Values set forth in the Charters, and the debt amortization schedule set forth in Appendix 2 hereto, all on the date hereof are based on certain pricing assumptions, including an assumed Adjusted Average Purchase Price and an assumed Fixed Interest Rate (as defined below). The pricing assumptions for each Vessel as of the date hereof are set forth in Appendix 2 hereto.

(b) Upon delivery of each Vessel, the Basic Hire payable during the Basic Period, the EBO Prices, the Stipulated Loss Values and the debt amortization schedule for such Vessel shall be adjusted to take into account any differences between (i) the Adjusted Average Purchase Price of such Vessel as of the Vessel Delivery Date for such Vessel, and the Adjusted Average Purchase Price as set forth in Appendix 2 hereto, and (ii) the actual fixed interest rate applicable to the Tranche determined pursuant to the Designated Transactions and the Applicable Margin for such Vessel (for each Vessel, the “Fixed Interest Rate”) as of the Vessel Delivery Date for such Vessel and the Fixed Interest Rate for such Vessel as set forth in Appendix 2 hereto. Adjustments pursuant to this Section 1.5(b) shall:

(i) be made using the same assumptions (other than the Adjusted Average Purchase Price and Fixed Interest Rate assumptions) and methodology used to calculate the Basic Hire payable during the Basic Period, the EBO Prices, the Stipulated Loss Values and the debt amortization schedule as set forth in Appendix 2 hereto;

(ii) be based on a mortgage-style amortization schedule with respect to the Tranche for the relevant Vessel down to a                  balloon at the end of the Basic Period; and

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(iii) subject to subsections (i) and (ii) above, be made in a manner that minimizes the cost to HLL while maintaining the Owner’s IRR.

(c) If following delivery of a Vessel under the Charter for such Vessel, the Adjusted Average Purchase Price of such Vessel is further adjusted pursuant to Section 1.4(c) above, the Basic Hire payable during the Basic Period, the EBO Prices, the Stipulated Loss Values and the debt amortization schedule for such Vessel shall be adjusted as described in Section 1.5(b) above to take into account the change in the Adjusted Average Purchase Price of such Vessel and any change in the Fixed Interest Rate applicable to such Vessel.

(d) Basic Hire payable during the Renewal Period for each Vessel has been calculated on the date hereof based on the pricing assumptions set forth in Appendix 2 hereto. If the Charter for any Vessel is extended to include the Renewal Period, the Basic Hire payable during the Renewal Period shall be adjusted upon commencement of such Renewal Period to reflect (i) the actual amortization of                  of non-recourse debt outstanding at the end of the Basic Period if different from mortgage style amortization down to a                  balloon at the end of the Renewal Period, and (ii) the actual interest rate on the non-recourse debt outstanding at the end of the Basic Period if different from the assumed interest rate set forth in Appendix 2 hereto; provided, that if the Owner elects not to incur any third-party non-recourse indebtedness during the Renewal Period, the Basic Hire during the Renewal Period shown on Appendix 2 will be the Basic Hire during the Renewal Period. Any adjustment shall be made using the principles described in Section 1.5(b) above.

1.6 SFL Parties’ Obligations. Each of the SFL Parties shall take all steps and do all things necessary to ensure the full and timely performance by each of the other SFL Parties of their respective obligations under this Agreement and under each of the other Transaction Documents (as defined in the Charters) to which they are a party. Each of the SFL Parties shall be jointly and severally liable to HLL for any failure by any of the SFL Parties to perform their respective obligations under this Agreement or under any other Transaction Document.

ARTICLE II

RIGHTS AND DUTIES DURING VESSEL CONSTRUCTION

2.1 Appointment of HLL as Agent; Indemnification. (a) Holdings hereby appoints HLL as its duly authorized agent for all purposes under each of the MOAs with full power and authority to exercise and perform, for and on behalf of Holdings, all of the rights and obligations of Holdings under each MOA as if HLL, rather than Holdings, was named therein as buyer of the Vessel. Holdings agrees to execute and deliver all documents, take all steps and do all things reasonably necessary or appropriate to confer upon HLL full authority to act on Holdings’s behalf with respect to the MOAs as contemplated by this Section 2.1(a). The authority conferred upon HLL by this Section 2.1(a) shall remain in full force and effect only while no Event of HLL Default (as defined in Section 7.1(a) hereof) has occurred and is continuing.

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(b) The exercise by HLL of its authority as Holdings’s agent with respect to the MOAs shall be at the sole risk and expense of HLL. HLL hereby agrees to indemnify, defend and hold Holdings harmless from and against any and all losses, liabilities, claims, costs and expenses arising out of or resulting from the exercise by HLL of its authority as Holdings’s agent with respect to the MOAs.

(c) HLL shall promptly deliver to Holdings a copy of all notices and other material communications given to or received by HLL under any of the MOAs or with respect to any of the Vessels if such notices or other communications are not provided directly to Holdings.

2.2 Limitation on Holdings Exercise of Rights; Duty to Assist. (a) Holdings agrees that so long as no Event of HLL Default has occurred and is continuing, it shall not exercise any of its rights as buyer under any MOA without the prior written approval of HLL; provided that Holdings shall retain the right to inspect the Vessels and examine their specifications to the extent permitted by the MOAs. Holdings shall promptly deliver to HLL a copy of all notices and other communications given to or received by Holdings under any of the MOAs or with respect to any of the Vessels if such notices or other communications are not provided directly to HLL.

(b) If, for any reason, the delegation of authority contained in Section 2.1(a) hereof is ineffective to confer upon HLL all the rights and obligations of Holdings under any of the MOAs, so long as no Event of HLL Default has occurred and is continuing, Holdings shall follow the reasonable instructions of HLL with regard to the exercise by Holdings of its rights, and the performance by Holdings of its obligations, as buyer under such MOA(s); provided that HLL shall indemnify and hold Holdings harmless from and against any and all losses, liabilities, claims, costs and expenses arising out of or resulting from actions taken by Holdings at HLL’s direction or request pursuant to this Section 2.2(b).

2.3 Supervision, Inspection and Attendance at Trials. HLL shall have the right to appoint any supervisors to be appointed by the buyer under the MOAs, as well as the right to provide the key crew to attend and participate in all tests and trials of the Vessels to the extent permitted by the MOAs. All expenses, responsibility and risks associated with the supervisors appointed or the key crew provided by HLL pursuant to this Section 2.3 shall be borne by HLL. HLL shall indemnify and hold SFL, Holdings and the Owners harmless for any losses, liability, costs or expenses incurred by SFL, Holdings or the Owners arising out of or resulting from any act or omission of the supervisors appointed, or the key crew provided, by HLL pursuant to this Section 2.3.

2.4 Changes and Modifications. (a) HLL shall have the right to request changes and modifications to the Vessels to the extent permitted by the relevant MOA; provided that any change or modification that would cause the Adjusted Average Purchase Price of any Vessel to exceed $56,000,000 shall, to the extent possible, be made as a Leasehold Improvement in accordance with Section 2.6 hereof. Notwithstanding the

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foregoing, HLL agrees that it shall not request any change or modification to any Vessel that would materially adversely affect the value of such Vessel or that will cause the delivery date of such Vessel to extend beyond the Commitment Termination Date (as defined in the Credit Agreement) without the prior written consent of Holdings.

(b) HLL shall provide any funds or other security required by the relevant MOA with respect to any changes or modifications requested by HLL. Upon delivery of the subject Vessel, any such funds, together with all interest thereon, shall (to the extent delivered by the Seller) be returned to HLL except to the extent that the change for which the funds were provided is a Leasehold Improvement pursuant to Section 2.6 below, in which case such funds shall be applied to the purchase price of the Vessel under the applicable MOA.

2.5 Buyer’s Supplies. HLL shall have the right to furnish “Buyer Supplies” with respect to any Vessel to the extent permitted by the relevant MOA. All such Buyer Supplies shall be arranged and paid for by HLL and shall be the property of HLL. If the relevant MOA is terminated for any reason, any Buyer Supplies recovered from the Builder shall be delivered to and retained by HLL.

2.6 Leasehold Improvements. (a) HLL shall have the right to elect, and in the circumstances described in Section 2.4(a) and this Section 2.6 the obligation to elect, upon 10 days prior written notice to Holdings, to fund the cost of any change to be made to any Vessel at the time that funding therefor is required under the applicable MOA, and to designate such change as a leasehold improvement (each a “Leasehold Improvement”); provided that any such change does not constitute a structural change to the subject Vessel and will not materially reduce its market value. If HLL makes any Leasehold Improvement to any Vessel, title to such Leasehold Improvement shall vest in and remain the property of (i) HLL to the extent that such Leasehold Improvement shall be readily removable from the Vessel without causing any material damage to the Vessel, and (ii) the Owner to the extent that such Leasehold Improvement shall not be readily removable from the Vessel without causing material damage to the Vessel. Any change to any Vessel that HLL has funded as a Leasehold Improvement pursuant to this Section 2.6 shall not be taken into consideration in the determination of the Adjusted Average Purchase Price of such Vessel. To the maximum extent possible, and subject to Section 2.6(b), HLL shall elect to designate each change or modification to a Vessel as a Leasehold Improvement pursuant to this Section 2.6.

(b) If any change or modification to a Vessel that does not constitute a structural change would cause the Adjusted Average Purchase Price of such Vessel to exceed Fifty-six Million US Dollars ($56,000,000), HLL shall be required to make such change or modification as a Leasehold Improvement and shall fund such Leasehold Improvement in accordance with Section 2.6(a) above.

2.7 Amounts Recovered for Vessel Deficiencies. (a) Any amount recoverable from the Builder (other than liquidated damages for delay) shall be paid to and retained by or credited to Holdings (with all costs of pursuing such recovery to be for HLL’s account) and shall be considered a reduction in the purchase price of such Vessel for purposes of determining the Adjusted Average Purchase Price of such Vessel.

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(b) If pursuant to Section 11(c) of the ER MOAs or Section 24 of the Tsakos MOAs, the Vessel must be accepted subject to a dispute concerning deficiencies, HLL may, unless an Event of HLL Default has occurred and is continuing, either (i) direct the Seller to assign the Building Contract to HLL for the purpose of pursuing claims against the Builder, or (ii) direct the Seller with respect to claims against the Builder under the Building Contract; provided that the SFL Parties shall have no responsibility or liability if the applicable Seller refuses to honor its commitments under the subject MOA. In either case, any amounts recovered from the Builder shall be paid to and retained by Holdings (with all costs of pursuing such recovery to be for HLL’s account) and shall be considered a reduction in the purchase price of such Vessel for purposes of determining the Adjusted Average Purchase Price of such Vessel.

2.8 Termination of an MOA. (a) If a right to terminate an MOA arises, HLL may either (i) direct Holdings to terminate the MOA, or (ii) elect to take, or identify a designee to take, an assignment of the subject MOA. If HLL elects to take an assignment of the subject MOA, the terms of Article III hereof shall apply.

(b) Upon the termination of any MOA, HLL shall be entitled to receive (i), when delivered by the Seller, all monies (if any), and all interest thereon, deposited by HLL with the Seller with respect to changes and modifications to the subject Vessel, and (ii) when delivered by the Builder, all Buyer Supplies furnished by HLL with respect to the subject Vessel. Any amounts recovered from the Seller in connection with the termination of the MOA shall be paid to and retained by HLL (with all costs of pursuing such recovery to be for HLL’s account). The deposit furnished by Holdings under the terminated MOA (whether in the form of cash or a letter of credit), including any interest thereon to the extent payable to Holdings under the applicable MOA, shall be returned to Holdings in accordance with the terms of the applicable MOA.

2.9 Right to Maintain ER Building Contract. If the Seller of either ER Vessel informs HLL that it intends to cancel the Building Contract for such Vessel in accordance with the terms thereof, and HLL desires to maintain the Building Contract, HLL may (to the extend permitted by the MOA) either (i) take, or identify a designee to take, an assignment of the Building Contract (as contemplated by Section 12(b)(i) of the ER MOAs), or (ii) direct Holdings to direct the Seller to maintain the Building Contract (as contemplated by Section 12(b)(ii) of the ER MOAs), provided that all amounts payable to the Seller and or the Builder in connection with such election shall be for HLL’s account. If HLL does not elect to maintain the Building Contract and the subject ER MOA is therefore terminated, the terms of Section 2.8 hereof shall apply, and the cash deposit furnished by Holdings under the terminated MOA, including any interest thereon pursuant to Section 1.4(e) hereof, shall be returned to Holdings. If HLL elects to take, or elects a designee to take, an assignment of the Building Contract, it shall so notify Holdings, and Holdings shall have a period of five (5) days to notify HLL that Holdings elects to take an assignment of the Building Contract, in which case all aspects of this transaction shall remain in place.

