WARRANT EXERCISE AGREEMENT
This Warrant Exercise Agreement (this "Agreement") is dated as of April
30, 2007, among Rand Logistics, Inc., a Delaware corporation (the "Company"),
and the warrant holders listed on Schedule 1 hereto (each, a "Warrant Holder"
and collectively, the "Warrant Holders").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
in order to induce the Warrant Holders to exercise certain of the Company's
outstanding publicly traded warrants ("Warrants") held by the Warrant Holders as
of the date of this Agreement, the Company is willing to waive receipt of $0.50
of the exercise price of such Warrants, thereby effectively reducing the
exercise price of the warrants from $5.00 to $4.50.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Warrant Holders
agree as follows:
ARTICLE I.
EXERCISE OF WARRANTS
1.1 Promptly following execution of this Agreement, but in no event later
than 4:00 p.m. (New York City time) on the second business day immediately after
the date hereof (such two business day period, the "Discount Exercise Period"),
each Warrant Holder shall cause the number of Warrants listed opposite such
Warrant Holder's name on Schedule 1 hereto (the "Subject Warrants") to be
exercised in accordance with the terms and procedures for exercise provided in
the Warrants.
1.2 The Company shall direct Continental Stock Transfer & Trust Company,
as warrant agent for the Warrants (a) to accept as valid, exercises of the
Subject Warrants during the Discount Exercise Period at an exercise price of
$4.50 provided that the exercise otherwise complies with all applicable
requirements for the exercise of Warrants as provided by the terms of the
Warrants and (b) subject to satisfaction of the conditions to issuance of shares
of Common Stock (as defined in the Warrant) set forth in the Company's
Certificate of Incorporation pertaining to citizenship of holders of Common
Stock, to issue one shares of Common Stock in respect of each Subject Warrant so
exercised.
1.3 The respective obligations of the parties set forth herein shall be
subject to absence during the Discount Exercise Period of (a) any formal
suspension in trading in the Common Stock, (b) any order issued by a court,
arbitrator or governmental authority restraining the transactions contemplated
by this Agreement, and (c) any pending proceeding challenging the transactions
contemplated by this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 The Company hereby represents and warrants to each Warrant Holder as
follows:
(a) Authorization; Enforcement. The Company has the requisite
corporate power and authority, and has taken all requisite corporate action to
enter into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder. The execution and delivery of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company. This Agreement has been duly executed by the Company and
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) as limited by public policy.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) conflict with or violate any
provision of the Company's certificate of incorporation or bylaws, or (ii)
conflict with, or constitute a default (or an event that, with notice or lapse
of time or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument to which the Company is a party or by which any property or asset of
the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject.
(c) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person in connection with the
execution, delivery and performance by the Company of this Agreement, other than
(i) notice to The Nasdaq Stock Market LLC, and (ii) such filings following
consummation of the transactions contemplated hereunder as may be required under
the Securities Exchange Act of 1934, as amended.
2.2 Each Warrant Holder hereby, for itself and for no other Warrant
Holder, represents and warrants to the Company as follows:
(a) Organization; Authority. Such Warrant Holder is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and authority to enter
into and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by such Warrant Holder, and the
performance by such Warrant Holder of the transactions contemplated by this
Agreement, have been duly authorized by all necessary action on the part of such
Warrant Holder. This Agreement has been duly executed by such Warrant Holder and
constitutes the valid and legally binding obligation of such Warrant Holder,
enforceable against it in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, or similar laws relating to
or affecting the enforcement of creditors' rights generally and (ii) as limited
by equitable principles generally.
(b) Warrant Holder Status. Such Warrant Holder is an "accredited
investor" as defined in Rule 501(a) under the Securities Act of 1933, as
amended. Such Warrant Holder, either alone or together with its representatives,
has such knowledge, sophistication and
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experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Common Stock issuable
upon exercise of the Subject Warrants ("Warrant Shares") and has so evaluated
the merits and risks of such investment. Such Warrant Holder is able to bear the
economic risk of an investment in the Warrant Shares and is able to afford a
complete loss of such investment.
(c) Independent Investment Decision. Such Warrant Holder has
independently evaluated the merits of its decision to exercise the Subject
Warrants as provided in this Agreement, such decision has been independently
made by such Warrant Holder and such Warrant Holder confirms that it has only
relied on the advice of its own business and/or legal counsel and not on the
advice of the Company or its counsel.
ARTICLE III.
MISCELLANEOUS
3.1 Securities Laws Disclosure. Within the time period required by the
Exchange Act, the Company shall file a Form 8-K disclosing the material terms of
the transactions contemplated hereby, all as required by the Exchange Act.
