| Item 1.01 | Entry Into a Material Definitive Agreement. |
The information regarding the execution of the LLC Agreement (as defined below) contained in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On March 1, 2024, Vistra Corp., a Delaware corporation (“Vistra”), completed its previously announced transaction pursuant to that certain Transaction Agreement dated as of March 6, 2023 (the “Transaction Agreement”), by and among Vistra Operations Company, LLC, a Delaware limited liability company (“Parent”) and an indirect wholly owned subsidiary of Vistra, Black Pen Inc., a Delaware corporation (“Merger Sub”) and an indirect wholly-owned subsidiary of Parent, and Energy Harbor Corp., a Delaware corporation (“Energy Harbor”), pursuant to which, among other things, Merger Sub merged with and into Energy Harbor (the “Merger”), with Energy Harbor continuing as the surviving entity following the completion of the Merger (the “Surviving Corporation”).
Subject to the terms and conditions of the Transaction Agreement, prior to the consummation of the Merger, Parent caused certain of its subsidiaries to transfer certain of its subsidiary entities, including Merger Sub, to Vistra Vision LLC, a newly formed Delaware limited liability company and then indirect wholly-owned subsidiary of Parent (“Vistra Vision”). At the effective time of the Merger, Energy Harbor, as the Surviving Corporation, became a wholly-owned subsidiary of Vistra Vision.
Concurrently with the execution of the Transaction Agreement, on March 6, 2023, Parent entered into contribution and exchange agreements (as amended and restated, the “Contribution and Exchange Agreements”) with affiliates of Nuveen Asset Management, LLC and Avenue Capital Management II, L.P. (the “Rollover Holders”), pursuant to which, upon the terms and subject to the conditions thereof, the Rollover Holders agreed to exchange, prior to the effective time of the Merger, a portion of their shares of common stock, par value $0.001 per share, of Energy Harbor (the “Rollover Shares”) into direct or indirect equity interests of Vistra Vision.
The payment of the Aggregate Cash Consideration Value (as defined in the Transaction Agreement) plus certain Company Transaction Expenses (as defined in the Transaction Agreement) payable by Parent was funded by Parent and certain of its subsidiaries using a combination of cash on hand and borrowings under certain of Parent’s existing credit facilities and accounts receivable financing facilities.
Also on March 1, 2024, Vistra Vision Holdings I LLC, an indirect wholly-owned subsidiary of Parent (“Vistra Member”), Vistra Vision Management, an indirect wholly-owned subsidiary of Parent (the “Managing Member”), and, directly or indirectly, the Rollover Holders (the Rollover Holders, collectively, the “Class B Members”) entered into that certain Amended and Restated Limited Liability Company Agreement of Vistra Vision (the “LLC Agreement”). Pursuant to the LLC Agreement, Vistra Vision will own, manage, operate, sell, lease and transfer, directly or indirectly through subsidiaries, the assets acquired by Vistra Vision pursuant to the Transaction Agreement and other non-thermal assets and businesses acquired or developed by Vistra Vision thereafter.
Initially upon execution of the LLC Agreement, Vistra Member holds 85% of the equity interests in Vistra Vision in the form of Class A units of Vistra Vision, and the Class B Members collectively hold 15% of the equity interests in Vistra Vision in the form of Class B units of Vistra Vision. The Managing Member shall have the power to cause Vistra Vision to issue new limited liability company interests from time-to-time, provided that the Vistra Member and the Class B Members shall have preemptive rights to purchase their pro rata share of any such new interests on the terms and conditions set forth in the LLC Agreement, subject to certain customary exceptions.
Vistra Vision will be managed by the Managing Member (which will not hold an economic interest in Vistra Vision), subject to certain limited consent rights of the Class B Members (so long as they hold specified percentages of Vistra Vision equity interest) as set forth in the LLC Agreement, including certain restrictions on actions such as (i) amending the LLC Agreement or Vistra Vision’s distribution policies, (ii) changing Vistra Vision’s organizational structure or tax classification, (iii) entering into or amending related party transactions, (iv) acquiring or divesting material operating businesses or assets, (v) effecting non-pro rata redemptions or repurchases of equity interests, (vi) incurring material indebtedness or (vii) voluntarily commencing certain activities related to the bankruptcy or dissolution of Vistra Vision, in each case, subject to certain qualifiers and exceptions as set forth in the LLC Agreement. The Class A Members (initially consisting of the Vistra Member) will have the right to appoint and remove the Managing Member and designate any successor Managing Member.
The LLC Agreement contains certain restrictions on transfers of units and provides for a right of first offer in favor of the Vistra Member in certain circumstances if a Class B Member desires to transfer any of its units. The LLC Agreement also provides for customary drag-along and tag-along rights.
The foregoing descriptions of the Transaction Agreement, the Contribution and Exchange Agreements and the LLC Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which, in the case of the Transaction Agreement and the Contribution and Exchange Agreements, are incorporated herein by reference to Exhibit 2.1 and