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2.10 Liquidated Damages for Late Delivery and Vessel Deficiencies. (a) Any liquidated damages for late delivery of a Vessel that are paid to Holdings under the MOA for such Vessel shall be paid by Holdings to, and shall be retained by, HLL. If the purchase price of any Vessel payable by Holdings is reduced as the result of a credit given for liquidated damages for late delivery of such Vessel, Holdings shall pay to HLL an amount equal to such credit upon delivery of the Vessel by the Owner thereof to HLL under the Charter for such Vessel. Liquidated damages for late delivery of a Vessel (whether paid by the Builder in cash or given as a credit) shall not be taken into consideration in determining the Adjusted Average Purchase Price of the subject Vessel.

(b) Liquidated damages for vessel deficiencies that affect the purchase price of the Vessel under the MOA for such Vessel will be taken into consideration in determining the Adjusted Average Purchase Price of the subject Vessel.

2.11 Vessel Warranties. Upon delivery of each Vessel to Holdings and acceptance by HLL of such Vessel under the Charter for such Vessel, Holdings shall assign the MOA covering such Vessel to HLL for the purpose of transferring to HLL all of Holdings’ rights with respect to the Builder’s warranty under the Building Contract for such Vessel as set forth in Section 14 of the ER MOAs and Section 21 of the Tsakos MOAs. If Holdings is unable for any reason to assign the MOA to HLL, Holdings shall pursue any warranty claims in its own name for the benefit of HLL and at HLL’s expense and, in doing so, shall act strictly in accordance with the reasonable instructions of HLL.

2.12 General Indemnity Related to MOAs. In consideration of the agreement of SFL, Holdings and the Owners to enter into the transaction described in the recitals hereto, HLL agrees that if Holdings is declared to be in default under any MOA (any such default, an “MOA Default”), unless such MOA Default is due to an event described in the proviso at the end of this Section 2.12, HLL shall indemnify, defend and hold SFL, Holdings and the Owners harmless from and against each of the following:

(i) the reasonable fees and expenses of legal counsel to Holdings and the Owners in connection with such MOA Default;

(ii) any damages payable to the Seller under such MOA resulting from such MOA Default (including damages payable by SFL pursuant to its guarantee of Holdings’s obligations under the MOA); and

(iii) any other costs, fees, liabilities and expenses incurred by SFL, Holdings or the Owners in connection with such default;

provided, that HLL shall not be obligated to indemnify or reimburse SFL, Holdings or the Owners hereunder if the MOA Default was due to or resulted from the gross negligence, willful misconduct of SFL, Holdings or any Owner, an act or omission of SFL, Holdings

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or any Owner in breach of their obligations under this Agreement, an Event of SFL Default (as defined below), or a failure by SFL, Holdings or any Owner to satisfy any term or condition of the Credit Agreement relating to SFL, Holdings and/or such Owner or to matters within SFL’s, Holdings’s and/or any Owner’s control, unless such breach or failure is due to an act or omission of HLL.

ARTICLE III

HLL CALL OPTION

3.1 Call Option Triggering Events. HLL shall have an option (a “Call Option”) to take, or to identify a designee to take, an assignment of any MOA upon the occurrence of any of the following events (each a “Call Option Triggering Event”) with respect to such MOA:

(i) the Vessel covered by such MOA is not delivered by the Seller under the subject MOA on or before the Commitment Termination Date (as defined in the Credit Agreement);

(ii) the Lenders fail to make available, or notify the Owners, SFL, Holdings or HLL that they will not make available (whether due to non-fulfillment of a condition precedent in the Credit Agreement or otherwise), the full amount of the Advance with respect to the Vessel covered by the MOA for any reason;

(iii) any condition precedent set forth in Article V hereto with respect to the Vessel covered by such MOA is not fulfilled, satisfied or waived when required to be fulfilled or satisfied, or HLL has any reason to believe that any such condition precedent is unlikely to be fulfilled, satisfied or waived by the applicable party when required and so notifies the other parties hereto;

(iv) any event shall occur that would cause the Adjusted Average Purchase Price for any Vessel to exceed $56,000,000 and HLL is not able to reduce such Adjusted Average Purchase Price by making a Leasehold Improvement pursuant to Section 2.6 hererof for any reason;

(v) any other event occurs that gives the Seller under the MOA the right to draw on the letter of credit furnished as a deposit under the MOA or otherwise to terminate the MOA; or

(vi) an Event of SFL Default shall occur and be continuing (in which case, the Call Option shall arise with respect to all the MOAs).

3.2 Call Option Price. If HLL exercises the Call Option with respect to any MOA, HLL or its designee shall (i) unless the Call Option Triggering Event is an Event of SFL Default, pay to Holdings an amount equal to all out-of-pocket costs and expenses

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incurred by Holdings in connection with the subject MOA and/or the financing of the Vessel covered thereby which have not been previously paid or reimbursed by HLL, and (ii) cause the return of the deposit provided by Holdings (whether in the form of cash or a letter of credit and including any interest earned on such cash deposit) as a condition to Holdings making such assignment.

3.3 Exercise of Call Option. If HLL desires to exercise the Call Option hereunder with respect to any MOA, it shall give written notice of exercise to SFL and Holdings identifying (i) the MOA to be assigned, (ii) the party to take the assignment of such MOA, (iii) the Call Option Triggering Event, and (iv) the anticipated delivery date of the Vessel under the MOA. Concurrent with the payment of the Call Option Price, if any, and return of the deposit provided by Holdings, or immediately upon receipt of such notice from HLL if the anticipated delivery date is less than fifteen (15) days from the date of such Call Option notice, Holdings shall assign the applicable MOA to the assignee identified by HLL in the Call Option notice.

3.4 Right of SFL to Maintain Transaction. The Call Options contained in this Article III shall not be used by HLL to exclude SFL from the transaction in situations where SFL desires to maintain its position in the transaction and it is possible to do so without causing a default under an MOA or the incurrence by HLL of additional expense. Therefore, provided that no Event of SFL Default has occurred and is continuing, if HLL exercises its Call Option under Sections 3.1(i) through (iv) above, SFL shall have three (3) days to notify HLL in writing that SFL desires to maintain its position in the transaction. If SFL gives such a notice, the HLL Call Option shall be suspended, and SFL shall then have fifteen (15) days to address the situation giving rise to the Call Option Triggering Event. During that time, HLL shall work with SFL in good faith in order to find a solution that will maintain SFL’s position in the transaction; provided that neither party shall be obligated to accept a solution that would involve a material change to any financial aspect of the transaction. If at the end of the 15-day period, the parties have not secured a solution, or sooner if HLL determines in good faith that it must exercise its Call Option to avoid an imminent default under any MOA, the HLL Call Option shall be immediately reinstated.

ARTICLE IV

TRANSACTION COSTS

4.1 Transaction Costs. HLL shall pay or reimburse SFL, Holdings and the Owners for the payment of (i) all reasonable out-of-pocket costs and expenses (including the reasonable attorney’s fees of Seward & Kissel LLP and Wiersholm, Mellbye & Bech, advokatfirma AS as their counsel) incurred by them in connection with the negotiation, preparation and entering into of the Transaction Documents, (ii) all letter of credit fees in connection with the letters of credit to be furnished by the Owners as a deposit under the MOAs, and (iii) all costs, expenses (including reasonable attorneys’ fees) and fees of the Agent or Lenders payable by the Owners under or in connection with the Credit Agreement and related agreements and documents (other than the Agency Fees, which shall be paid by the Owners and other than such fees, costs or expenses as shall have

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previously been paid by HLL or reimbursed by HLL) (collectively, the “Transaction Costs”); provided that HLL shall not be obligated to pay or reimburse SFL, Holdings and the Owners for the payment of any of their Transaction Costs or any of their other costs or expenses following the occurrence and continuance of any Event of SFL Default.

ARTICLE V

CONDITIONS PRECEDENT TO THE PURCHASE

AND CHARTER OF THE VESSELS

5.1 Conditions Precedent to Obligations of SFL, Holdings and the Owners. The obligations of SFL, Holdings and the Owners hereunder with respect to the purchase of each Vessel by Holdings, the transfer of such Vessel to the intended Owner thereof, and delivery of the Vessel by such Owner to HLL under the Charter, are subject to the satisfaction, fulfillment or waiver by SFL in its sole discretion of the following conditions precedent on or before the relevant Vessel Delivery Date (as defined in the Charters):

(a) Compliance with Documents. HLL shall be in material compliance with all the material terms of the Transaction Documents.

(b) Insurance. SFL, Holdings and the relevant Owner shall have received satisfactory evidence of the existence of all insurance covering the subject Vessel required by the relevant Charter, including the broker’s undertaking, and the payment of premiums thereon consistent with the required payment provisions of the underlying insurance policies and meeting the requirements of the Credit Agreement.

(c) Documentation of Vessels. SFL, Holdings and the Owners shall have received evidence reasonably satisfactory to SFL that upon delivery of the Vessel by the Seller thereof to Holdings, the Vessel will be documented under the laws of Liberia or Panama in the name of the relevant Owner, free and clear of all recorded liens, claims, or encumbrances other than for a first preferred mortgage in favor of the Security Trustee under the Credit Agreement and any Owner Liens (as defined in the Charters).

(d) No Change in Applicable Laws. Since the date of this Agreement, no change shall have occurred in applicable laws or in the interpretations thereof by any regulatory authorities having proper jurisdiction that would make it illegal for Holdings or the intended Owner to acquire the Vessel, or for such Owner to charter the Vessel to HLL, in accordance with the provisions of the Transaction Documents.

(e) No Event of Default Under Credit Agreement. No Event of Default shall exist under the Credit Agreement (that has not been waived by the Lenders), and no condition precedent to advancing the Tranche shall remain unfulfilled (that has not been waived by the Lenders), due to any act or omission of HLL, or any breach by HLL of any representation or warranty, covenant, term or condition made or to be performed by HLL hereunder or under any other Transaction Document, unless caused by an Event of SFL Default.

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(f) Adjusted Average Purchase Price. SFL, Holdings and the Owners shall have received evidence satisfactory to SFL that the Adjusted Average Purchase Price of the relevant Vessel (after making any adjustment contemplated by Section 1.4(c) hereof) does not exceed $56,000,000.

(g) Assignment of Charters and Insurances. As required by the Credit Agreement, HLL shall have executed a consent and agreement to the assignment of the relevant Charter and shall have executed an insurance assignment.

(h) Assignment of Guarantee. As required by the Credit Agreement, the Guarantor shall have executed a consent and agreement to the assignment of charter guarantee.

(i) Satisfaction or Waiver of HLL Condition Precedent. The condition precedent to HLL’s obligation to accept such Vessel set forth in Section 5.2(e) below shall have been satisfied or waived by HLL.

(j) Payment for Leasehold Improvements. HLL shall have paid the Owner for payment to the relevant Seller all sums due from it in respect of Leasehold Improvements as provided by Section 2.6(h) hereof.

5.2 Conditions Precedent to Obligations of HLL. The obligations of HLL to accept delivery of each Vessel under the Charter for such Vessel are subject to the satisfaction, fulfillment or waiver by HLL in its sole discretion of the following conditions precedent as of the relevant Vessel Delivery Date:

(a) Compliance with Documents. All of the Transaction Documents shall have been duly executed and delivered by the applicable parties thereto, and SFL, Holdings and the Owners shall be in material compliance with all the material terms of the Transaction Documents.

(b) No Event of Default Under Credit Agreement. No Event of Default shall exist under the Credit Agreement (that has not been waived by the Lenders), and no condition precedent to advancing the Tranche shall remain unfulfilled (that has not been waived by the Lenders), due to any act or omission of any SFL Party, or any breach by any SFL Party of any representation or warranty, covenant, term or condition made or to be performed by such SFL Party hereunder or under any other Transaction Document, unless caused by an Event of HLL Default.

(c) Lease Classification. HLL shall have received advice from Ernst & Young LLP, in form and substance satisfactory to HLL, to the effect that the transactions contemplated by the Transaction Documents qualify as operating leases for HLL under United States generally accepted accounting principles for financial reporting purposes.

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(d) Documentation of the Vessel. The intended Owner of the Vessel shall be entitled to document the Vessel under the laws of the United States of America with a registry endorsement.

(e) Legal Opinion. HLL shall have received a legal opinion from Seward & Kissel LLP, counsel to SFL, Holdings and the Owners, in form and substance reasonably satisfactory to HLL.