3.2 Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into this Agreement.
3.3 Amendments; Waivers. No provision of this Agreement may be amended or
waived except in a written instrument signed by the waiving party or, in the
case of an amendment, by the Company and the Warrant Holder or Warrant Holders
adversely affected by such amendment. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
3.4 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. This Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
3.5 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Warrant Holders. Any Warrant Holder may
assign any or all of its rights under this Agreement to any Person to whom such
Warrant Holder assigns or transfers any Subject Warrants, provided such
transferee agrees in writing to be bound, with respect to the transferred
Subject Warrants, by the provisions hereof that apply to the "Warrant Holders."
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3.6 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
3.7 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement may be commenced
exclusively in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the "New York Courts"). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.
3.8 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Discount Exercise Period and the delivery of
the Warrant Shares.
3.9 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
3.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
3.11 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Warrant Holders and the Company will be entitled to specific performance under
this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of
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obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
3.12 Independent Nature of Warrant Holders' Obligations and Rights. The
obligations of each Warrant Holder under this Agreement are several and not
joint with the obligations of any other Warrant Holder, and no Warrant Holder
shall be responsible in any way for the performance of the obligations of any
other Warrant Holder under this Agreement. The decision of each Warrant Holder
to enter into this Agreement has been made by such Warrant Holder independently
of any other Warrant Holder. Nothing contained herein, and no action taken by
any Warrant Holder pursuant hereto, shall be deemed to constitute the Warrant
Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Warrant Holders are in any way acting
in concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Warrant Holder acknowledges that no other
Warrant Holder has acted as agent for such Warrant Holder in connection with
making entering into this Agreement and that no Warrant Holder will be acting as
agent of such Warrant Holder in connection with monitoring its investment in the
Warrant Shares or enforcing its rights under this Agreement. Each Warrant Holder
shall be entitled to independently protect and enforce its rights under this
Agreement, and it shall not be necessary for any other Warrant Holder to be
joined as an additional party in any proceeding for such purpose.
3.13 Acknowledgement and Waiver. Each Warrant Holder (i) understands that
there may exist material non-public information concerning the business, affairs
or financial condition of the Company that has not been made available to such
Warrant Holder or disclosed to such Warrant Holder by the Company, and that the
Company has made no representations to such Warrant Holder concerning the
Company or its business, affairs, financial condition or plans or proposals,
(ii) has determined to enter into this Agreement even though such Warrant Holder
does not have any such information described in clause (i) above, having made
its own investment decision and not relying on the absence of any such
information or any such representation from the Company, and (iii) waives any
claims it may have or may hereafter possess against the Company for failure to
disclose to such Warrant Holder any such material non-public information. Each
Warrant Holder (i) understands that the Company is relying on the truth of such
Warrant Holder's representations and agreements set forth in this Section 3.13
in agreeing to enter into this Agreement and (ii) irrevocably authorizes the
Company to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
3.14 Affect on Warrants. Each Warrant Holder acknowledges that the
Company's waiver of $0.50 of the exercise price of the Warrants contemplated
hereby shall be effective only during the Discount Exercise Period. Such
agreement by the Company to temporarily waive a portion of the exercise price
shall not constitute an amendment to the Warrant and shall not otherwise have
any affect upon the terms of the Warrants. The Company reserves all of its
rights under the Warrant, including the right to waive a portion of the exercise
price of the Warrants, or to otherwise reduce the exercise price of the
Warrants, at any time and from time to time in the future, with respect to some
or all of the Warrants.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant Exercise
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
Rand Logistics, Inc.
By: /s/ Laurence Levy
-----------------------------------
Name: Laurence Levy
Title: Chairman
Warrant Holders:
Knott Partners, LP
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: General Partner
Knott Partners Offshore Master Fund, LP
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: Investment Advisor
CommonFund Hedged Equity Company
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: Investment Advisor
Shoshone Partners, LP
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: Investment Advisor
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Finderne, LLC
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: Investment Advisor
Good Steward Trading Company SPC
By: /s/ David M. Knott
-----------------------------------
Name: David M. Knott
Title: Investment Advisor
/s/ David M. Knott
---------------------------------------
Leonard & Margaret Frierman
By: David M. Knott
Title: Investment Advisor
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Schedule 1
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Warrant Holder Subject Warrants
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Knott Partners, LP 345,200
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Knott Partners Offshore Master Fund, LP 600,000
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CommonFund Hedged Equity Company 88,600
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Shoshone Partners, LP 441,600
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Finderne, LLC 10,200
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Good Steward Trading Company SPC 17,800
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Leonard & Margaret Frierman 600
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