ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Barge Acquisition
On December 1, 2011, Grand River Navigation Company, Inc. (“Grand River”), an indirect wholly-owned subsidiary of Rand Logistics, Inc. (the “Company”), entered into, and consummated the transactions contemplated by, an Asset Purchase Agreement (the “Barge Agreement”) with U.S. Bank National Association, as Trustee of the GTC Connecticut Statutory Trust, pursuant to which Grand River acquired a self-unloading barge (the “Barge”). The purchase price for the Barge, together with the related stores and equipment, was US $12,311,375 plus the value of the remaining bunkers and unused lubricating oils onboard the Barge at the closing of the acquisition. A copy of the Barge Agreement is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Amendment to Credit Facility
Also on December 1, 2011, Lower Lakes Towing Ltd. (“Lower Lakes”), an indirect wholly-owned subsidiary of the Company, Lower Lakes Transportation Company, also an indirect wholly owned subsidiary of the Company, Grand River, the other credit parties signatory thereto, the lenders signatory thereto and General Electric Capital Corporation, Inc., as Agent, entered into a First Amendment (the “Amendment”) to the Second Amended and Restated Credit Agreement (the “Credit Agreement”), dated as of September 28, 2011.
The Amendment increased (i) the US Term Loan (as such term is defined in the Credit Agreement) by US $25,000,000, (ii) the quarterly payments due under the US Term Loan from US $366,666.67 to US $704,000 beginning with the quarterly payment due in June 2012 and (iii) the seasonal overadvance revolving credit facility to US $12,000,000, subject to certain limitations. Additionally, the Amendment eliminates the quarterly payments due under the US Term Loan in December 2011 and March 2012. The Amendment also modified the definitions of “Capital Expenditures”, “Cdn. Vessels”, “EBITDA”, “Fleet Mortgage”, “Requisite Lenders”, “Requisite Revolving Lenders” and “US Owned Vessels” and amended the Minimum EBITDA, Maximum Senior Debt to EBITDA Ratio, Maximum Capital Expenditures, Minimum Appraised Value to Term Loan Outstandings and Minimum Liquidity covenants. A copy of the Amendment is attached hereto as Exhibit 10.2 and is incorporated by reference herein.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On December 1, 2011, Grand River completed the acquisition of a tug (the “Tug”), pursuant to the terms of an Asset Purchase Agreement, dated as of September 21, 2011 (the “Tug Agreement”), by and between Grand River and U.S. United Ocean Service, LLC. Grand River purchased the Tug for $ 7,795,625, plus the value of the remaining bunkers and unused lubricating oils onboard the Vessel at the closing of the acquisition.
The information contained in Item 1.01 under the heading “Barge Acquisition” is incorporated by reference herein.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information contained in Item 1.01 under the heading “Amendment to Credit Facility” is incorporated by reference herein.
