STANDBY PURCHASE AGREEMENT
February
15, 0000
Xxxxxxxxxx
& Xxxx Xxxxxxxx Railroad
#0 Xxxx
Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxx Xxxxxxxx 00000
Dear
Pittsburgh & West Virginia Railroad:
This
letter confirms our agreement with respect to the intention of Pittsburgh &
West Virginia Railroad., a Pennsylvania unincorporated business trust (the
“Company”), to
raise additional capital through a rights offering, of 113,250 shares (the “Underlying Shares”)
of the Company’s common shares, no par value per share (the “Common Shares”), to
its shareholders of record as of date to be determined (“Rights Offering”)
with the participation of the Standby Purchaser for any unsubscribed shares in
the Rights Offering (The Rights Offering and the offering to the Standby
Purchaser are hereinafter referred to as the “Offering”).
Capitalized terms used herein and not defined herein shall have the meanings set
forth in the Prospectus (as hereinafter defined).
A
REGISTRATION STATEMENT ON FORM S-3 (THE “REGISTRATION
STATEMENT”) RELATING TO THE COMPANY’S COMMON SHARES WILL BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) ON FEBRUARY 15,
2011. NO OFFER TO BUY SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE
PRICE CAN BE RECEIVED UNTIL THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE, AND
ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF
ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITS ACCEPTANCE GIVEN AFTER THE
EFFECTIVE DATE.
1. Purchase and Sale of
Unsubscribed Shares. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to issue and sell to Xxxxxx Bay Partners, LP as a standby
purchaser (the “Standby Purchaser”),
and the Standby Purchaser agrees to purchase from the Company, at the
subscription price set forth in the Rights Offering (the “Subscription Price”),
the number of Underlying Shares, (up to 113,250 Underlying Shares in
total) (the “Standby
Shares”), that remain available for subscription after allocating all of
the Underlying Shares validly subscribed for through the exercise of rights (the
“Rights”) in
the Rights Offering (such remaining shares being hereinafter referred to as the
“Unsubscribed
Shares”).
2. The Closing.
As soon as practicable following its determination of the number of
Unsubscribed Shares, the Company shall notify the Standby Purchaser of the
number of Standby Shares, if any, to be purchased by the Standby Purchaser
pursuant to Section l. The delivery of and payment for the Standby Shares shall
take place at the offices of Xxxxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other location as the parties agree, promptly
following the expiration date of the Rights Offering, such time and date to be
not more than ten (10) business days after the foregoing notification and
to be specified therein (such time and date being referred to as the “Closing Time,” the
date of the Closing Time being referred to as the “Closing Date” and the
consummation of the transaction being referred to as the “Closing”).
3. Delivery of Standby
Shares. At the Closing, the Standby Shares to be
purchased by the Standby Purchaser hereunder, registered in the name of the
Standby Purchaser or its assignee and/or nominee(s), as the Standby Purchaser
may specify in writing at least three (3) days prior to the Closing Date,
shall be delivered by or on behalf of the Company to the Standby Purchaser, for
the Standby Purchaser’s account, against delivery by the Standby Purchaser of
the Subscription Price therefor in immediately available funds in the form of
one or more federal funds checks or a wire transfer to an account designated by
the Company.
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4. Representations and
Warranties. The Company and the Standby Purchaser hereby confirm
their agreement as follows:
(a) The
Company represents and warrants to, and covenants with, the Standby Purchaser as
follows:
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(i)
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The
Company has filed a Registration Statement relating to the Offering on
Form S-3 with the SEC and all amendments thereto. Such Registration
Statement as amended at the time it becomes effective (the “Effective
Date”), including all exhibits and all information incorporated
therein by reference, is herein called the “Registration
Statement.” The prospectus filed with the SEC pursuant to the
Securities Act of 1933 (the “Securities
Act”) and the regulations promulgated thereunder (“Regulations”),
and which constitutes a part of the Registration Statement, as amended,
supplemented and otherwise finalized, and all information incorporated
therein by reference, is herein called the “Prospectus.”
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(ii)
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The
Underlying Shares and the Standby Shares have been duly authorized by the
Company, and when issued and delivered by the Company against payment
therefor, will be duly and validly issued, fully paid and non-assessable.
The Rights have been duly authorized by the Company, and when issued and
delivered by the Company, will constitute valid and legally binding
obligations of the Company, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general
equity principles.
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(iii)
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The
Company is an unincorporated business trust and is validly existing as a
business trust in good standing under the laws of the State of
Pennsylvania, with the requisite power and authority to perform its
obligations under this Agreement.
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(iv)
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The
execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action of the
Company; this Agreement has been duly executed and delivered by the
Company; and this Agreement, when duly executed and delivered by the
Standby Purchaser, will constitute a valid and legally binding agreement
of the Company enforceable against it in accordance with its terms, except
as may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity
principles.
