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FirstEnergy Solutions – Asset Sale Procedures Approved

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August 3, 2018 – The Court hearing the FirstEnergy Solutions’ case has approved the Debtors’ Sale Motion [Docket No. 1098]. As previously reported [Docket No. 908], “After extensive deliberations with the advisors and separate negotiations with the potential bidders that participated in the second stage of the process, FES has elected to proceed with the bid submitted by Exelon Generation Company, LLC (the ‘Stalking Horse Purchaser’) as the highest or otherwise best bid received for the Retail Power Sales Assets, subject to the Debtors’ receipt of any higher or otherwise better bids at an Auction proposed to be held on September 6, 2018….FES and the Stalking Horse Purchaser negotiated an asset purchase agreement (the ‘Stalking Horse Agreement’)…which represents a binding bid for the Retail Power Sales Assets. The total consideration to be realized by FES is approximately $140,000,000, subject to certain adjustments set forth in the Stalking Horse Agreement….The Stalking Horse Agreement contains additional bid protections; namely, the provision of a break-up fee in the amount of 3% of the Base Price (the ‘Termination Fee’) and an expense reimbursement of up to 1% of the Base Price (the ‘Buyer Expense Reimbursement’ and collectively with the Termination Fee, the ‘Bid Protections’), which would be payable in the event that a higher or otherwise better competing bid in respect of the Retail Power Sales Assets is consummated and under certain other limited circumstances. The Bid Procedures also contemplate an Initial Topping Bid of $146,600,000 and that subsequent overbids shall be in the minimum amount of $1,000,000.” The order approves the following general timeline: (i) an August 23, 2018 deadline for submitting qualified competing bids and (ii) an auction, if necessary, to be held on September 6, 2018.

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