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EFH Merger Agreement Amended

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Energy Future Holdings filed with the U.S. Bankruptcy Court an amended and superseding motion of the E-Side Debtors for an order authorizing its entry into a merger agreement with Sempra Energy and Power Play Merger Sub I and approving the termination fee and authorizing entry into and performance under the plan support agreement.

The motion notes, “On August 15, 2017, the E-Side Debtors received an alternative proposal from Sempra that largely preserved the structure of the transaction contemplated by the BHE Merger Agreement, but which contemplated a purchase price of $9.3 billion. Following several days of discussions and negotiations, Sempra, among other things, (a) increased the purchase price by another $150 million, to $9.45 billion (representing an overall $450 million increase in purchase price as compared to the BHE Merger Agreement); (b) agreed to certain Oncor dividend relief that increases the distributable value to EFIH unsecured creditors, regardless of whether the Effective Date occurs before or after payment of such dividend; (c) improved other terms, including terms related to the size and ‘when payable’ terms of the Termination Fee; and (d) perhaps most significantly, obtained a commitment from Elliott Capital Management to support and not object to the Merger Agreement, as memorialized in the PSA executed between Sempra, the E-Side Debtors, and Elliott, thereby eliminating costly and uncertain litigation.”

In addition, “This Dividend is expected to be paid in February 2018, in the amount of approximately $52 million. The Termination Fee is reduced to $190 million (from $270 million in the BHE Merger Agreement) and will be payable only upon consummation of an alternative transaction if the Merger Agreement is terminated due to EFH Corp. or EFIH (a) breaching the Merger Agreement; (b) exercising each of their respective fiduciary out rights; or (c) supporting an inconsistent plan or inconsistent other restructuring transaction.”

The Court scheduled a September 6, 2017 hearing to consider the amendment, with objections due by August 31, 2017.

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