UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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Item 1.01. Entry into a Material Definitive Agreement
On March 12, 2024, Solar Technology LLC (“ST”), a wholly-owned subsidiary of Corning Incorporated (the “Company”) entered into certain agreements related to the construction and leasing of a planned manufacturing facility in Hemlock, Michigan (the “Facility” together with the site ground leasehold interest, the “Leased Property”). Among others, those agreements included (collectively, the “Transaction Documents”):
| 1. | A Transaction Agreement (the “Transaction Agreement”) among ST, as Lessee and Construction Agent, BA Leasing BSC, LLC, as Lessor (“BAL”), Bank of America, N.A., not in its individual capacity, except as expressly stated therein, but solely as Administrative Agent (“BofA”), and the persons named on Schedule II thereto, as “Participant Interest Parties”; |
| 2. | a Construction Agency Agreement (the “Construction Agency Agreement”) between ST and BAL; and |
| 3. | a Lease, Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Lease”) between ST and BAL. |
Cost of construction of the Facility is expected not to exceed $835 million. ST’s obligations under the Transaction Documents will be guaranteed by a Company Guaranty (the “Guaranty”). The Facility will be constructed on property owned by DC HSC Holdings LLC, another wholly-owned subsidiary of the Company, which will be leased to BAL under a long-term ground lease.
Pursuant to the Construction Agency Agreement, ST will act as the Construction Agent for BAL in connection with the design, construction and development of the Facility. Construction is expected to be completed approximately 26 months following the commencement of construction.
Construction advances will be made monthly to ST as Construction Agent for the Facility, and interest will be paid to the Participant Interest Parties by capitalizing accrued interest into the lease balance. After construction is completed, ST will lease the Facility from BAL for a term of approximately five years (the “Term”) and rent paid by ST will be passed directly through to the Participant Interest Parties in the form of interest and principal. In addition, ST will pay all operating costs (including taxes, insurance and utility costs) and all costs of repairs to the Facility.
Under the Lease, ST may, on any payment date during the Term occurring after the second anniversary of the Base Term Commencement Date, and with not less than 30 days’ notice, elect to purchase the Leased Property for an amount approximately equal to the sum required to repay the amount of the Participants Interest Parties’ investment in the Facility and any accrued but unpaid rent.
If ST is not in default under the Lease, at least 120 days prior to the end of the Term, ST must elect to do one of the following:
(a) extend the Lease for an additional five years with the consent of BAL and the other Participant Interest Parties; (b) purchase the Facility; or (c) arrange a sale of the Facility to a third party.
The Transaction Documents contain financial and operating covenants substantially similar to the covenants set forth in the Credit Agreement, dated June 6, 2022, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other financial institutions party thereto. The Lease also includes certain early termination events relating to the occurrence of certain material events of loss or material environmental events relating to the Facility.
Copies of the Transaction Agreement, Construction Agency Agreement, Lease, and Guaranty are attached hereto. The foregoing descriptions of these agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed as part of this Current Report on Form 8-K:
Exhibit Number Description
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CORNING INCORPORATED Registrant | ||
Date: March 15, 2024 |
By | /s/ Edward A. Schlesinger |
| Edward A. Schlesinger | ||
| Executive Vice President and Chief Financial Officer | ||