UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) August 27, 2007
Rand Logistics, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-50908 20-1195343
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
461 Fifth Avenue, 25th Floor, New York, New York 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 644-3450
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(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 240.13a-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Memorandum of Agreement
The information contained in Item 2.01 under the heading "Memorandum of
Agreement" is incorporated herein by reference.
Crew Manning Agreement
On August 27, 2007, the Registrant's wholly-owned subsidiary, Lower Lakes
Towing Ltd. ("Lower Lakes"), entered into a Crew Manning Agreement (the "Crew
Manning Agreement"), with Voyageur Marine Transport Limited ("Voyageur")
pursuant to which Voyageur agreed to staff two vessels owned by Lower Lakes, the
VOYAGEUR INDEPENDENT and the VOYAGEUR PIONEER (collectively, the "Vessels"),
with qualified crew members in accordance with sound crew management practices.
Under the Crew Manning Agreement, Voyageur is responsible for selecting and
training the Vessels' crews, payroll, tax and pension administration, union
negotiations and disputes and ensuring compliance with applicable requirements
of Canadian maritime law. Under the Crew Manning Agreement, Lower Lakes is
obligated to pay Voyageur an annual fee of $175,000 and pay or reimburse
Voyageur for its reasonable crew payroll expenses.
A copy of the Crew Manning Agreement is attached hereto as Exhibit 10.1
and is incorporated by reference herein.
Contract of Affreightment
On August 27, 2007, Lower Lakes entered into a Contract of Affreightment
(the "COA") with Voyageur and Voyageur Maritime Trading Inc ("VMT") pursuant to
which Voyageur and VMT will make a Canadian flagged vessel owned by VMT, the
MARITIME TRADER (the "Trader"), available exclusively to Lower Lakes for its use
in providing transportation and storage services for its customers. The COA
expires on December 31, 2011, and renews automatically annually thereafter
unless Lower Lakes provides Voyageur or VMT with notice of cancellation six
months prior to the end of the then current term. Under the COA, Lower Lakes is
obligated to pay Voyageur and VMT a portion of the freight rate it charges its
customers, subject to certain adjustments. Lower Lakes is also responsible for
all taxes, tolls, fees or tariffs levied against the Trader or its cargo,
provided that it can be recouped from its customers, otherwise, these costs will
be for the account of Voyageur and VMT. Pursuant to the COA, Voyageur and VMT
are responsible for ensuring the seaworthiness of the Trader and the compliance
of its crew with all safety, health and other applicable laws and regulations of
Canada. Voyageur, VMT and Voyageur's president also agreed not to compete with,
nor induce any employee to leave his employment with, Lower Lakes.
A copy of the COA is attached hereto as Exhibit 10.2 and is incorporated
by reference herein.
Option Agreement
In connection with the COA, on August 27, 2007, Lower Lakes entered into
an Option Agreement (the "Option Agreement") with VMT pursuant to which Lower
Lakes obtained the option to acquire the Trader for Cdn$5,000,000, subject to
certain adjustments. The option is exercisable between January 1, 2012 and
December 31, 2017, subject to certain early exercise provisions. If, at any time
prior to expiration of the option, VMT receives a bona fide offer from a third
party to purchase the Trader which VMT wishes to accept, Lower Lakes shall have
the right to acquire the Trader at the option price.
A copy of the Option Agreement is attached hereto as Exhibit 10.3 and is
incorporated by reference herein.
Amendment to Credit Agreement
On August 27, 2007, Lower Lakes, Lower Lakes Transportation Company
("LLTC"), Grand River Navigation Company, Inc. ("Grand River") and Rand LL
Holdings Corp., each subsidiaries of the Registrant, entered into a Fifth
Amendment (the "Amendment") to the Credit Agreement, dated March 3, 2006, with
General Electric Capital Corporation, as Agent and a lender, and GE Canada
Finance Holding Company ("GE Canada"), as a lender, and certain of each such
party's affiliates (the "Credit Agreement"). See Item 2.03 below for a
description of the additional terms of the Amendment.
A copy of the Amendment is attached hereto as Exhibit 10.4 and is
incorporated by reference herein.
