Item 1.01 Entry into a Material Definitive Agreement
On
• An equity purchase agreement withParkway Generation, LLC ("PJM Purchaser") andEastern Corridor PartsCo, LLC for the sale of all of PSEG Seller's fossil fuel electric generating assets located inNew Jersey andMaryland (the "PJM Agreement"); and • An equity purchase agreement withGeneration Bridge II, LLC ("NY/CT Purchaser" and, together with PJM Purchaser, the "Purchasers") andEastern Corridor PartsCo, LLC for the sale of all of PSEG Seller's fossil fuel electric generating assets located inNew York andConnecticut (the "NY/CT Agreement" and, together with the PJM Agreement, the "Purchase Agreements" and such transactions, collectively, the "Transactions" and individually, a "Transaction"). Each Purchaser is a newly formed subsidiary ofArcLight Energy Partners Fund VII, L.P. , a fund controlled byArcLight Capital Partners, LLC . In the Transactions, PSEG Seller will receive aggregate cash consideration of approximately$1.92 billion , subject to customary adjustments, as well as certain non-cash benefits such as retention of contractual rights to make use of certain facilities for potential future offshore wind development projects. The Transactions are currently expected to be completed either
late
in the fourth quarter of 2021 or the first quarter of 2022.
The closing of the Transactions are subject to the satisfaction or waiver of
certain conditions set forth in the Purchase Agreements, including (i) the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvement Acts of 1976 (as amended), (ii) receipt
of applicable regulatory approvals, including
a
s requirements relating to seeking requisite regulatory approvals and certain third-party consents. The representations and warranties in the Purchase Agreement will not survive the closing, and the Purchasers have obtained third-party representation and warranty insurance policies. Each of PSEG Seller, on one hand and the Purchasers, on the other hand, has agreed to indemnify the other for certain losses arising out of retained liabilities or assumed liabilities and the operation of the Portfolio following the closing of the applicable Transactions, subject to certain limitations. Each Purchase Agreement may be terminated under the following circumstances: (i) by the mutual consent of PSEG Seller and the applicable Purchaser, (ii) by either PSEG Seller or the applicable Purchaser, if the closing does not occur byAugust 12, 2022 , (iii) by either PSEG Seller or the applicable Purchaser, if the other party materially breaches its representations or fails to perform its covenants such that the conditions to closing fail to be satisfied (subject to a cure period), (iv) by either PSEG Seller or the applicable Purchaser, if there is a final and non-appealable order prohibiting the closing of the applicable Transaction, (v) by PSEG Seller, if the closing conditions applicable to the Purchasers have been satisfied or waived, PSEG Seller has irrevocably notified such Purchaser in writing at least two business days prior to such termination that PSEG Seller is ready, willing and able to consummate the closing and the applicable Purchaser has failed to consummate the closing within two business days after the giving of such notice by PSEG Seller, and (vi) by either PSEG Seller or the applicable Purchaser, if the aggregate restoration costs with respect to one or more events of loss exceeds certain thresholds set out in the Purchase Agreements. The Purchasers intend to fund each Transaction with a mix of equity and debt financing. Neither Transaction is subject to a financing condition. In the event that a Purchase Agreement is terminated due to the applicable -2-
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Purchaser's breach of such Purchase Agreement for failure to consummate the
Transaction under certain circumstances, PSEG Seller will be entitled to a
termination fee equal to
Item 2.06 Material Impairments
In connection with the Transactions discussed above in Item 1.01, beginning in
the third quarter of 2021, the assets and liabilities of
Item 8.01 Other Events Press Release OnAugust 12, 2021 , PSEG issued a press release announcing the Transactions. A copy of the press release is filed as Exhibit 99.1 to this Form 8-K and incorporated by reference herein. Cautionary Statement Regarding Forward-Looking Statements This Current Report on Form 8-K includes "forward-looking statements" that are subject to risks, contingencies or uncertainties. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "proposition," "prospective," "pursue," "seek," "should," "strategy," "target," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. PSEG's forward-looking statements are not -3-
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guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that PSEG cannot predict. Material differences between actual results and any future performance suggested in PSEG's forward-looking statements could result from a variety of factors, such as the ongoing COVID-19 pandemic and its impact on global economic conditions and PSEG's ability to successfully complete the Transactions within the expected timeframe or at all. Many of such factors are beyond PSEG's control. These factors also include such risks and uncertainties detailed in PSEG's periodic public filings with theSEC , including but not limited to those discussed under "Risk Factors" in PSEG's annual report on Form 10-K for the year endedDecember 31, 2020 and its quarterly Form 10-Q filings, and in other investor communications from time to time. PSEG undertakes no obligation to update any forward-looking statement except to the extent required by applicable law.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following materials are attached as exhibits to this Current Report on Form 8-K: Exhibit 10.1 Equity Purchase Agreement datedAugust 12, 2021 , by and betweenPSEG Power LLC ,Generation Bridge II, LLC , andEastern Corridor PartsCo, LLC .* Exhibit 10.2 Equity Purchase Agreement datedAugust 12, 2021 , by and betweenPSEG Power LLC ,Parkway Generation, LLC , andEastern Corridor PartsCo, LLC .* Exhibit 99.1 Press Release relating to the Transactions, datedAugust 12, 2021 . Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). * Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to theU.S. Securities and Exchange Commission upon request. -4-
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