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EXHIBIT 10.20
LEASE SUPPLEMENT NO. 1
THIS LEASE SUPPLEMENT NO. 1 (this "Lease Supplement") dated as of
December 23, 1997, between ABN AMRO Bank N.V., a bank organized under the laws
of The Netherlands, not in its individual capacity but solely as lessor (the
"Lessor"), and Chase Brass & Copper Company, Inc., a Delaware corporation, as
lessee (the "Lessee").
WITNESSETH:
WHEREAS, the Lessor and the Lessee have entered into that certain
Master Lease, dated as of December 23, 1997 (the "Lease");
WHEREAS, the Participation Agreement and the Lease provide that on
each Closing Date, the Lessee shall deliver to the Lessor a Xxxx of Sale dated
such date by which the Lessee bargains, conveys, assigns, sets over, sells and
delivers to the Lessor, and the Lessor purchases and accepts from the Lessee,
the Equipment to be conveyed on such Closing Date, and said Xxxx of Sale has
been delivered by the Lessee and accepted by the Lessor on such Closing Date;
WHEREAS, the Lease provides for the execution and delivery of a Lease
Supplement substantially in the form hereof for the purpose of confirming the
acceptance and lease of such Equipment under the Lease as and when delivered by
the Lessor to the Lessee in accordance with the terms thereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions; Interpretation. For purposes of this
Lease Supplement, capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in Appendix 1 to the Lease and
the rules of interpretation set forth in Appendix 1 to the Lease shall apply to
this Lease Supplement.
SECTION 2. Equipment. The Equipment leased hereunder shall be
as set forth in the schedule attached hereto as Annex A.
TOTAL PROPERTY IMPROVEMENTS COST: $10,000,000.00
SECTION 3. Term. Effective upon the execution and delivery of
this Lease Supplement by the Lessor and the Lessee, the Property shall be
subject to the terms and provisions provided herein and in the Lease (which is
incorporated herein by reference). Subject to the terms and conditions of the
Lease, the Lessor hereby leases to the Lessee for the Term (as defined below)
of the Lease, the
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Lessor's interest in the Property, and the Lessee hereby agrees, expressly for
the direct benefit of the Lessor, to lease from the Lessor for the Term, the
Lessor's interest in the Property.
SECTION 4. Rent. From and after the date hereof, the Basic Rent
for said Equipment during the Basic Lease Term shall be payable on the dates
and in the amounts as more particularly set forth in Annex B attached hereto
and Article III of the Lease which is incorporated herein by reference.
SECTION 5. Lessee Confirmation. Lessee hereby confirms and
warrants to Lessor that the Equipment: (a) was duly delivered to Lessee on or
prior to the date hereof at the locations specified in Section 6 hereof; (b)
has been received, inspected and determined to be in compliance with all
applicable specifications and that the Equipment is hereby accepted for all
purposes of the Lease; and (c) is a part of the "Equipment" referred to in the
Lease and is taken subject to all terms and conditions therein and herein
provided.
SECTION 6. Location of Equipment. The locations of the
Equipment are specified on the Schedule of Equipment attached hereto as Annex
A.
SECTION 7. Financing Statements. Annex C attached hereto
specifies the location of all UCC financing statements or other similar
documents under applicable law covering the Equipment.
SECTION 8. Parties and Addresses. The Lease is dated as of
December 23, 1997, between the Lessor, whose principal office is at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 and the Lessee, whose principal office
is State Route 15N, 14212 Xxxxxx Xxxx X-00, Xxxxxxxxxx, Xxxx 00000.
SECTION 9. Lease Term. The term of this Lease (the "Term")
shall begin on December 23, 1997, and shall end on the third anniversary of the
applicable Closing Date, unless the Term is renewed or earlier terminated in
accordance with the provisions of the Lease. The Lease contains three
successive option periods of one year each, which give Lessee the right,
subject to the terms thereof, to extend the term of the Lease to the sixth
anniversary of the applicable Closing Date.
SECTION 10. Ownership of the Property. It is the intent of the
parties hereto that: (i) the Lease constitutes an "operating lease" pursuant to
Statement of Financial Accounting Standards No. 13, as amended, for purposes of
Lessee's financial reporting, and (ii) for purposes of Federal and state income
tax, the transaction contemplated hereby and by the Lease is a financing
arrangement and preserves ownership in the Property in the Lessee.
Nevertheless, the Lessee acknowledges and agrees that neither the Agent, the
Lessor nor any Participant has made any representations or warranties to the
Lessee concerning the tax, accounting or legal characteristics of the Operative
Documents and that the Lessee has obtained and relied upon such tax, accounting
and legal advice concerning the Operative Documents as it deems appropriate.
Anything to the contrary in the Operative Documents notwithstanding,
the Lessor and the Lessee intend and agree that with respect to the nature of
the transactions evidenced by the Lease, the
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Lease grants a security interest and mortgage or deed of trust or lien, as the
case may be, in the Property to the Lessor and the Participants to secure the
Lessee's performance under and payment of all amounts under the Lease and the
other Operative Documents.
Specifically, but without limiting the generality of subsection (b) of
this Section 10, the Lessor and the Lessee further intend and agree that (i)
the Lease shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code; (ii)
the possession by the Lessor or any of its agents of notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the Uniform
Commercial Code; and (iii) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from financial intermediaries,
bankers or agents (as applicable) of the Lessee shall be deemed to have been
given for the purpose of perfecting such security interest under Applicable
Law. The Lessor and the Lessee shall, to the extent consistent with the Lease,
take such actions and execute, deliver, file and record such other documents,
financing statements, mortgages and deeds of trust as may be necessary to
ensure that, if the Lease and this Lease Supplement were deemed to create a
security interest in the Property in accordance with this Section, such
security interest would be deemed to be a perfected security interest of first
priority under Applicable Law and will be maintained as such throughout the
Term.