5.3 Delivery of Documents. With respect to satisfaction of the conditions precedent set forth in Section 5.1 hereof, delivery of documents to SFL shall be deemed to constitute delivery of the same documents to Holdings and the Owners.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties of HLL. HLL hereby represents and warrants to SFL, Holdings and the Owners that the following are true and correct as of the date hereof and will be true and correct on each Vessel Delivery Date:

(a) Legal Existence; Corporate or Other Legal Power. It is duly organized, validly existing and in good standing under the laws of the State of Delaware and has duly qualified to do business in each jurisdiction where the failure to be so qualified would have a material adverse effect on its business, financial condition, operations or properties and/or its ability to perform its obligations under the Transaction Documents to which it is a party. It has the requisite power and authority to conduct its business as such business is presently being conducted, to own or hold under charter or lease its properties, and to execute, deliver and perform its obligations under this Agreement and under each of the other Transaction Documents to which it is or will be a party.

(b) Authority; Binding Obligations. Each of the Transaction Documents to which it is or will be a party has been, or upon execution will be, duly authorized, executed and delivered by it, and constitutes, or upon execution and delivery will constitute, its legal, valid and binding obligations, enforceable against it in accordance with the terms thereof, except to the extent that enforceability thereof may be limited by applicable bankruptcy and other similar laws affecting the rights of creditors generally and by equitable principles. The execution, delivery and performance by it of this Agreement and the other Transaction Documents to which it is or will become a party (i) have been duly authorized by all necessary action on the part of HLL, (ii) do not and will not violate any provision of applicable laws or any provision of its Certificate of Formation or operating agreement, or (iii) result in the breach or violation of, or constitute a default or require any consent (other than consents that have heretofore been obtained) under, or result in the creation of any lien, charge or encumbrance upon any property or asset of it pursuant to, any material indenture, loan or credit agreement, mortgage, judgment, decree, franchise, permit, order, law, statute, rule or governmental regulation or other agreement or instrument to which it is a party or by which it or any of

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its properties may be bound or affected. It is not in default under or in breach or violation of (and no event or condition exists which would, with the giving of notice or lapse of time, or both, constitute such a default under or breach or violation of): (i) any provision of this Agreement or any other Transaction Document, or (ii) any indenture, lease, deed of trust, mortgage, bond or other evidence of indebtedness or other agreement or instrument by which it or its property is bound or affected or any law, judgment, franchise, statute, permit, decree, order, rule or regulation presently applicable to it or which would materially impair its ability to perform under the Transaction Documents to which it is a party, or to operate the Vessels, where the continuation of such default, breach or violation could reasonably be expected to have a Material Adverse Effect on HLL.

(c) Financial Condition. The audited financial statements of HLL as of December 25, 2005 made available to SFL fairly present the financial condition of HLL as of such date and the results of its operations for the period ending on such date. Since December 25, 2005.

(d) Litigation; Other Proceedings. There are no actions, suits, proceedings, arbitrations or investigations pending or, to the knowledge of HLL, threatened against or affecting HLL or any of its properties, at law, in equity or in admiralty, before or by any court, administrative or governmental body, environmental council or arbitrator which relate to any action taken or to be taken by HLL under this Agreement or the other Transaction Documents (or which otherwise relate to any Transaction Document), which could reasonably be expected to result in a Material Adverse Effect on HLL, and, to the knowledge of HLL, it is not in default with respect to any order of any court, governmental body or arbitrator applicable to it, which default could reasonably be expected to have a Material Adverse Effect on HLL. For the purposes of this Section, the term “governmental body” includes any federal, state, municipal or other governmental or intergovernmental department, commission, board, bureau, agency or instrumentality, or governmental or industry regulatory authority (including class), domestic or foreign, and the term “order” includes any judgment, order, writ, injunction, award, determination, direction, decree or demand.

(e) Approvals. No authorizations, consents, approvals, licenses, filings or registrations by or with, or the taking of any other action in respect of, any federal, state or other governmental authority, agency or administrative body are required to be obtained by HLL for or in connection with its execution or delivery of this Agreement or any of the other Transaction Documents, or for the performance thereof by HLL, or the validity and enforceability of any of such agreements and instruments in accordance with their respective terms, except such as have been duly obtained, sent, registered, filed or taken, as the case may be.

(f) Investment Company Act. It is not, and is not directly or indirectly controlled by or acting on behalf of any Person that is, an “investment company” within the meaning of the Investment Company Act of 1940.

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(g) Authorizations. All notices, permits, licenses, disclosures or similar authorizations, if any, required to be obtained or filed pursuant to Environmental Law (as defined in the Charters) in connection with the operation and management of the Vessels have been obtained or filed and are valid as of the relevant Vessel Delivery Date except where the failure to obtain such authorization will not have a Material Adverse Effect on HLL, have a Material Adverse Effect on the Vessels, or expose an Owner to any material liability.

(h) Documentation Citizen. HLL is qualified on the date hereof to own and document vessels under the U.S. flag pursuant to 46 U.S.C. § 12102(a), as amended, with a registry endorsement.

6.2 Representations and Warranties of SFL, Holdings and the Owners. SFL, Holdings and the Owners (each an “SFL Party” and, collectively, the “SFL Parties”) hereby represent and warrant to HLL, with respect to itself and each of the other SFL Parties, that the following are true and correct as of the date hereof and will be true and correct on each Vessel Delivery Date:

(a) Legal Existence; Corporate or Other Legal Power. It is duly organized, validly existing and in good standing under the laws of its country or state of incorporation or formation and has duly qualified to do business in each jurisdiction where the failure to be so qualified would have a material adverse effect on its business, financial condition, operations or properties and/or its ability to perform its obligations under the Transaction Documents to which it is a party. It has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and under each of the other Transaction Documents to which it is or will be a party.

(b) Authority; Binding Obligations. Each of the Transaction Documents to which it is or will be a party has been, or upon execution will be, duly authorized, executed and delivered by it, and constitutes, or upon execution and delivery will constitute, its legal, valid and binding obligations, enforceable against it in accordance with the terms thereof, except to the extent that enforceability thereof may be limited by applicable bankruptcy and other similar laws affecting the rights of creditors generally and by equitable principles. The execution, delivery and performance by it of this Agreement and the other Transaction Documents to which it is or will become a party do not and will not violate any provision of applicable laws or any provision of its certificate of formation, certificate or incorporation, operating agreement or by-laws, as the case may be, or result in the breach or violation of, or constitute a default or require any consent (other than consents that have heretofore been obtained) under, or result in the creation of any lien, charge or encumbrance upon any property or asset of it pursuant to, any indenture, loan or credit agreement, mortgage or other agreement or instrument (other than any Transaction Document) to which it is a party or by which it or any of its properties may be bound or affected. It is not in default under or in breach or violation of (and no event or condition exists which would, with the giving of notice or lapse of time, or both, constitute such a default under or breach or violation of): (i) any provision of this Agreement or any other Transaction Document, or (ii) any indenture, lease, deed of trust,

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mortgage, bond or other evidence of indebtedness or other agreement or instrument by which it or its property is bound or affected or any law, decree, order, rule or regulation where the continuation of such default, breach or violation could reasonably be expected to have a Material Adverse Effect on such SFL Party.

(c) Financial Condition. The unaudited financial statements of SFL as of December 31, 2005 heretofore made available to the Lenders and HLL fairly present the financial condition of SFL as of such date and the results of its operations for the period ending on such date, subject to audit adjustments.

(d) Litigation; Other Proceedings. There are no actions, suits, proceedings or investigations pending or, to the knowledge of SFL, Holdings or the Owners, threatened against or affecting SFL, Holdings or any Owner or any of their properties, at law, in equity or in admiralty, before or by any court or administrative or governmental body which relate to any action taken or to be taken by SFL, Holdings or any Owner under this Agreement or the other Transaction Documents (or which otherwise relate to any Transaction Document), which, in the aggregate, could reasonably be expected to result in a Material Adverse Effect on SFL, Holdings or any Owner, and, to the knowledge of SFL, Holdings and the Owners, none of them is in default with respect to any order of any court, governmental body or arbitrator applicable to any of them, which default could reasonably be expected to have a Material Adverse Effect on any of them. For the purposes of this Section, the term “governmental body” includes any federal, state, municipal or other governmental or intergovernmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, and the term “order” includes any judgment, order, writ, injunction, award, determination, direction, decree or demand.

(e) Approvals. No authorizations, consents, approvals, licenses, filings or registrations by or with any governmental authority or administrative body are required to be obtained by SFL, Holdings or any Owner for or in connection with its execution or delivery of this Agreement or any of the other Transaction Documents, or for the performance thereof by SFL, Holdings or any Owner, or the validity and enforceability of any of such agreements and instruments in accordance with their respective terms, except such as have been duly obtained, sent, registered, filed or taken, as the case may be.

(f) Investment Company Act. It is not, and is not directly or indirectly controlled by or acting on behalf of any Person that is, an “investment company” within the meaning of the Investment Company Act of 1940.

(g) U.S. Citizenship. Each of the Owners is qualified on the date hereof to own and document its respective Vessel under the U.S. flag pursuant to 46 U.S.C. § 12102(a), as amended, with a registry endorsement.

6.3 Survival of Representations and Warranties. The representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement, any examination by or on behalf of the parties hereto, and the consummation of the transactions contemplated herein.

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ARTICLE VII

DEFAULT AND REMEDIES

7.1 Events of HLL Default. (a) Each of the following events shall constitute an “Event of HLL Default” hereunder:

(i) HLL or the Guarantor shall be in material default under the terms of any Transaction Document with respect to any Vessel that has not been delivered under its MOA, after the giving of notice and the passage of any grace or cure period provided for therein with respect to such default; or

(ii) HLL or the Guarantor shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against HLL or the Guarantor, as the case may be, seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 45 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or HLL or the Guarantor, as the case may be, shall take any corporate action to authorize any of the actions set forth above in this section. This Section 7.2(a)(ii) shall not be an Event of HLL Default if it is caused by an Event of SFL Default; or

(iii) the Guarantee shall cease to remain in full force and effect, except as a result of any act or omission of the Agent, the Security Trustees or the Lenders, and is not promptly replaced by the Guarantor.

(b) Upon the occurrence and during the continuance of any Event of HLL Default, the SFL Parties shall be entitled to exercise all rights and remedies then available to them at law, in admiralty and in equity against HLL.

(c) If an Event of HLL Default shall occur and be continuing, Holdings may, in addition to its remedies under Section 7.1(b) above, deliver to the Seller the Assignment and Assumption Agreement, dated the date hereof, between Holdings and HLL related to the Vessel that is the subject of the Event of HLL Default.

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7.2 Events of SFL Default. (a) Each of the following events shall constitute an “Event of SFL Default” hereunder (unless, in each instance, such event was due to an act or omission of HLL or an Event of HLL Default hereunder):

(i) SFL, Holdings or any Owner shall be in material default under the terms of any Transaction Document after the giving of notice and the passage of any grace or cure period provided for therein with respect to such default; or

(ii) SFL, Holdings or any Owner shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any SFL, Holdings or any Owner, as the case may be, seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 45 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or SFL, Holdings or any Owner, as the case may be, shall take any corporate action to authorize any of the actions set forth above in this section. This Section 7.2(a)(vii) shall not be an Event of SFL Default if it is caused by an Event of HLL Default.

(b) Upon the occurrence of any Event of SFL Default, HLL shall be entitled to exercise, in addition to its right to exercise its Call Option pursuant to Article III hereof, all rights and remedies then available to it at law, in admiralty and in equity against SFL, Holdings and the Owners.

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ARTICLE VIII

MISCELLANEOUS

8.1 Sale of Vessels or Holdings. (a) SFL shall have the right to sell 100 percent of the membership interests of Holdings, and Holdings shall have the right to sell 100 percent of the membership interests of any Owner or to cause any Owner to sell its Vessel, at any time following delivery of the last of the Vessels to be delivered under the MOAs, subject to the following conditions:

(i) if the sale were consummated, there would be no more than two beneficial owners of the Vessels;

(ii) the buyer shall not be a competitor of HLL, and shall have a minimum net worth (determined in accordance with U.S. generally accepted accounting principles) of at least $150,000,000 (if the buyer is not a direct party to the Charter covering the Vessel, such Buyer shall guarantee performance of such Charter and form and substance reasonably acceptable to HLL);

(iii) the buyer shall have accepted an assignment of all of the rights and obligations of SFL, Holdings and each Owner under the Transaction Documents to which SFL, Holdings and each Owner, respectively, is a party as they relate to the subject Vessel(s) pursuant to an instrument of assignment that is reasonably satisfactory to HLL;

(iv) such assignment shall not result in an Event of Default under the Credit Agreement; and

(v) HLL shall have failed to exercise its rights to purchase the Vessel set forth in Section 8.1(b) below.