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(v)
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On
the Closing Date, on the Effective Date, at each time the Registration
Statement or any amendment or supplement thereto was filed with the SEC
pursuant to the Securities Act and the Regulations and at each time a sale
of securities in connection with the Offering was agreed, (a) the
Registration Statement and the Prospectus complied and will comply in all
material respects with the requirements of the Securities Act and the
Regulations; and (b) neither the Registration Statement nor the Prospectus
contained or will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing does not apply
to statements or omissions in the Registration Statement or the Prospectus
made in reliance upon and in conformity with information furnished by the
Standby Purchaser to the Company expressly for use
therein.
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(vi)
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Neither
the Company nor any of its direct or indirect subsidiaries (“Subsidiaries”)
is in violation of its articles of incorporation, articles of
organization, code of regulations or operating agreement, or in default
under any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party, the effect of which violation or default
would be material to the business, properties, financial condition or
results of operations of the Company and its Subsidiaries, taken as a
whole, and the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or its Subsidiaries or
conflict with, or constitute or result in a breach of or default under, or
the terms of any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party or by which any of the Company’s or
any Subsidiary’s properties or assets are bound, or result in a violation
of the certificate of incorporation, articles of association, certificate
of trust or code of regulations of the Company or any of its Subsidiaries
or any order, rule or regulation of any court or governmental agency
having jurisdiction over the Company, any of its Subsidiaries or any of
their property; and, except as required by the Regulations, the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
and applicable state securities law, no consent, authorization or order
of, or filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this
Agreement.
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(vii)
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The
Company is not, and after giving effect to the Offering and the
application of the proceeds thereof as described in the Prospectus will
not be,
required to register as an “investment company” as such term is defined in
the Investment Company Act of 1940.
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(viii)
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There
is and has been no failure on the part of the Company and any of the
Company’s trustees or officers (other than Xxxxx Xxxxxx, as to whom the
Company makes no representation), in their capacities as such, to comply
with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated in connection
therewith.
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(ix)
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The
Company has not taken and will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
in order to facilitate the sale or resale of any securities of the
Company, and the Company is not aware of any such action taken or to be
taken by any person.
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(b) The
Standby Purchaser represents and warrants to, and covenants with, the Company as
follows:
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(i)
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The
Standby Purchaser is a Limited Partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction, with
full power and authority to perform its obligations under this
Agreement.
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(ii)
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The
Standby Purchaser has received from the Company and has reviewed a copy of
the Prospectus as well as the public documents filed in connection
therewith through the date hereof, and except as set forth in this
Agreement and in the Prospectus, the Standby Purchaser is not relying on
any information other than information contained in this Agreement or the
Prospectus.
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(iii)
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The
Standby Purchaser is acquiring the Standby Shares pursuant to this
Agreement for its own account for investment only and not with a view to
any resale, distribution or other disposition thereof except as provided
herein.
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(iv)
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The
execution, delivery and performance of this Agreement by the Standby
Purchaser and the consummation by the Standby Purchaser of the
transactions contemplated hereby have been duly authorized by all
necessary action of the Standby Purchaser; and this Agreement, when duly
executed and delivered by the Standby Purchaser, will constitute a valid
and legally binding instrument, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors’ fights and to general equity
principles.
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(v)
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The
Standby Purchaser is not insolvent and has sufficient financial ability to
purchase the Standby Shares on the terms and conditions contained in this
Agreement and will have the necessary funds on the Closing
Date.
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(vi)
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No
state, federal or foreign regulatory approvals, permits, licenses or
consents or other contractual or legal obligations are required with
respect to the Standby Purchaser in order for the Standby Purchaser to
enter into this Agreement or purchase the Standby
Shares.
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(vii)
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The
execution and delivery of this Agreement, the consummation by the Standby
Purchaser of the transactions herein contemplated and the compliance by
the Standby Purchaser with the terms hereof do not and will not conflict
with, or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Standby
Purchaser is a party or by which any of the Standby Purchaser’s properties
or assets are bound, or any applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Standby Purchaser or any
of the Standby Purchaser’s properties or assets; and no consent, approval,
authorization, order, registration or qualification of or with any such
government, governmental instrumentality or court, domestic or foreign, is
required for the valid authorization, execution, delivery and performance
by the Standby Purchaser of this Agreement or the consummation by the
Standby Purchaser of its obligations in connection with the transactions
contemplated by this Agreement that will not have been obtained prior to
the Closing.
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(viii)
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The
Standby Purchaser has not taken and will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
in order to facilitate the sale or resale of any securities of the
Company, and the Standby Purchaser is not aware of any such action taken
or to be taken by any person.
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5. Conditions. The
respective obligations of the Company to sell and the Standby Purchaser to
purchase Standby Shares as set forth in this Agreement are subject to the
following conditions:
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(a)
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No
order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued and no proceedings
for such purpose shall be pending before or, to the knowledge of the
Company or the Standby Purchaser, threatened by the SEC and any requests
for additional information by the SEC (to be included in the Registration
Statement, in the Prospectus or otherwise) shall have been complied
with.
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(b)
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The
representations and warranties of the Company and the Standby Purchaser
contained herein shall be true and correct as of the Closing Date, and the
Company and the Standby Purchaser shall each have performed all covenants
and agreements herein required to be performed on its part at or prior to
the Closing Date.