SECTION 11. Remedies. Without limiting any other remedies set
forth in the Lease, in the event that a court of competent jurisdiction rules
that the Lease constitutes a mortgage, deed or trust or other secured financing
as is the intent of the parties, then the Lessor and the Lessee agree that (i)
the Lessee hereby grants a Lien against the Property WITH POWER OF SALE, and
that upon the occurrence of a Lease Event of Default, the Lessor shall have the
power and authority, to the extent provided by law, after proper notice and
lapse of such time as may be required by law, to sell the Property at the time
and place of sale fixed by the Lessor in said notice of sale, either as a
whole, or in separate lots or parcels or items and in such order as the Lessor
may elect, at auction to the highest bidder for cash in lawful money of the
United States payable at the time of sale; accordingly, it is acknowledged that
A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF SALE MAY ALLOW
THE LESSOR TO TAKE THE PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A
FORECLOSURE ACTION UPON DEFAULT BY THE LESSEE UNDER THIS INSTRUMENT, and (ii)
upon the occurrence of a Lease Event of Default, the Lessor, in lieu of or in
addition to exercising any power of sale hereinabove given, may proceed by a
suit or suits in equity or at law, whether for a foreclosure hereunder, or for
the sale of the Property, or against the Lessee on a recourse basis for the
Asset Termination Value, or for the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein
granted, or for the appointment of a receiver pending any foreclosure hereunder
or the sale of the Property, or for the enforcement of any other appropriate
legal or equitable remedy.
SECTION 12. Purchase Option. Sections 19 and 20 of the Lease
contain various purchase options which may be exercised by Lessee during the
term of the Lease subject to the terms and conditions of said Sections 19 and
20 of the Lease.
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SECTION 13. Liens.
NOTICE IS HEREBY GIVEN THAT NEITHER THE LESSOR, ANY PARTICIPANT NOR
THE AGENT IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED
OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY
PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANICS' OR OTHER LIENS
FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL HAVE SUPERIOR PRIORITY OR
RIGHTS THAN THE RIGHTS AND PRIORITIES OF THE INTEREST OF THE LESSOR IN AND TO
THE PROPERTY.
SECTION 14. Ratification. Except as specifically modified
hereby, the terms and provisions of the Lease are hereby ratified and confirmed
and remain in full force and effect.
SECTION 15. Original Lease Supplement. The single executed
original of this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL
EXECUTED COUNTERPART" on the signature page thereof and containing the receipt
of the Agent therefor on or following the signature page thereof shall be the
Original Executed Counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 16. GOVERNING LAW. THE LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT AS TO MATTERS RELATING TO
THE CREATION OF THE LEASEHOLD ESTATE THEREUNDER AND THE EXERCISE OF RIGHTS AND
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE EQUIPMENT IS LOCATED.
WITHOUT LIMITING THE FOREGOING, IN THE EVENT THAT THE LEASE IS DEEMED TO
CONSTITUTE A FINANCING, WHICH IS THE INTENTION OF THE PARTIES, THE LAW OF THE
STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN
THE CREATION, TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY, BUT
THE LIEN CREATED HEREBY AND THE ENFORCEMENT OF SAID LIEN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE EQUIPMENT IS
LOCATED.
SECTION 17. Counterpart Execution. This Lease Supplement may be
executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one and
the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of
the date and year first above written.
ABN AMRO BANK N.V., as Lessor
By: /s/ XXXXXXXXXXX X. XXXXXXX
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Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ XXXXX X. XxXXXXXX, XX.
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Name: Xxxxx X. XxXxxxxx, Xx.
Title: Vice President
CHASE BRASS & COPPER COMPANY, INC.,
a Delaware corporation, as Lessee
By: M.T. XXXXXXXXX
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Name: M.T. Xxxxxxxxx
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Title: CFO
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COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF ALLEGHENY )
Before me, the undersigned, a Notary Public within and for the State and County
aforesaid, personally appeared Xxxxxxxxxxx X. Xxxxxxx, with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and who, upon oath, acknowledged himself to be an Vice President of ABN AMRO
BANK N.V., the within named bargainor, a corporation, and that he as such Vice
President, being duly authorized so to do, executed the foregoing instrument
for the purposes therein contained by signing the name of the corporation by
himself as such Vice President.
WITNESS my hand and seal, at office, on this the 22nd day of December, 1997.
/s/ XXXXX X. XXXXXX
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Notary Public
My Commission Expires:
October 3, 1998
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COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF ALLEGHENY )
Before me, the undersigned, a Notary Public within and for the State and County
aforesaid, personally appeared Xxxxx X. XxXxxxxx, Xx., with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and who, upon oath, acknowledged himself to be an Vice President of ABN AMRO
BANK N.V., the within named bargainor, a corporation, and that he as such Vice
President, being duly authorized so to do, executed the foregoing instrument
for the purposes therein contained by signing the name of the corporation by
himself as such Vice President.
WITNESS my hand and seal, at office, on this the 22nd day of December, 1997.
/s/ XXXXX X. XXXXXX
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Notary Public
My Commission Expires:
October 3, 1998
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STATE OF OHIO )
) SS.:
COUNTY OF XXXXXXXX )
Before me, the undersigned, a Notary Public in and for the State and County
aforesaid, personally appeared M.T. Xxxxxxxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself to be the CFO of CHASE BRASS & COPPER COMPANY,
INC., the within named bargainor, a corporation, and that he as such CFO, being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the corporation by himself as such
CFO.
WITNESS my hand and seal, at office, on this the 22 day of December, 1997.
/s/ XXXX X. XXXXXXXX
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Notary Public
My Commission Expires:
October 3, 2000
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