(b) If either SFL or Holdings shall desire to exercise its rights under Section 8.1(a) above, it shall so notify HLL in writing stating that it desires to sell 100 percent of the membership interests of Holdings or one or more of the Vessels or one or more of the Owners pursuant to Section 8.1(a) of this Agreement, and further notifying HLL that it has a right of first offer with respect to such sale pursuant to this Section 8.1(b). HLL shall then have twelve (12) days following receipt of such notice to submit to SFL a written offer to purchase 100 percent of the membership interests of Holdings, or the Owner(s) or Vessel(s) intended to be sold, describing in reasonable detail the terms of such sale, including the purchase price and payment terms. SFL shall then have thirty (30) days to accept such offer. If SFL does not accept such offer, it may not thereafter sell the shares of Holdings, the Owner(s) or the Vessel(s) at a lower price without reoffering the same to HLL at such lower price.

8.2 Duty to Maintain U.S. Citizenship. Each of the Owners agrees that it shall continue to be at all times qualified to own and document its respective Vessel under the U.S. flag pursuant to 46 U.S.C. § 12102(a), as amended, with a registry endorsement.

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8.3 Maritime Security Program Subsidy. During the term of any Charter, neither SFL, Holdings nor any Owner shall apply for subsidy under the U.S. Maritime Security Program (“MSP”) with respect to any Vessel. It is understood and agreed that HLL may apply for subsidy under the MSP program with respect to any Vessel and that any MSP subsidy with respect to any Vessel shall be paid to and retained by HLL.

8.4 Participation in Voluntary Intermodal Sealift Agreement (VISA) Program. HLL shall have the right to enroll the Vessels in the U.S. Department of Defense Voluntary Intermodal Sealift Agreement (VISA) program, and the SFL Parties shall cooperate with such enrollment; provided that all costs associated therewith shall be for HLL’s account.

8.5 No Liens. SFL, Holdings and the Owners agree that they shall not, directly or indirectly, create, incur, assume or suffer to exist and, at their own cost and expense, shall promptly take such action as may be necessary duly to discharge, any Owner’s Liens (as defined in the Charters) on or in respect of any Vessel; provided, however, that SFL, Holdings and the Owners may contest any such Owner’s Lien in good faith by appropriate proceedings diligently conducted where such proceedings do not involve a material risk of the sale, forfeiture or loss of the subject Vessel and would not interfere with the use and possession of the subject Vessel by HLL, or, if such proceedings could involve such risk or interference, where the Owner’s Lien has been bonded to the satisfaction of HLL.

8.6 Governing Law and Submission to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

8.7 Dispute Resolution. Each of the parties hereto hereby irrevocably agrees that any dispute shall be settled by arbitration in New York County before a panel of one mutually agreed upon arbitrator or, failing agreement, three persons consisting of one arbitrator to be appointed by the SFL Parties, one arbitrator to be appointed by HLL, and one arbitrator by the two so appointed. The decision of any two of the three on any point or points shall be final and binding, and may include costs, including reasonable attorney fees. Judgment may be entered upon any award made pursuant thereto in any court of competent jurisdiction. The arbitration proceedings shall be conducted in accordance with the Rules of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. In cases where neither the claim nor any counterclaim exceeds the sum of $250,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. Any claim by any party shall be waived unless arbitration is commenced by serving notice of demand within one (1) year of the occurrence of the event giving rise to the dispute.

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8.8 No Consequential Damages. In no event shall any party hereto be liable to any other party hereto for consequential damages or any damages other than actual direct damages.

8.9 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when (i) delivered by hand, (ii) transmitted by telecopier (assuming clear transmission), or (iii) delivered, if sent by Express Mail, Federal Express or other express delivery service, or registered or certified mail, return receipt requested, to the addressee at the following addresses or telecopier numbers (or to such other addresses or telecopier number as a party may specify by notice given to the other party pursuant to this provision):

If to SFL:

Ship Finance International Ltd.

PO Box HM 1393

Par-la-Ville Place

14 Par-la-Ville Road

Hamilton HM 08 Bermuda

Attn.: Vice President, Finance

Fax No.: +1 441 295 3494

with a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President, Finance

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

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If to Holdings:

SFL Holdings LLC

PO Box HM 1393

Par-la-Ville Place

14 Par-la-Ville Road

Hamilton HM 08 Bermuda

Attn.: Vice President, Finance

Fax No.: +1 441 295 3494

with a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

If to any Owner:

To the address of such Owner indicated on Appendix 1 hereto.

With a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

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If to HLL:

Horizon Lines, LLC

4064 Colony Road

Suite 200

Charlotte, NC 28211

Attn.: John V. Keenan

          Sr. V.P. of Operations & CTO

Fax No.: 704-973-7034

With a copy to:

Blank Rome LLP

600 New Hampshire Avenue, N.W.

Suite 1200

Washington, D.C. 20037

Attn.: T. Michael Dyer, Esquire

Fax No.: (202) 772-5858

8.10 Waiver. No delay by either party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, or otherwise prejudice the exercise by such party of that right, power or remedy.

8.11 Amendments. Except as otherwise provided herein, this Agreement may not be amended, modified or revised, in whole or in part, except by written instrument signed by all parties hereto.

8.12 Assignment. Except as expressly provided herein, neither party hereto may assign any of the rights or obligations created by this Agreement except with the express written consent of the other parties hereto.

8.13 Severability. Each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by applicable law. Should any term or provision of this Agreement be held invalid, illegal or unenforceable, the remainder of this Agreement, including the application of such term to the extent not invalid, illegal or unenforceable, shall not be affected thereby, and this Agreement shall be interpreted as if such term or provision, to the extent invalid, illegal or unenforceable, did not exist.

8.14 Descriptive Headings. The descriptive headings of any paragraphs of this Agreement are intended for convenience and do not constitute part of this Agreement.

8.15 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

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8.16 No Third Party Beneficiary. Nothing in this Agreement shall create any right in any party that is not a party hereto.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties have caused this Agreement to Acquire and Charter to be executed by their duly authorized representatives as of the date first above written.

HORIZON LINES, LLC
By:	/s/ John V. Keenan
	John V. Keenan
	Sr. Vice President of Operations & CTO
SHIP FINANCE INTERNATIONAL LIMITED
By:	/s/ Inger M. Klemp
	Inger M. Klemp
	Vice President - Finance
SFL HOLDINGS, LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL EAGLE LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member

S-1

HL FALCON LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HAWK LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HUNTER LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL TIGER LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member

S-2

APPENDIX 1

THE OWNERS

Name and Address of Owner	Vessel Name	Hull No.
HL Tiger LLC	Horizon Tiger	0387
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Hunter LLC	Horizon Hunter	0388
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Hawk LLC	Horizon Hawk	0389
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Falcon LLC	Horizon Falcon	0409
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Eagle LLC	Horizon Eagle	0427
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134

A-1

APPENDIX 2

PRICING ASSUMPTIONS

A-2

EX-10.2

Exhibit 10.2

EXECUTION COPY

GUARANTEE

This GUARANTEE (this “Guarantee”) dated as of April 7, 2006, made by Horizon Lines, Inc., a Delaware corporation, in favor of each of HL Tiger LLC, HL Hunter LLC, HL Hawk LLC, HL Falcon LLC and HL Eagle LLC (collectively, the “Owners” and each individually an “Owner”).

WHEREAS, the Owners have agreed that, upon the purchase of the Vessels by SFL Holdings from the Sellers, the Owners shall purchase the Vessel from SFL Holdings and, simultaneously with such sale, let and demise the Vessel to the Charterer; and

WHEREAS, in order to induce the Owners to enter into the Transaction Documents (as defined in each Charter referred to below to which each Owner is a party) to which it is a party, the Guarantor has agreed to extend this Guarantee in favor of the Owners.

NOW, THEREFORE, in consideration of the Owners entering into the Transaction Documents to which it is a party, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor, intending to be legally bound, hereby covenants and agrees as follows:

SECTION 1. Definitions and Rules of Interpretation. All terms used in this Guarantee which are not otherwise defined in this Guarantee shall have the respective meanings given in the bareboat charter (the “Charter”) between Horizon Lines, LLC, as the Charterer and HL Eagle LLC, as Owner, dated as of the date hereof, which Charter is incorporated herein by reference as if fully set forth herein. The rules of interpretation set forth in the Charter apply mutatis mutandis to this Guarantee.

SECTION 2. Guarantee. The Guarantor, as primary obligor and not merely as surety, hereby irrevocably, absolutely and unconditionally guarantees to the Owners and their successors and permitted assigns: (a) the prompt and complete payment by the Charterer, as and when due and payable (whether by demand or otherwise), of all obligations and liabilities of the Charterer to the Owners now existing or hereafter incurred under or arising out of or in connection with the Transaction Documents to which the Charterer is a party, whether for Hire, fees, expenses or otherwise and all other obligations and liabilities of any kind of the Charterer in connection with the transactions contemplated by the Transaction Documents and any agreement, instrument or certificate relating thereto to the Owners (including any liabilities (for damages or otherwise) of the Charterer in respect of any breach by the Charterer of any of its representations, warranties and covenants in any Transaction Document to which it is party) and (b) the due, prompt and faithful performance of, and compliance with, all other obligations, covenants, terms, conditions and undertakings of the Charterer contained in the Transaction Documents to which it is a party and any agreement or instrument or certificate relating thereto (all such obligations, liabilities, covenants, terms and conditions and undertakings referred to in clauses (a) and (b) above being herein called the “Obligations”); and agrees to pay on demand any and all Expenses which may be paid or incurred by any Owner in enforcing, or obtaining advice of

counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights under this Guarantee or under the Obligations including any Expenses incurred in connection with any bankruptcy proceeding involving the Charterer or the Guarantor.

SECTION 3. The Guarantor’s Obligations Absolute and Unconditional.

(a) The Guarantor hereby guarantees that the Obligations will be paid and performed strictly in accordance with the terms of the Transaction Documents to which the Charterer is a party, regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any such terms or the rights of any Owner with respect thereto. This Guarantee is a guarantee of payment and performance and not of collection and the obligations and liabilities of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any of the Obligations, the Transaction Documents (other than due to fraud or misrepresentation of any Owner) or any agreement, instrument or certificate relating thereto, or any delay, failure or omission to enforce or agreement not to enforce, or the stay or enjoining by order of court, by operation of law or otherwise of the exercise of, any right with respect to the foregoing (including in each case, without limitation, as a result of the insolvency, bankruptcy or reorganization of the Charterer, any Owner or any other Person); (ii) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the obligations, or any other amendment or waiver of or consent to any departure from any Transaction Document or any agreement, instrument or certificate relating thereto; (iii) any claim, set-off, counterclaim, defense or other rights which the Chartere or Guarantor may have at any time and from time to time against any Owner or any other Person, whether in connection with the transactions contemplated by the Transaction Documents or any unrelated transaction; (iv) any insolvency, bankruptcy, reorganization, arrangement, composition, liquidation, dissolution or similar proceedings with respect to the Charterer or any other Person; or (v) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Charterer or any other guarantor or surety in respect of the Obligations or the Guarantor in respect of this Guarantee.

(b) This Guarantee (i) is a continuing guarantee and shall remain in full force and effect until the payment or performance in full of the Obligations due and owing the Owners and the payment of the other expenses to be paid by the Guarantor pursuant hereto; and (ii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment, or any part thereof, of any of the Obligations are rescinded or must otherwise be returned or reimbursed by any Owner upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Charterer or otherwise, all as though such payment had not been made.

(c) The obligations and liabilities of the Guarantor under this Guarantee shall not be conditioned or contingent upon the pursuit by any Owner of any right or remedy against the Charterer which may be or become liable in respect of all or any part of the Obligations or against any collateral security or guarantee therefor or right of set off with respect thereto.

(d) The Guarantor hereby consents that , without the necessity of any reservation of rights against the Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any of the Obligations made by any Owner may be rescinded by such Owner and any of the Obligations continued after such rescission.

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SECTION 4. Waivers. The Guarantor hereby unconditionally waives: (a) promptness and diligence; (b) notice of or proof of reliance by any Owner upon this Guarantee or acceptance of this Guarantee; (c) notice of the incurrence of any Obligation by the Charterer or the renewal, extension or accrual of any Obligation; (d) notice of any actions taken by any Owner or the Charterer under the Transaction Documents or any other agreement, instrument or certificate relating thereto; and (e) all other notices, demands and protests, and all other formalities of every kind in connection with enforcement of the Obligations or of the obligations of the Guarantor hereunder, the omission of or dalay in which, but for the provisions of this Section 4, might constitute grounds for relieving the Guarantor of its obligations hereunder.

SECTON 5. Waiver of Subrogation Rights by the Guarantor. The Guarantor hereby acknowledges and agrees that under no circumstances shall the Guarantor be entitled to be subrogated to any rights of any Owner in respect of the obligations performed by the Guarantor hereunder or otherwise, and the Guarantor hereby expressly and irrevocably waives each and every such right of subrogation and any claims, reimbursements, right or right of action relating thereto (howsoever arising). The Guarantor hereby further acknowledges and agrees that no payment or performance hereunder by the Guarantor shall give rise to any claim of the Guarantor against any Owner.