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(c)
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The
Company shall have conducted the Rights Offering substantially in the
manner described in the Registration
Statement.
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(d)
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There
shall not have occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its Subsidiaries, taken as a whole, from that set forth in the
Prospectus as of the date of this
Agreement.
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6. Termination.
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(a)
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The
Standby Purchaser may terminate this Agreement (i) upon the
occurrence of a suspension of trading in the Common Shares, the
establishment of limited or minimum prices for the Common Shares or a
general suspension of trading in or the establishment of limited or
minimum prices on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market, any banking moratorium in the United
States, any suspension of payments with respect to banks in the United
States or a declaration of war or national emergency in the United States,
(ii) prior to the expiration of the Offering, if the Company
experiences a material adverse change in its financial condition from its
financial condition at December 31, 2010 and (iii) if the Company
materially breaches the Standby Purchase Agreement, and such breach is not
cured within three (3) days.
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(b)
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In
the event (x) the Company, in its reasonable judgment, determines
that it is not in the best interests of the Company and its shareholders
to go forward with the Rights Offering or (y) consummation of the Rights
Offering is prohibited by law, rule or regulation and the Company
terminates the Rights Offering.
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(c)
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Either
of the parties hereto may terminate this Agreement if the transactions
contemplated hereby are not consummated by March 31, 2011, through no
fault of the terminating party. In addition, this Agreement shall
terminate upon mutual consent of the parties
hereto.
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(d)
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The
Company and the Standby Purchaser hereby agree that any termination of
this Agreement pursuant to Sections 7(a), (b) or (c) (other than
termination by one party in the event of a breach of this Agreement by the
other party or a misrepresentation of any of the statements made hereby by
the other party), shall be without liability of the Company or the Standby
Purchaser.
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7. Continuing
Provisions. The representations and warranties of the Company and the
Standby Purchaser set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date.
All of the covenants, agreements and obligations of each of the Company and the
Standby Purchaser required to be performed by the Closing Date shall have been
duly performed and complied with by the Closing Date unless such performance
shall have been waived in writing by the Company or the Standby Purchaser, as
the case may be. The respective representations, warranties, covenants,
agreements and obligations of the parties to this Agreement shall survive the
Closing Date.
8. Recapitalization.
Other than as disclosed in the Prospectus, prior to Closing, the Company shall
not split, combine, reclassify or repurchase any of its capital stock or declare
or pay any extraordinary dividends on any of its capital stock.
9. Miscellaneous. This
Agreement is made solely for the benefit of the Standby Purchaser and the
Company, and their respective successors and permitted assigns, and no other
person, partnership, association or corporation shall acquire or have any right
under or by virtue of this Agreement.
10. Assignment. The
Standby Purchaser intends to assign all or a portion of its purchase right
contemplated hereunder to an affiliate which will be under common control with
the Standby Purchaser and which in turn will make the investment. In
addition, the Standby Purchaser will have the right to assign a portion of the
purchase right contemplated hereunder to members of the Board of Directors of
the Company and to affiliates, employees or consultants of Xxxxxx Bay Partners,
LP. Such assignments will not relieve the Standby Purchaser of its
purchase obligations contemplated hereunder.
11. Entire
Agreement. This Agreement constitutes the entire agreement and
understanding between the Standby Purchaser and the Company, and supersedes all
prior agreements and understandings relating to the subject matter hereof. In
case any one or more of the provisions contained in this Agreement, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect under the laws of any jurisdiction, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way affected or
impaired thereby or under the laws of any other jurisdiction.
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12. Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, and all such counterparts together
constitute but one and the same instrument.
13. Amendments. This
Agreement may not be amended, modified or changed, in whole or in part, except
by an instrument in writing signed by the Company and the Standby
Purchaser.
14. Notices. Except as
otherwise provided in this Agreement, and unless otherwise notified by the
respective addressee, all notices and communications hereunder shall be in
writing and mailed or delivered or by facsimile or telephone if subsequently
confirmed in writing, to:
If to the Company:
Pittsburgh & West Virginia
Railroad
#0 Xxxx
Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxx Xxxxxxxx 00000
Attention:
Xxxxxx XxXxx, Secretary and Treasurer
Telephone: 000-000-0000
With a copy to:
Xxxxxxxx
& Xxxxx LLP
000 Xxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxxxx
Facsimile: 000-000-0000
If to the Standby
Purchaser:
Xxxxxx Bay Partners, LP
00 Xxxxxx Xxx.
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxx
Xxxxxx
Facsimile: 000-000-0000
16. Applicable Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws rules
thereof.
17. Business
Day. The term “business day” shall
mean a day on which banking institutions are open generally in New
York.
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IN WITNESS WHEREOF, and
intending to be legally bound hereby, each of the Standby Purchaser and the
Company has signed or caused to be signed its name as of the day and year first
above written.
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XXXXXX
BAY PARTNERS, LP
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By:
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Name:
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Xxxxx
Xxxxxx
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Title:
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President
– General Partner
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Agreed
and Accepted
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As
of the 15 day of February 0000
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XXXXXXXXXX
& XXXX XXXXXXXX RAILROAD
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By:
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Name:
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Title:
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