ITEM 2.01. COMPLETION OF ACQUISTION OR DISPOSITION OF ASSETS.
Memorandum of Agreement
On August 27, 2007, Lower Lakes entered into and consummated the
transactions under a Memorandum of Agreement (the "Memorandum of Agreement"),
dated as of the same date, with Voyageur and Voyageur Pioneer Marine Inc.
(collectively, the "Sellers") pursuant to which Lower Lakes purchased the
Vessels from the Sellers for an aggregate purchase price of Cdn$25,000,000.
A copy of the Memorandum of Agreement is attached hereto as Exhibit 10.5
and 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.
Amendment
Pursuant to the Amendment, among other things, (i) the outstanding balance
of the Canadian term loan facility has been increased by Cdn$18,000,000 to
Cdn$36,868,000, (ii) the quarterly principal installment payments applicable to
the Canadian term loan borrowings have been increased by Cdn$540,000 to
Cdn$1,176,000, (iii) the "Commitment Termination Date" (as defined therein) was
extended to March 3, 2012, (iv) the quarterly principal installment payments
applicable to the US term loan borrowings have been extended at their current
rate through December, 2011 and (v) the borrowers under the Credit Agreement
amended certain financial covenants.
Guarantee
On August 27, 2007, Lower Lakes entered into a Guarantee (the "Guarantee")
with GE Canada, pursuant to which Lower Lakes agreed to guarantee up to
Cdn$1,250,000 (the "Guaranteed Obligations") of Voyageur's indebtedness to GE
Canada. Through a Letter of Credit Agreement, dated August 27, 2007, an
affiliate of Voyageur has agreed to contribute half of any amounts drawn under
the Guarantee. Under the Guarantee, Lower Lakes has several options available to
it in the event that GE Canada intends to draw under the Guarantee, including
(i) the right to exercise its option for the Trader under the Option Agreement
and (ii) the right to make a subordinated secured loan to Voyageur in an amount
at least equal to the amount intended to be drawn by GE Canada on terms as are
reasonably satisfactory to GE Canada and Voyageur.
Copies of the Guarantee and Letter of Credit Agreement are attached hereto
as Exhibits 10.6 and 10.7, respectively, and are incorporated by reference
herein.
ITEM 8.01. OTHER EVENTS
On August 28, 2007, the Registrant issued a press release announcing the
acquisition described in Item 2.01 of this Current Report on Form 8-K. A copy of
the press release is attached as Exhibit 99.1 and is incorporated by reference
herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(D) Exhibits:
10.1 Crew Manning Agreement, dated August 27, 2007, between Lower Lakes Towing
Ltd. and Voyageur Marine Transport Ltd.
10.2 Contract of Affreightment, dated August 27, 2007, between Voyageur Marine
Transport Ltd., Voyageur Maritime Trading Inc. and Lower Lakes Towing Ltd.
10.3 Option Agreement, dated August 27, 2007, between Lower Lakes Towing Ltd.
and Voyageur Maritime Trading Inc.
10.4 Fifth Amendment to Credit Agreement, dated as of August 27, 2007, by and
among Lower Towing Ltd., Lower Lakes Transportation Company, Grand River
Navigation Company, Inc., the other Credit Parties signatory thereto,
General Electric Capital Corporation, as a US Lender and as Agent, and GE
Canada Finance Holding Company, as a Cdn Lender.
10.5 Memorandum of Agreement, dated August 27, 2007, between Voyageur Marine
Transport Ltd., Voyageur Pioneer Marine Inc. and Lower Lakes Towing Ltd.
10.6 Guarantee, dated August 27, 2007, between Lower Lakes Towing Ltd. And GE
Canada Finance Holding Company.
10.7 Letter of Credit Agreement, dated August 27, 2007, between Lower Lakes
Towing Ltd. and Heddle Marine Service Inc.
99.1 Press Release, dated August 28, 2007.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
RAND LOGISTICS, INC.
Date: August 31, 2007 By: /s/ Laurence S. Levy
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Name: Laurence S. Levy
Title: Chairman of the Board and Chief
Executive Officer