SECTION 6. Representations and Warranties of the Guarantor. The Guarantor represents and warrants, as of the date hereof, to the Owners as follows:

(a) the Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to carry on its businesses as presently conducted, to own its properties and to enter into and to perform its obligations under this Guarantee and has not failed to qualify to do business in any jurisdiction where failure so to qualify would materially and adversely affect its financial condition or its ability to perform its respective obligations under this Guarantee;

(b) the execution, delivery and performance by the Guarantor of this Guarantee have been duly authorized by all necessary corporate action, do not contravene any Applicable Law presently binding on the Guarantor, and do not and will not contravene the provisions of, or constitute a default under, its certificate of incorporation or by-laws or any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other material contract, agreement or instrument to which it is a party by which it or any of its properties is or may be bound or affected and which would have a material adverse effect on the ability of the Guarantor to perform its obligations under this Guarantee;

(c) the execution, delivery and performance by the Guarantor of this Guarantee do not require the consent, approval, authorization, or order of, or giving of notice to, or registration with, or taking of any other action in respect of, any Governmental Entity, other than such consents, approvals, authorizations, orders, registrations, notices or actions the failure

3

of which to obtain would not have a Material Adverse Effect on the Guarantor, or a material adverse effect upon its ability to perform any of its obligations under this Guarantee; provided, if any of the foregoing are not required hereby or by the other Transaction Documents or by Applicable Law to be obtain, given or taken on or before Closing Date, the same will be made or obtained in the ordinary course of business when required; and

(d) this Guarantee has been duly executed and delivered by the Guarantor and constitutes the legal, valid and binding obligation of the Guarantor, duly enforceable against the Guarantor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) the audited consolidated balance sheets of the Guarantor and its Consolidated Subsidiaries as of December 25, 2005, and the related audited statement of its earnings and cash flows for the period then ended, have been prepared in accordance with GAAP and fairly present the financial condition of the Guarantor and its consolidated subsidiaries taken as a whole as of such dates and the results of operations for the fiscal period then ended.

(f) the Guarantor owns indirectly all the issued and outstanding capital stock or membership interests of the Charterer;

SECTION 7. Financial Information. (a) Within 10 days of the filing thereof with the Securities and Exchange Commission (“SEC”) or, if the Guarantor is not required to file such financial statements with the SEC, within 120 days of the Guarantor’s fiscal year-end, a copy of the audited annual financial statements of the Guarantor shall be delivered to the Owners, provided that this covenant shall be deemed to have been fulfilled by the posting on the Guarantor’s website of such financial statements.

(b) Within 10 days of the filing thereof with the SEC or, if the Guarantor is not required to file such financial statements with the SEC, within 60 days of the Guarantor’s fiscal quarter then ended, a copy of the unaudited quarterly financial statements for such fiscal quarter shall be delivered to the Owners, provided that this covenant shall be deemed to have been fulfilled by the posting on the Guarantor’s website of such financial statements.

SECTION 8. Consolidation or Merger. The Guarantor shall not acquire a Person or consolidate or merge with or into any other Person or sell, convey, assign, transfer, charter or otherwise dispose of substantially all of its property to any Person unless:

(A) either (x) the Guarantor is the surviving Person; or (y) the Person formed by or surviving any such consolidation, charter or merger (if other than the Guarantor) or to which such sale, conveyance, assignment, transfer or other disposition has been made expressly assumes all the obligations of the Guarantor under the Guarantee and other Transaction Documents; and

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(b) the surviving Person who is the Guarantor remains in compliance with the terms and provisions of this Guarantee and the other Transaction Documents.

This Section 8 shall not apply to a merger or consolidation, or sale, conveyance, assignment, transfer, charter or other disposition of the Guarantor with an Affiliate solely for the purpose, and with the effect, of reincorporating the Guarantor in another jurisdiction of the United States.

SECTION 9. Notices. Every notice, request or demand or other communication under this Guarantee shall: be in writing (whether or not any such communication is specified to be in writing) and in the English language and delivered personally, by certified mail or by prepaid courier delivery services such as Federal Express, DHL or other similar services or facsimile (confirmed in the case of a facsimile, by prepaid airmail letter sent within 24 hours of dispatch); and be deemed to have been received, in the case of a facsimile, at the time of dispatch with a transmission confirmation appearing at the end of the communication (provided, however, that, in the case of a facsimile, if the date of dispatch is not a business day in the state of the addressee it shall be deemed to have been received at the opening of business on the next such business day) and, in the case of a letter, when delivered personally or by courier; provided, however, that if personal delivery or delivery by courier of a notice is tendered but refused, such notice, shall be effective upon such tender;

(a) be sent if:

(1) to any Owner to:

c/o Ship Finance International Limited

P.O. Box HM 1593

Par-la-Ville Place

14 Par-la-Ville Road

Hamilton HM08 Bermuda

Attention: Vice President Finance

Facsimile: (441) 295-3494

with a copy to:

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attention: Gary J. Wolfe

Facsimile: (212) 480-8421

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(2) to the Guarantor to:

Horizon Lines, Inc.

4064 Colony Road, Suite 200

Charlotte, NC 28211

Attention: Mark Urbania

Facsimile: (704) 973-7010

Telephone: (704) 973-7049

or to such other addressee or facsimile number as may be notified by one party to the other parties under this Guarantee.

SECTION 10. Miscellaneous.

(a) The Guarantor will make each payment hereunder in lawful money of the United States and in immediately available funds to the applicable Owner at its address specified in Section 12 of this Guarantee or to such other address as such Owner may designate for itself by like notice.

(b) No amendment of any provision of this Guarantee shall be effective unless it is in writing and signed by the Guarantor and each of the Owners, and no waiver of any provision of this Guarantee, and no consent to any departure by the Guarantor therefrom, shall be effective unless it is in writing and signed by each of the Owners as to itself, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(c) No failure on the part of the Owners to exercise, and no delay in exercising any right hereunder, shall operate as a waiver hereof. The rights and remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(d) Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(e) This Guarantee (i) shall be binding in accordance with and to the extent of its terms upon the Guarantor and its successors and assigns, (ii) shall inure, together with all rights and remedies hereunder, to the benefit of Owners and their respective successors and permitted assigns and (iii) may be assigned by the Owners to the Security Trustee under the Credit Agreement to secure its obligations to the Lenders under the Credit Agreement.

(f) GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

(i) THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL

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MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF. THIS GUARANTEE IS BEING DELIVERED IN THE STATE OF NEW YORK.

(ii) EACH PARTY HEREBY AGREES THAT ANY SUIT, ACTION OR PROCEEDING UNDER OR ARISING OUT OF OR RELATING TO THIS GUARANTEE OR ANY OTHER TRANSACTION DOCUMENT MAY BE INSTITUTED IN THE FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK OR THE COURTS OF THE STATE OF NEW YOU LOCATED IN NEW YORK COUNTY, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, INCLUDING THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, PROVIDED, THAT NOTHING CONTAINED IN THIS SECTION 13(f) SHALL AFFECT THE RIGHTS OF ANY PERSON TO BRING ANY SUCH ACTION, SUIT OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION. TO THE EXTENT THAT SUCH PERSON OR ANY OF ITS PROPERTY IS OR BECOMES ENTITLED AT ANY TIME TO ANY IMMUNITY ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE FROM ANY LEGAL ACTION SUIT OR PROCEEDING, FROM SET-OFF OR COUNTERCLAIM, FROM THE JURISDICTION OF ANY COMPETENT COURT, FROM SERVICE OF PROCESS, FROM ATTACHMENT PRIOR TO JUDGMENT, FROM ATTACHMENT IN AID OF EXECUTION, OR FROM EXECUTION PRIOR TO JUDGMENT, OR OTHER LEGAL PROCESS IN ANY JURISDICTION, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY FOR ITSELF AND ITS PROPERTY DOES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, AND AGREE NOT TO PLEAD OR CLAIM, ANY SUCH IMMUNITY WITH RESPECT TO ITS OBLIGATIONS, LIABILITIES OR ANY OTHER MATTER UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE OR ANY OTHER TRANSACTION DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF. SUCH AGREEMENT OR WAIVER SHALL BE IRREVOCABLE AND NOT SUBJECT TO WITHDRAWAL IN ANY AND ALL JURISDICTIONS INCLUDING UNDER THE FOREIGN SOVEREIGN IMMUNITIES ACT OF 1976 OF THE UNITED STATES. EACH PARTY HEREBY GENERALLY CONSENTS TO THE SERVICE OF PROCESS AT ITS ADDRESS SPECIFIED FOR NOTICE IN SECTION 12.

(iii) EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS GUARANTEE. EACH PARTY ACKNOWLEDGES THAT THE WAIVER OF JURY TRIAL BY IT IN THIS SECTION 13(f)(iii) IS A MATERIAL INDUCEMENT TO THE

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OTHER PERSONS TO ENTER INTO A BUSINESS RELATIONSHIP WITH IT AND THAT SUCH PARTIES HAVE RELIED ON THIS SECTION 13(f)(iii) IN ENTERING INTO THE TRANSACTION DOCUMENTS.

(iv) EACH PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT FINAL JUDGMENT AGAINST IT RENDERED BY SUCH COURTS IN ANY OF THE AFORESAID ACTIONS, SUITS OR PROCEEDINGS SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION, WITHIN OR WITHOUT THE UNITED STATES, BY SUIT ON THE JUDGMENT. A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND AMOUNT OF ITS OBLIGATIONS AND LIABILITIES.

(v) EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS SECTION 13(f)(v) WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY ACCEPTS AND AGREES TO THIS SECTION 13(f) FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. THIS SECTION 13(f) IS IRREVOCABLE AND UNCONDITIONAL AND SHALL APPLY TO ANY AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTEE.

(g) Section heading in this Guarantee are included in this Guarantee for the convenience of reference only and shall not constitute a part of the Guarantee for any other purpose.

(h) The Guarantor hereby agrees to execute and deliver all such instruments and to take all such action as the Owner or its permitted assigns, as applicable, may from time to time reasonably request in order to effectuate fully the purposes of this Guarantee.

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IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed by an officer thereunto duly authorized, as of the date first above written.

HORIZON LINES, INC.
By:	/s/ M. Mark Urbania
Name:	M. Mark Urbania
Title:	Sr. Vice President & CFO

Acknowledged, Accepted and Agreed to by:

HL TIGER LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HUNTER LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HAWK LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL FALCON LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL EAGLE LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member

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EX-10.3

Exhibit 10.3

REIMBURSEMENT AGREEMENT

THIS REIMBURSEMENT AGREEMENT (“Agreement”) is made and entered into this 7^th day of April 2006 by and among Horizon Lines, LLC, a Delaware limited liability company (“HLL”), Ship Finance International Limited, a Bermuda company (“SFL”), SFL Holdings LLC, a Delaware limited liability company (“SFL Holdings”), and the five companies listed in Appendix 1 hereto, each a Delaware limited liability company and direct wholly-owned subsidiary of SFL Holdings (each an “Owner” and collectively, the “Owners”).

