AMPCO PITTSBURGH CORP: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (Form 8-K)

Item 1.01. Conclusion of a significant definitive agreement.

Sale and leaseback of real estate

On August 30, 2022, Air and Liquid Systems Society (“ALS”), a wholly owned subsidiary of Ampco-Pittsburgh Corporation (“Ampco”), and Store Capital Acquisitions, LLC (the “Buyer”) entered into a sale-leaseback transaction, valued at approximately $15,500,000pursuant to which Buyer purchased from ALS certain of ALS’ properties, including manufacturing facilities located at Lynchburg, Virginia and Amherst, Virginia (collectively, the “ALS Facilities”).

As part of the sale-leaseback transaction, Union Electric Steel Corporation (“UES” or the “Lessee”) and Buyer have entered into an Amended and Restated Master Lease Agreement (the “Updated Lease”), dated August 30, 2022
(the “Effective Date”), which amended and restated the existing Master Lease Agreement between the parties, dated September 28, 2018 (the “Initial Lease”). Pursuant to the updated Lease, the Lessee shall lease the ALS Facilities and the facilities subject to the original Lease from the Purchaser (together with the ALS Facilities, the “Facilities”), subject to the terms and conditions of the updated Lease. up to date. The Updated Lease provides for a term of 20 years (the “Primary Term”), commencing on the Effective Date and expiring on August 31, 2042. The Updated Lease provides the Lessee with the option to extend the Principal Term for four separate Renewal Terms of approximately five years each (each a “Renewal Term”). If the lessee exercises each renewal term, the updated lease will expire on August 31, 2062. Lessee is required to give Buyer written notice no later than 120 days prior to the end of the current Main Period or Renewal Period, as applicable, if Lessee wishes to exercise its right to extend such period.

Subject to any adjustments set forth in the revised lease, the combined minimum annual rent payable to the purchaser during the principal term and the first and second renewal terms is an amount equal to $2,939,139 (the “Basic Annual Rent”), payable in equal monthly installments. On October 1, 2022 and on each anniversary of that date before the third and fourth renewal periods, the base annual rent shall increase by the lesser of: (a) two and two hundredths percent or (b) 1.25 times the change in the index of price (as defined in the restated lease). During the third and fourth renewal periods, the base annual rent will be the fair market rent (as defined in the updated lease), which will be determined, generally, by reference to the then-current annual rents charged for comparable facilities in the markets in which the facilities are located, otherwise in accordance with the terms and conditions of the updated lease.

The Updated Lease contains certain representations, warranties, covenants, obligations, conditions, indemnification provisions and termination provisions customary for sale and leaseback transactions.

Pursuant to the terms and conditions of the updated lease, the lessee has the option of repurchasing all facilities included in the updated lease by giving written notice to the buyer no later than 45 days before the tenth anniversary of the date of effective for a price equal to the greater of: (a) 115% of the lessor’s total investment or (b) fair market value (each as defined in the updated lease).

In connection with the execution of the Restated Lease, UES and the Purchaser have entered into this Disbursement Agreement dated August 30, 2022 (the “Disbursement Agreement”), pursuant to which the Purchaser has agreed to provide up to
$2.5 million to UES for the construction of improvements and related costs to the property commonly referred to as 825 Bell Avenue, Carnegie, Pennsylvania 15106. The base annual rent under the revised lease includes UES’ obligations to repay the amount advanced under the disbursement agreement, and such repayment will be amortized over the principal term and is secured by the improvements. The initial amortization rate is eight and twenty-five hundredths percent, a rate that begins to fluctuate on January 1, 2023 at the greater of: (a) eight and twenty-five hundredths percent or (b) five and twenty-four hundredths percent above the fifteen-year swap rate (as defined and determined by the disbursement agreement ). The Disbursement Agreement contains certain representations, warranties, covenants, obligations, conditions, indemnification provisions and termination provisions customary for construction finance agreements. Pursuant to a security waiver agreement, the banks of the Company’s revolving credit facility have subordinated their security interest in these improvements to the buyer’s participation in the improvements.

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In consideration of, and as an inducement to, Buyer’s agreement to enter into the updated Lease described above, Ampco has entered into an unconditional payment and performance guarantee with Buyer (the “Guarantee”) , whereby Ampco has guaranteed the payment in full by the Tenant of all rents and other amounts and charges to be paid by the Tenant under the Lease, and the full performance by the Tenant of all other obligations of the Tenant to be performed under of the updated Lease.

The foregoing descriptions of the Updated Lease and Guarantee do not purport to be a complete description of the rights and obligations of the parties under the Lease and Guarantee. The above descriptions are qualified in their entirety by reference to the complete updated Lease and Warranty, copies of which are filed herewith.

Sublease agreement

In connection with the sale-leaseback transaction and the execution of the revised lease, ALS and UES entered into a sublease agreement dated August 30, 2022 (the “Sublease”), pursuant to which ALS will sublease the ALS Facilities to the Lessee on an absolute net basis. Under the sublease agreement, ALS assumes and indemnifies the lessee for all financial obligations under the revised lease, including base rent, additional rent, and all maintenance, repair and replacement obligations that ensue with respect to ALS facilities.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under a

           Off-Balance Sheet Arrangement of a Registrant.


To the extent practicable, information included in Section 1.01 under the heading “Sale and Leaseback of Real Estate” is incorporated by reference into this Section 2.03.

Item 9.01 Financial statements and supporting documents.


  (d) Exhibits.



Exhibit 10.1†   -     Amended and Restated Master Lease Agreement between Union
                    Electric Steel Corporation and Store Capital Acquisitions, LLC,
                    dated August 30, 2022, filed herewith.

Exhibit 10.2† – Amended and Updated Unconditional Payment Guarantee and

                    Performance between Ampco-Pittsburgh Corporation and Store
                    Capital Acquisitions, LLC, dated August 30, 2022, filed herewith.


Exhibit 104     -   Cover Page Interactive Data File (embedded within the Inline XBRL
                    document)


† Certain exhibits and attachments have been omitted pursuant to Section 601(a)(5) of the

SK Regulations and will be provided to Security and Exchange Commission

on demand.

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