RECITALS

WHEREAS, pursuant to an Agreement to Acquire and Charter, dated the date hereof (the “Agreement to Acquire and Charter”), among SFL, SFL Holdings, the Owners and HLL, SFL will, among other things, cause SFL Holdings to purchase five 2,824 TEU containerships (each a “Vessel” and collectively, the “Vessels”), and upon the purchase of each Vessel by SFL Holdings, SFL Holdings will immediately sell the Vessel to the intended Owner thereof for an amount equal to the Adjusted Average Purchase Price (as defined in the Agreement to Acquire and Charter) of the Vessel and the Owners will, in turn, demise charter the Vessels to HLL under the terms of five separate bareboat charter parties, dated the date hereof (each a “Charter” and, collectively, the “Charters”), each between one of the Owners and HLL (the foregoing transactions being, collectively, the “Transactions”);

WHEREAS, the Vessels will be built by Hyundai MIPO Dockyard Co., Ltd., a Korean company (the “Builder”), under five separate Shipbuilding Contracts, two of which are with wholly-owned subsidiaries of E.R. Schiffahrt GMBH & Cie. KG (“ER”; each such wholly-owned subsidiary, an “ER Subsidiary”), and three of which are with wholly-owned subsidiaries of Tsakos Shipping & Trading S.A. (“Tsakos”; each such wholly-owned subsidiary, a “Tsakos Subsidiary”; each ER Subsidiary and Tsakos Subsidiary, a “Seller” and such subsidiaries, collectively, the “Sellers”);

WHEREAS, SFL Holdings has entered into five separate Memoranda of Agreement, each dated the date hereof (each an “MOA” and, collectively, the “MOAs”), pursuant to which SFL Holdings has agreed to purchase, and the Seller party thereto has agreed to sell, the Vessel covered by such MOA;

WHEREAS, each MOA with an ER Subsidiary requires that SFL Holdings deliver a cash deposit to the relevant Seller (each a “Cash Deposit” and, collectively, the “Cash Deposits”), in an amount equal to $5,485,000 per Vessel under the relevant MOA, which Cash Deposit may be drawn upon by the Seller if SFL Holdings defaults under such MOA;

WHEREAS, each MOA with a Tsakos Subsidiary requires that SFL Holdings deliver as a deposit a letter of credit (each a “Tsakos L/C” and, collectively, the “Tsakos L/Cs”) in an amount equal to $8,512,500 per Vessel under the relevant MOA, which Tsakos L/C may be drawn upon by the Seller if SFL Holdings defaults under such MOA;

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WHEREAS, in order to finance a portion of the purchase price of each Vessel, the Owners have entered into a Credit Agreement, dated the date hereof (the “Credit Agreement’), with Fortis Capital Corp. and the other lenders named therein (each a “Lender” and, collectively, the “Lenders”), pursuant to which the Lenders have agree to advance to each Owner the lesser of (i) 75% of the Recalculated Adjusted Average Purchase Price (as defined in the Credit Agreement) of the Vessel to be purchased by such Owner, or (ii) $42,000,000;

WHEREAS, the Credit Agreement includes a Letter of Credit Facility of up to $38,000,000, a portion of which will be used to issue the Tsakos L/Cs that will be used to satisfy the deposit requirements of the MOA’s with the Tsakos Subsidiaries;

WHEREAS, the Owners have entered into certain forward-starting interest rate swap agreements (the “Swaps”) in order to fix the interest rate payable by the Owners with respect to amounts advanced under the Credit Agreement;

WHEREAS, SFL has entered into an Interest Guarantee, dated the date hereof (the “Interest Guarantee”), pursuant to which SFL has guaranteed the Owners’ liability under the Swaps with respect to the period prior to delivery of the Vessels that is unrelated to any Event of HLL Default under the Agreement to Acquire and Charter;

WHEREAS, SFL has entered into an L/C Guarantee, dated the date hereof (the “L/C Guarantee”), pursuant to which SFL has guaranteed the Owners’ liability under the Tsakos L/Cs with respect to the period prior to delivery of the Vessels that is unrelated to any Event of HLL Default under the Agreement to Acquire and Charter;

WHEREAS, concurrently with SFL Holdings’ delivery of all of the Cash Deposits and Tsakos L/Cs to the Sellers, HLL is causing UBS AG, Stamford Branch (“UBS”), to issue to Fortis Capital Corp., as Security Trustee for the Lenders and the Swap Providers (each as defined in the Credit Agreement), eight (8) letters of credit (each, a “Back-Up L/C” and collectively, the “Back-Up L/Cs”) issued pursuant to HLL’s senior credit facility, in the aggregate amount of $29,337,500; three of such letters of credit shall each be in the amount of $8,512,500 and shall each support HLL’s obligation hereunder to reimburse the relevant Owner in respect of such Owner’s liability under the Credit Agreement for amounts drawn under a Tsakos L/C issued under the Credit Agreement as a deposit under an MOA with a Tsakos Subsidiary; and five of such letters of credit shall each be in the amount of $760,000 and shall support HLL’s obligation hereunder to reimburse the relevant Owner in respect of such Owner’s liability under the Swaps in respect of a particular Vessel;

WHEREAS, HLL, SFL and the Security Trustee have entered into a certain Interest and L/C Liability Agreement dated as of the date hereof (the “Interest and L/C Liability Agreement”);

WHEREAS, as an integral part of the Transaction, including entering into the Charters, HLL has agreed to reimburse SFL, SFL Holdings and the Owners, with respect to each Vessel, for certain amounts and in certain circumstances, as more fully set forth herein;

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THEREFORE, in consideration of the premises, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Charters.

2. Reimbursement Obligations. In consideration of the agreement of SFL, SFL Holdings and the Owners to enter into the Transaction, HLL agrees as follows:

(a) Obligations Covered by Back-Up L/Cs. HLL shall reimburse SFL, SFL Holdings and the relevant Owner (each an “SFL Party” and, collectively, the “SFL Parties”), without duplication, for the following:

(i) any liabilities under the Credit Agreement in respect of amounts drawn under any Tsakos L/C (a “Tsakos L/C Draw”) as a result of a default under the MOA with respect to such Tsakos L/C or paid by SFL under the L/C Guarantee with respect thereto (collectively, “L/C Liability”), plus interest thereon to the date of reimbursement by HLL at the interest rate required under the Credit Agreement (“Tsakos L/C Draw Interest”); and

(ii) any liabilities of the Owners in respect of the Swaps during the Pre-Delivery Period (as defined in the Credit Agreement), or paid by SFL under the Interest Guarantee with respect thereto (collectively, a “Swap Breakage Liability”), in either case, following a default under the related MOA and the termination of the Swap related to such Vessel.

(b) Obligations Not Covered by Back-Up L/Cs. HLL shall reimburse the SFL Parties for the amount of any Cash Deposit forfeited to a Seller that is an ER Subsidiary as a result of a default under the MOA with such Seller, together with interest accrued on such amount that is in excess of amounts due and unpaid by HLL pursuant to Section 1.4(e) of the Agreement to Acquire and Charter (collectively, a “Cash Deposit Liability”).

(c) Limitations. Notwithstanding anything herein or in any Transaction Document (as defined in the Credit Agreement) to the contrary the reimbursement obligations of HLL hereunder shall be subject to the following limitations:

(i) HLL shall not be obligated to reimburse any SFL Party for any L/C Liability, , Tsakos L/C Draw Interest, Swap Breakage Liability, or Cash Deposit Liability in respect of or resulting from any MOA default that was due to or resulted from an Event of SFL Default under the Agreement to Acquire and Charter;

(ii) the total amount of HLL’s reimbursement obligations to the SFL Parties hereunder in respect of L/C Liability, Tsakos L/C Draw Interest and Swap Breakage Liability pursuant to Section 2(a) hereof shall not exceed $40,000,000 in the aggregate;

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(iii) HLL’s reimbursement obligation pursuant to Section 2(a)(i) hereof in connection with any L/C Liability shall be satisfied solely by a draw under the corresponding Back-Up L/C, and no SFL Party, or any assignee of any SFL Party, shall have any recourse to HLL for any amounts due with respect to any L/C Liability that cannot be paid with the proceeds of a draw under the relevant Back-Up L/C; provided, however, that each SFL Party and the Security Trustee, as assignee of any SFL Party, shall have recourse to HLL for any Tsakos L/C Draw Interest;

(iv) HLL’s reimbursement obligation pursuant to Section 2(a)(ii) hereof in connection with any Swap Breakage Liability shall be satisfied first and to the maximum extent possible by a draw under the corresponding Back-Up L/C; and

(v) HLL’s obligation to reimburse the SFL Parties pursuant to Section 2(b) hereof in respect of a Cash Deposit Liability and Section 2(a)(ii) hereof in respect of a Swap Breakage Liability to the extent exceeding the stated amount of the relevant Back-Up L/C, shall be unsecured obligations of HLL.

(d) In addition to the foregoing, HLL shall reimburse the SFL Parties for the amount of any L/C Liability or Swap Breakage Liability after the relevant MOA shall have been assigned by SFL Holdings to a third party either with HLL’s prior written consent or after the occurrence and during the continuance of an Event of HLL Default (as defined in the Agreement to Acquire and Charter), without regard to the provisions of the Interest and L/C Liability Agreement (as defined in the Credit Agreement).

3. Reimbursement Procedure. (a) If any SFL Party incurs any loss, cost or expense for which it is entitled to reimbursement under Sections 2(a)(i) or (ii) hereof, HLL shall pay any such reimbursement amount due pursuant to and in accordance with the Interest and L/C Liability Agreement.

(b) In the event that any SFL Party incurs any loss, cost or expense for which it is entitled to reimbursement hereunder pursuant to Section 2(b), it shall deliver to HLL a written request for reimbursement, including a reasonably detailed accounting of the amount for which reimbursement is sought with supporting documentation. HLL shall pay any such reimbursement amount due within three (3) Business Days after receipt of such request for reimbursement.

4. Return of Back-Up L/Cs. SFL shall cause the Security Trustee to return the Back-Up L/Cs to HLL as follows: (i) each Back-Up L/C relating to a Tsakos Vessel that has been delivered to and accepted by SFL Holdings under the relevant MOA shall be returned to HLL undrawn on the date of such delivery and acceptance promptly upon the Seller’s return to the Security Trustee or the Agent of the Tsakos L/C related to such MOA, (ii) following a Deemed Dispute (as defined in the Interest and L/C Liability Agreement) with respect to any Vessel, SFL shall cause the Security Trustee to either (a) return the related Back-Up L/C to UBS promptly after 50% of the amount thereof has been drawn by the Security Trustee in accordance with the Interest and L/C Liability Agreement, or (b) upon instruction from HLL to do so,

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transfer such Back-Up L/C to SFL, in either case, to secure HLL’s potential reimbursement obligation to SFL in the event that such Deemed Dispute is decided in favor of SFL under Section 6(c) hereof. SFL may hold such Replacement Back-Up L/C or transferred Back-Up L/C until the earlier of the date on which (x) the related Deemed Dispute has been settled by the parties pursuant to a written agreement, or (y) a final award in respect of such Deemed Dispute has been issued pursuant to an arbitration proceeding, as contemplated by Section 6(b) below. SFL shall be entitled to draw an amount under such Replacement Back-Up L/C to the extent it is entitled to payment pursuant to any such settlement or award and shall promptly thereafter return such Back-Up L/Cs to HLL.

5. Swap Collateral; Allocation of Settlement Amounts. (a) In the event that any Owner shall receive notice from any Swap Provider that the Exposure of the Exposed Parties to the Related Parties exceeds the Exposure Threshold stated in the Master Agreements (as defined in the Credit Agreement), such Owner shall promptly notify HLL in writing of its receipt of such notice (each such notice to HLL, a “Swap Exposure Notice”).

(b) Upon its receipt of a Swap Exposure Notice, HLL shall have the right, but not the obligation, to take any single action or any combination of the actions set forth in subparagraphs (i) and (ii) below such that, after giving effect thereto, the Exposure of the Exposed Parties to the Related Parties under the Master Agreements and the Related ISDAs does not exceed the Exposure Threshold:

(i) unilaterally increase the limitation set forth in Section 2(c)(ii) of this Agreement by sending written notice of such increase to SFL and the Agent under the Credit Agreement, provided that in no event shall such amount exceed $50,000,000 without the prior written consent of the Security Trustee and the Owners; and/or

(ii) deliver to the Security Trustee under the Credit Agreement, as additional collateral security for the pro rata benefit of the Swap Providers (as defined in the Credit Agreement), cash and/or a standby letter of credit in favor of the Security Trustee (all such cash and standby letters of credit, collectively, the “Swap Collateral”).

(c) All Swap Collateral delivered by HLL to the Security Trustee shall be subject to security documents in form and substance satisfactory to HLL. In no event shall any Swap Collateral be used as security for the SFL Parties’ Obligations (as defined in the Credit Agreement) under the Loan Documents (as defined in the Credit Agreement) other than such Obligations in respect of the aggregate Exposure in excess of the Exposure Threshold. In the event that the circumstances giving rise to any Swap Exposure Notice shall cease to exist, HLL may at any time and from time to time thereafter, upon written notice to SFL and the Agent, unilaterally decrease the limitation set forth in Section 2(c)(ii) of this Agreement, provided, that, in no event shall such amount be less than $40,000,000. Capitalized terms used in this Section, unless otherwise defined herein, shall have the meanings set forth in the Schedules to the Master Agreements (as defined in the Credit Agreement).

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(d) In the event that: (a) during the Pre-Delivery Period (as defined in the Credit Agreement), any Designated Transaction shall have been terminated in whole or in part in accordance with the terms of the related Master Agreement (as defined in the Credit Agreement); (b) such termination shall not have resulted from an Event of SFL Default; and (c) any SFL Party shall be entitled to receive a Settlement Amount under the related Master Agreement with respect to such termination, then such SFL Party shall cause such Settlement Amount to be paid to HLL instead.

6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

7. Jurisdiction; Dispute Resolution. (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement (other than any action or proceeding relating to a Deemed Dispute (as defined in the Interest and L/C Liability Agreement)), and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Subject to the foregoing and to paragraph (c) below, nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement. Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent they may legally and effectively do so, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or Federal court and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any immunity from jurisdiction of any court or from any legal process with respect to themselves or their property

(b) Notwithstanding anything in this Agreement or any Transaction Document to the contrary, each of the parties hereto hereby irrevocably agrees that any Deemed Dispute (as defined in the Interest and L/C Liability Agreement) shall be settled by arbitration in New York County before a panel of one mutually agreed upon arbitrator or, failing agreement, three persons consisting of one arbitrator to be appointed by SFL Parties, one arbitrator to be appointed by HLL, and one arbitrator by the two so appointed. The decision of any two of the three on any point or points shall be final and binding, and may include costs, including reasonable attorney fees. Judgment may be entered upon any award made pursuant thereto in any court of competent jurisdiction. The arbitration proceedings shall be conducted in accordance with the Rules of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. In cases where neither the claim nor any counterclaim exceeds the sum of $250,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. Any claim by any party shall be waived unless arbitration is commenced by serving notice of demand within one (1) year of the occurrence of the event giving rise to the Deemed Dispute.

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8. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when (i) delivered by hand, (ii) transmitted by telecopier (assuming clear transmission), or (iii) delivered, if sent by Express Mail, Federal Express or other express delivery service, or registered or certified mail, return receipt requested, to the addressee at the following addresses or telecopier numbers (or to such other addresses or telecopier number as a party may specify by notice given to the other party pursuant to this provision):

If to SFL:

Ship Finance International Ltd.

PO Box HM 1393

Par-la-Ville Place

14 Par-la-Ville Road

Hamilton HM 08 Bermuda

Attn.: Vice President, Finance

Fax No.: +1 441 295 69 35

with a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President, Finance

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

If to SFL Holdings:

SFL Holdings LLC

PO Box HM 1393

Par-la-Ville Place

14 Par-la-Ville Road

Hamilton HM 08 Bermuda

Attn.: Vice President, Finance

Fax No.: +1 441 295 69 35

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with a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

If to any Owner:

To the address of such Owner indicated on Appendix 1 hereto.

With a copy to:

Frontline Management AS

Bryggegata 3

P.O. Box 1327-VIKA

Oslo 0112 Norway

Attn.: Vice President

Fax No.: +4723114040

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: Gary J. Wolfe, Esquire

Fax No.: 212-480-8421

If to HLL:

Horizon Lines, LLC

4064 Colony Road

Suite 200

Charlotte, NC 28211

Attn.: M. Mark Urbania

          Sr. Vice President & CFO

Fax No.: 704-973-7034

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With a copy to:

Blank Rome LLP

600 New Hampshire Avenue, N.W.

Suite 1200

Washington, D.C. 20037

Attn.: T. Michael Dyer, Esquire

Fax No.: (202) 772-5858

9. Amendments. This Agreement may not be amended, modified or revised, in whole or in part, except by written instrument signed by all parties hereto.

10. Assignment. Neither party hereto may assign any of the rights or obligations created by this Agreement except with the express written consent of the other parties hereto.

11. Severability. Each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by applicable law. Should any term or provision of this Agreement be held invalid, illegal or unenforceable, the remainder of this Agreement, including the application of such term to the extent not invalid, illegal or unenforceable, shall not be affected thereby, and this Agreement shall be interpreted as if such term or provision, to the extent invalid, illegal or unenforceable, did not exist.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

13. Termination. HLL’s obligation hereunder to make reimbursement payments with respect to any L/C, Cash Deposit or breakage costs relating to a Vessel shall terminate immediately upon delivery of such Vessel to SFL Holdings. All of HLL’s obligations hereunder shall terminate immediately upon delivery of the last Vessel to SFL Holdings.

14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties have caused this Reimbursement Agreement to be executed by their duly authorized representatives as of the date first above written.

HORIZON LINES, LLC
By:	/s/ M. Mark Urbania
	M. Mark Urbania
	Sr. Vice President & CFO
SHIP FINANCE INTERNATIONAL LIMITED
By:	/s/ Inger M. Klemp
	Inger M. Klemp
	Attorney-In-Fact/Authorized Person
SFL HOLDINGS, LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL EAGLE LLC
By:	/s/ Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member

S-1

HL FALCON LLC
By:	/s/  Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HAWK LLC
By:	/s/  Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL HUNTER LLC
By:	/s/  Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member
HL TIGER LLC
By:	/s/  Kenneth Becker
Name:	Kenneth Becker
Title:	Management Committee Member

S-2

APPENDIX 1

NAMES AND ADDRESSES OF THE OWNERS

Name and Address of Owner	Vessel Name	Hull No.
HL Tiger LLC	Horizon Tiger	0387
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Hunter LLC	Horizon Hunter	0388
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Hawk LLC	Horizon Hawk	0389
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Falcon LLC	Horizon Falcon	0409
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134
HL Eagle LLC	Horizon Eagle	0427
Corporation Trust Center
1209 Center Street
Wilmington, Delaware 19801-1134

A-1

EX-10.4

Exhibit 10.4

INTEREST AND L/C LIABILITY AGREEMENT

THIS INTEREST AND L/C LIABILITY AGREEMENT, dated April 10, 2006 (this “Agreement”), is among HORIZON LINES, LLC., a Delaware limited liability company (“HLL”), SHIP FINANCE INTERNATIONAL LIMITED., a Bermuda company (the “SFL”), and FORTIS CAPITAL CORP., as Security Trustee (the “Security Trustee”) for the Lenders and the Swap Providers. Capitalized terms used but not defined herein shall have the meaning assigned such terms in the Credit Agreement (as defined below).

WHEREAS:

1. By a Credit Agreement dated as of April 7, 2006 (as the same may be amended or supplemented from time to time, the “Credit Agreement”), among HL Eagle LLC, HL Falcon LLC, HL Hawk LLC, HL Hunter LLC and HL Tiger LLC as joint and several borrowers (together, the “Borrowers”), the banks and financial institutions described therein as Lenders (the “Lenders”), Fortis Capital Corp. as Sole Book Runner, Lead Arranger, Agent and Security Trustee, The Governor and Company of the Bank of Scotland and NIBC Bank N.V., as Co-Arrangers, and Fortis Bank NV/SA, New York Branch, HBOS Treasury Services plc and NIBC Bank N.V., as Swap Providers (the “Swap Providers”), the Lenders have agreed to make loans to the Borrowers in the aggregate principal amount of up to Two Hundred Ten Million United States Dollars (U.S.$210,000,000) upon and subject to the terms therein described (the “Loan”).

2. The loan facility includes a U.S.$38,000,000 sub-limit letter of credit facility which will be used to issue the Letters of Credit required to be issued during the Pre-Delivery Period to satisfy the security deposits that the Borrowers are required to post under the Memoranda of Agreement entered into with the Sellers for the sale and purchase of the Vessels.

3. Pursuant to Master Agreements on the 1992 ISDA Master Agreement (Multicurrency-Crossborder) form dated April 10, 2006 made between the Borrowers and the Swap Providers, the Borrowers intend to enter into certain Transactions (as such term is defined in the said Master Agreements) pursuant to separate Confirmations providing for, amongst other things, the payment of certain amounts by the Borrowers to the Swap Providers in connection with the interest payable on the Loan.

4. Pursuant to an Interest Guarantee dated the date hereof (the “Interest Guarantee”) made by SFL in favor of the Security Trustee, SFL has guaranteed the Borrowers’ liability under the Master Agreements to the Swap Providers during the Pre-Delivery Period upon the terms and conditions stated therein.

5. Pursuant to a L/C Guarantee dated the date hereof (the “L/C Guarantee”, and together with the Interest Guarantee, the “SFL Guarantees”) made by SFL in favor of the Security Trustee, SFL has guaranteed the Borrowers’ liability to the Issuing Lender and the Letter of Credit Participants during the Pre-Delivery Period for the issuance of, and in respect of any drawings under, the Letters of Credit upon the terms and conditions stated therein.

6. Pursuant to a Reimbursement Agreement dated the date hereof (the “Reimbursement Agreement”) between HLL, SFL Holdings LLC (“SFL Holdings”) and the Borrowers, HLL has agreed to reimburse SFL Holdings and the Borrowers for certain liabilities upon the terms and conditions stated therein.

7. Pursuant to an Assignment of Reimbursement Agreement dated the date hereof (the “Reimbursement Agreement Assignment”), SFL Holdings and the Borrowers have assigned their rights under the Reimbursement Agreement to the Security Trustee, for the benefit of the Lenders and the Swap Providers, as security for the Borrowers’ obligations under the Loan Documents.

8. Pursuant to a Consent and Agreement dated the date hereof HLL consented to the Reimbursement Agreement Assignment.

9. HLL is providing to the Security Trustee eight (8) letters of credit (each, a “Back-up L/C” and collectively, the “Back-Up L/Cs”) issued pursuant to HLL’s senior credit facility, in the aggregate amount of $29,337,500; three of such letters of credit shall each be in the amount of $8,512,500 and shall each support HLL’s obligation under the Reimbursement Agreement to reimburse the relevant Borrower in respect of such Borrower’s liability under the Credit Agreement for amounts drawn by the beneficiary thereof under a Letter of Credit issued under the Credit Agreement (a “L/C Draw”); and five of such letters of credit shall each be in the amount of $760,000 and shall support HLL’s obligation under the Reimbursement Agreement to reimburse the relevant Borrower in respect of such Borrower’s liability under the Mater Agreements for a Delivery Failure (as defined in the Master Agreements) (a “Swap Breakage”).

10. The parties hereto desire to set forth the terms and conditions upon which the Security Trustee will exercise its rights under the SFL Guarantees and the Reimbursement Agreement, as assigned to it under the Reimbursement Agreement Assignment.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Section 1. Event of Default. (a) At any time during the Pre-Delivery Period, upon either one (or more) L/C Draw(s) and/or one (or more) Swap Breakage(s), the Security Trustee shall make written demand upon SFL for payment under the SFL Guarantees in an amount equal to, as reasonably calculated by the Security Trustee, the sum of (i) the aggregate amount of such L/C Draw(s), (ii) the aggregate amount due for Swap Breakage(s), and (iii) any other amounts due in connection therewith under the Credit Agreement or the Master Agreements with respect to the Vessel or Vessels giving rise to the event(s) that result in such L/C Draw(s) and Swap Breakage(s) but excluding any amounts due under the Credit Agreement or the Master Agreements with respect to any other Vessel (the “Liability Amount”). The written demand shall set forth in reasonable detail the basis for and the calculation of the Liability Amount and shall be conclusive and binding for all purposes, absent manifest error.

(b) Within two (2) Business Days following its receipt of written demand by the Security Trustee, SFL shall either (i) pay the Security Trustee the Liability Amount or (ii) notify the Security Trustee that, in the reasonable opinion of SFL, the event(s) giving rise to the L/C Draw(s) and/or Swap Breakage(s) did not result from an Event of SFL Default having occurred under the Agreement to Acquire and Charter dated the date hereof (the “Agreement to Acquire and Charter”) among SFL, SFL Holdings, the Borrower and Horizon Lines, LLC, and that SFL is not liable for the Liability Amount. The Security Trustee shall have no obligation or duty to ascertain whether an Event of SFL Default has in fact occurred.

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(c) In the event that SFL gives the Security Trustee the notice described in Section 1(b)(ii), the Security Trustee shall make written demand upon HLL under the Reimbursement Agreement for payment of the Liability Amount. The written demand shall set forth in reasonable detail the basis for and the calculation of the Liability Amount and shall be conclusive and binding for all purposes, absent manifest error.

(d) Within two (2) Business Days following its receipt of written demand by the Security Trustee, HLL shall either (i) reimburse the Security Trustee under the Reimbursement Agreement for such L/C Draw(s) and/or Swap Breakage(s) in an amount equal to the Liability Amount by the Security Trustee drawing upon the Back-Up L/C(s) related to the relevant Vessel(s) in an amount equal to the Liability Amount or (ii) notify the Security Trustee that, in the reasonable opinion of HLL, the event(s) giving rise to the L/C Draw(s) or Swap Breakage(s) did not result from an Event of HLL Default having occurred under the Agreement to Acquire and Charter and that HLL is not liable for the Liability Amount. The Security Trustee shall have no obligation or duty to ascertain whether an Event of HLL Default has in fact occurred.

(e) In the event that HLL gives the Security Trustee the notice described in Section 1(d)(ii), the parties agree that a deemed dispute (a “Deemed Dispute”) shall have occurred.

Section 2. Deemed Dispute. (a) Upon the occurrence of a Deemed Dispute, the Security Trustee shall notify each of SFL and HLL thereof and, within two (2) Business Days of the date of such notice, the Security Trustee shall draw upon the Back-Up L/Cs related to the relevant Vessel(s) in an amount equal 50% of the Liability Amount and SFL shall pay the Security Trustee an amount equal to 50% of the Liability Amount. Such payment by SFL shall be by wire transfer and in immediately available funds to the Agent’s Account at JPMorgan Chase Bank, New York, New York, ABA #021000021, Account Number 001-1-624418, Ref.: SFL/Horizon, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto. Each such payment shall be irrevocable and unconditional.

(b) Notwithstanding any provision of any Loan Document or other document to which any of the parties hereto are a party, (i) each of SFL and HLL hereby irrevocably waives any right to assert, enforce, or otherwise exercise any right of subrogation to any of the rights, security interests, claims, or liens which the Security Trustee, the Agent, any Lender or the Swap Providers may have against any Person in respect of the Liability Amount, (ii) each of SFL and HLL shall not have any right of recourse, reimbursement, contribution, indemnification, or similar right (by contract or otherwise) against the Security Trustee, the Agent, any Lender or the Swap Providers in respect of the Liability Amount, and (iii) each of SFL and HLL hereby irrevocably waives any and all of the foregoing rights and also irrevocably waives the benefit of, and any right to participate in, any Collateral or other security given to the Security Trustee, the Agent, any Lender or the Swap Providers to secure payment of the Liability Amount.

Section 3. Return of Back-Up L/Cs. (a) The Security Trustee shall return to HLL each Back-up L/C relating to a Vessel that has been delivered to and accepted by SFL Holdings under the relevant Memorandum of Agreement for such Vessel undrawn on the date of such delivery and acceptance promptly upon the return of the corresponding Letter of Credit issued under the Credit Agreement in respect of such Memorandum of Agreement being returned undrawn to the Security Trustee.

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(b) Following a Deemed Dispute, the Security Trustee shall return to HLL the related Back-up L/C to HLL promptly after 50% of the amount thereof has been drawn by the Security Trustee in accordance with Section 2(a) of this Agreement.

Section 4. Representations, Warranties and Covenants. Each of SFL and HLL hereby represents, warrants and covenants as follows:

(a) The execution, delivery and performance by it of this Agreement and the consummation of other transactions contemplated hereby, are within its power, have been duly authorized by all necessary company or corporate action, as the case may be, and do not (i) contravene its organizational documents, (ii) violate any applicable law, order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any credit agreement, contract, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting it or any of its properties, or (iv) result in or require the creation or imposition of any lien upon or with respect to any of its properties.

(b) It is not in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, credit agreement, indenture, mortgage, deed of trust, lease or other instrument where such violation or breach is reasonably likely to result in a Material Adverse Effect with respect to it.

(c) No authorization, approval, consent or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other consent or approval of any other person is required for the due execution, delivery, recordation, filing or performance by it of its obligations this Agreement.

(d) This Agreement has been duly executed and delivered by the it and is the legal, valid and binding obligations of it, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of creditors’ rights generally (regardless of whether enforcement is sought in equity or at law).

Section 5. Amendment. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by all of the parties hereto.

Section 6. Notices. All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic, telex communication) and overnight couriered, telecopied, telegraphed, telexed, or delivered:

(a) if to SFL, at 14 Par-la-Ville Road, Hamilton HM 08 Bermuda (Telefacsimile: 441-295-3494);

(b) if to HLL, at 4064 Colony Road, Suite 200, Charlotte, North Carolina 28211, Attention: Chief Financial Officer, (Telefacsimile: 704-973-7034); and

(c) if to the Security Trustee, at 520 Madison Avenue, New York, New York 10022, Attention: Loan Syndication/Agency (Telefacsimile: 212-340-5450).

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or at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall be effective when received, if overnight couriered or delivered or telecopied (including machine acknowledgment).

Section 7. Governing Law; Jurisdiction; Waiver of Jury Trial.

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b) Each of the parties hereto hereby irrevocably submits to the jurisdiction of any New York State or Federal court sitting in New York County and any appellate court from any thereof in any action or proceeding arising out of or relating to this Agreement, and each of the parties hereto hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or in such Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent that it may effectively do so, any objection it may now or hereafter have to the laying of the venue of any action or proceeding arising out of or relating to this Agreement and the defense of an inconvenient forum to the maintenance of any such action or proceeding. Each of the parties hereto also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to it at its address specified in Section 4 above. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Nothing in this Section 7(b) shall (i) affect the right of the Security Trustee to serve legal process in any other manner permitted by law or the right of the Security Trustee to bring any action or proceeding against SFL or HLL or their respective properties in the courts of any other jurisdictions where such action or proceeding may be heard or (ii) exclude or limit any right the Security Trustee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

(c) EACH OF THE PARTIES WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each of the parties has duly executed and delivered this Agreement on the day and year first above written.

HORIZON LINES, LLC
By:	/s/  Michael T. Avara
Name:	Michael T. Avara
Title:	VP, Treasurer & Investor Relations
SHIP FINANCE INTERNATIONAL LIMITED
By:	/s/  Gary J. Wolfe
Name:	Gary J. Wolfe
Title:	Attorney-in-fact/Authorized Person
FORTIS CAPITAL CORP.
By:	/s/  Svein Engh
Name:	Svein Engh
Title:	Managing Director
By:	/s/  Carl Rasmussen
Name:	Carl Rasmussen
Title:	Senior Vice President

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EX-10.5

Exhibit 10.5

AMENDMENT NO. 2

TO

AMENDED AND RESTATED

CREDIT AGREEMENT

This AMENDMENT NO. 2 to the AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 7, 2006 (this “Amendment”), is entered into among HORIZON LINES, LLC, a Delaware limited liability company (the “Borrower”), UBS AG, STAMFORD BRANCH, as administrative agent (in such capacity, the “Administrative Agent”), UBS AG, STAMFORD BRANCH, as Issuing Bank (in such capacity, the “Issuing Bank”) and the Lenders party hereto, and amends the Amended and Restated Credit Agreement dated as of April 7, 2005 (as amended by Amendment No. 1 thereto, dated as of September 22, 2005, and as may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) entered into among the Borrower, the institutions from time to time party thereto as lenders, UBS AG, Stamford Branch, as administrative agent (in such capacity, the “Administrative Agent”), HORIZON LINES HOLDING CORP., a Delaware corporation (the “Co-Borrower”), and the other parties thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Required Lenders and the Administrative Agent amend the Credit Agreement to effect the changes described below in Section One;

WHEREAS, Section 9.02 of the Credit Agreement provides that the Credit Agreement may be amended, modified and waived from time to time;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:

SECTION ONE Amendments.

(a) The following definitions shall be added to Section 1.01 of the Credit Agreement:

(i) “Amendment No. 2. Effective Date” shall mean the date that Amendment No. 2 to this Agreement shall become effective in accordance with its terms.”

(ii) “April 2006 SFL Documents” shall mean the collective reference to the shipbuilding agreements, purchase agreements, memorandum of agreements, reimbursement agreements, indemnity agreements, agreements to acquire and charter, bareboat agreements, credit agreements and other agreements, instruments and documents, each dated as of the Amendment No. 2 Effective Date, pursuant to which SFL shall purchase five Vessels and then

lease and/or charter such Vessels to Holdings or one or more of its subsidiaries, in each case as any one or more of such agreements may be amended, modified or otherwise changed following the Amendment No. 2 Effective Date in any manner that could not reasonably be expected to materially and adversely affect the interests of the Lenders or as otherwise may be agreed to by the Administrative Agent.”

(iii) “SFL” shall mean Ship Finance International, Ltd and/or any of its subsidiaries or Affiliates.

(b) The reference to “$20,000,000” in Section 2.05(b) of the Credit Agreement is hereby changed to “$41,000,000”.

(c) The following shall be inserted at the end of the third sentence of Section 3.10(c): “; provided that neither the Chartered Vessels chartered pursuant to the April 2006 SFL Documents nor the owners of such Chartered Vessels shall be required to be qualified to operate in the coastwise trade of the United States.”

(d) The word “and” at the end of clause (xxiii) of Section 6.01 shall be deleted.

(e) The period at the end of clause (xxiv) of Section 6.01 shall be replaced with “; and”.

(f) The following new clause (xxv) shall be added at the end of Section 6.01: “(xxv) any Guarantees (whether in the form of a reimbursement, indemnity or otherwise) of Holdings or any of its subsidiaries of any obligations of SFL in connection with one or more deposits or other obligations in respect of the purchase of Vessels by SFL pursuant to the April 2006 SFL Documents, including the issuance of any Letters of Credit (and any drawing thereon) for the benefit of SFL or any other Person, including any lender of SFL, to support any of such Guarantees, so long as the aggregate amount of all such Guarantees (and the aggregate face amount of all Letters of Credit provided in connection therewith) does not exceed $42.5 million.”

(g) The period at the end of the proviso to clause (s) of Section 6.04 shall be replaced with “; and”.

(h) The following new clause (t) shall be added to the end of Section 6.04: “(t) any Guarantee (whether in the form of a reimbursement, indemnity or otherwise) permitted by, or described under, Section 6.01(xxv), including any Letters of Credit (and any drawing thereon) provided to SFL or any lender or financing provider of SFL to support such Guarantee.”

SECTION TWO Conditions to Effectiveness. This Amendment shall become effective as of the date (the “Amendment No. 2 Effective Date”) if, at or prior to 5:00 p.m. on April 5, 2006 (such date and time, the “Deadline”), the Administrative Agent shall have received counterparts of this Amendment executed by (i) the Borrower, (ii) UBS AG, Stamford Branch, in its capacity as Issuing Bank and as Administrative Agent and (iii) fully executed Confidential Lender Authorizations (as defined below) from a number of Lenders sufficient to constitute

the Required Lenders. The effectiveness of this Amendment (other than Sections Five, Six and Eight hereof) is conditioned upon the accuracy of the representations and warranties set forth in Section Three hereof.

SECTION THREE Representations and Warranties. In order to induce the Lenders party hereto and the Issuing Bank 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 Amendment No. 2 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 further 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. 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 Amendment No. 2 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 Amendment No. 2 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 and Revolving Exposure of such Revolving Lender as of the Amendment No. 2 Effective Date; provided that no fees referred to in this sentence shall be payable if the Amendment No. 2 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 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 or electronic mail 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.

[Signature Pages Follow]

HORIZON LINES, LLC, as Borrower
By:	/s/ Michael T. Avara
Name:	Michael T. Avara
Title:	VP, Treasurer & Investor Relations

UBS AG, STAMFORD BRANCH,
as Issuing Bank and Administrative Agent
By:	/s/ Richard L. Tavrow
Name:	Richard L. Tavrow
Title:	Director—Banking Products Services, U.S.
By:	/s/ Irja R. Otsa
Name:	Irja R. Otsa
Title:	Associate Director—Banking Products Services, U.S.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

HORIZON LINES AND SHIP FINANCE COMPLETE

APPROXIMATELY $280 MILLION CONTAINER VESSELS TRANSACTION

CHARLOTTE, NC April 11, 2006 Further to its announcement of March 17, 2006, Horizon Lines, Inc. (NYSE:HRZ) announced today that its major operating subsidiary, Horizon Lines, LLC, has closed the definitive long-term charters and related agreements with Ship Finance International Limited (NYSE:SFL) and its subsidiaries to lease five newly-built, U.S.-flag container vessels. The subsidiaries of Ship Finance will acquire the vessels from third parties for a sum of approximately $280 million.

The five sister vessels are being built at the Hyundai Mipo shipyard in Korea and are scheduled to be delivered over the course of a five-month period commencing at the beginning of 2007. The vessels have a capacity of 2,824 TEUs and are capable of a service speed of 23 knots.

Horizon Lines will operate the vessels in its expanded TP1 service from the U.S. West Coast to Guam and Asia. The term of each bareboat charter will be 12 years with a 3-year renewal option on the part of Horizon Lines. Horizon Lines will have the option to buy the vessels after 5, 8, 12 and 15 years. Additional information regarding this transaction will be included in the Form 8-K to be filed with the SEC on April 17, 2006.

Chuck Raymond, President and CEO of Horizon Lines said, “The addition of these five new vessels commences our long-term vessel replacement strategy in a very cost effective and capital efficient manner. This transaction will benefit our customers, partners and shareholders, while reducing the age of our operated fleet to one of the lowest in the markets we serve. We look forward to our mutually beneficial relationship with Ship Finance International Limited.”

This press release includes “forward-looking statements,” as defined by federal securities laws, with respect to financial condition, results of operations and business. All forward-looking statements involve risk and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results. We undertake no obligation and specifically decline any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Horizon Lines:

Horizon Lines, LLC is the nation’s leading Jones Act container shipping and integrated logistics company, operating 16 U.S.-flag vessels on routes linking the continental United States with Alaska, Hawaii, Guam, and Puerto Rico. Horizon Lines also owns Horizon Services Group, an organization with a diversified offering of cargo management and tracking services being marketed to shippers, carriers, and other supply chain participants. Horizon Lines, LLC and Horizon Services Group are wholly owned subsidiaries of Horizon Lines, Inc., which trades on the New York Stock Exchange under the ticker symbol HRZ.

Media Contact

Mike Avara, Horizon Lines

704-973-7000