Spark Energy, Inc. (NASDAQ:SPKE) Files An 8-K Entry into a Material Definitive Agreement
Item 2.03 Entry into a Material Definitive Agreement.

As previously disclosed in “Item 5. – Other Information” in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 of Spark Energy, Inc., a Delaware corporation (the “Company”), the Company and CenStar Energy Corp., a New York corporation and a subsidiary of the Company (“CenStar”), entered into the Membership Interest and Stock Purchase Agreement, dated as of May 5, 2017, by and among the Company, CenStar and Verde USA Holdings, LLC, a Delaware limited liability company (the “Seller”), to which CenStar would acquire all of the membership interests and stock in the Verde Companies (as defined therein) (the “Original Purchase Agreement”).

On July 1, 2017, the Company, CenStar and the Seller entered into the First Amendment to the Membership Interest and Stock Purchase Agreement (the “First Amendment”). The First Amendment amends the Original Purchase Agreement (the Original Purchase Agreement, as amended by the First Amendment, the “Purchase Agreement”), to change certain defined terms. The foregoing description of the First Amendment is qualified by reference to the full text of the First Amendment, which is attached hereto as Exhibit 2.1 and incorporated by reference into this Item 2.03.

Additionally, on July 1, 2017 and as described below, CenStar issued the Promissory Note to the Seller. The description of the Promissory Note set forth in Item 2.03 below is incorporated by reference into this Item 2.03.

Item 2.03 Completion of Acquisition or Disposition of Assets.

On July 1, 2017, the Company and CenStar completed the acquisition from the Seller (the “Acquisition”) of all of the membership interests and stock in each of the Verde Companies to the Purchase Agreement. Total consideration paid at the closing of the Acquisition was approximately $85.8 million, of which approximately $21.0 million was used to purchase positive net working capital. The Company funded the closing consideration through: (i) approximately $6.8 million of cash on hand, (ii) approximately $15.0 million in subordinated debt from the Company's founder and majority shareholder through an existing subordinated debt facility, (iii) approximately $44.0 million in borrowings under its senior secured revolving credit facility, and (iv) the issuance by CenStar to the Seller of a promissory note in the aggregate principal amount of $20.0 million (the “Promissory Note”). In addition to the consideration paid at closing, CenStar is obligated to pay 50% of the Adjusted EBITDA earned by the Verde Companies for the 18 months following closing that exceeds certain thresholds, subject to the Verde Companies’ ability to achieve defined customer count criteria.

The Promissory Note, effective July 1, 2017, matures in eighteen months and bears interest at a rate of 5% per annum. Principal and interest are payable monthly on the first day of each month in which the Promissory Note is outstanding, beginning August 1, 2017. CenStar will deposit a portion of each payment under the Promissory Note into an escrow account, which serves as security for certain indemnification claims and obligations under the Purchase Agreement. All principal and interest payable under the Promissory Note is accelerated upon the occurrence of certain events of default, including the failure to pay any principal or interest when due under the Promissory Note. The foregoing description of the Promissory Note is qualified by reference to the full text of the Promissory Note, which is attached hereto as Exhibit 10.1 and incorporated by reference into this Item 2.03.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Promissory Note and the borrowings under the Company’s senior secured revolving credit facility set forth in Item 2.03 above are incorporated by reference into this Item 2.03.

Item 2.03 Regulation FD Disclosure.

On July 5, 2017, the Company issued a press release announcing the closing of the Acquisition, a copy of which is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 2.03.

The information in this Item 2.03, including Exhibit 99.1, is being “furnished” and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section18 of the Exchange Act, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as set forth by specific reference in such filing.

Item 2.03 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The Company will file any financial statements required by this Item not later than 71 days after the date on which this Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The Company will file any financial statements required by this Item not later than 71 days after the date on which this Form 8-K is required to be filed.

(d) Exhibits.

Spark Energy, Inc. Exhibit
EX-2.1 2 exhibit21.htm EXHIBIT 2.1 AMENDMENT TO MEMBERSHIP INTEREST AND STOCK PURCHASE AGREEMENT Exhibit Exhibit 2.1Execution VersionFIRST AMENDMENT TO THEMEMBERSHIP INTEREST AND STOCK PURCHASE AGREEMENTThis First Amendment to the Membership Interest and Stock Purchase Agreement,…
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About Spark Energy, Inc. (NASDAQ:SPKE)

Spark Energy, Inc. is an independent retail energy services company. The Company provides residential and commercial customers in United States with an alternative for their natural gas and electricity. The Company operates in two segments: Retail Natural Gas Segment and Retail Electricity Segment. It operates in approximately 50 utility service territories across over 20 states and has approximately 328,000 residential customers and over 19,000 commercial customers, which translates to approximately 415,000 renewable energy credits (RCEs). The Company serves natural gas customers in over 10 states, including Arizona, California, Colorado, Connecticut, Florida, Illinois, Indiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio and Pennsylvania, and electricity customers in over nine states, including Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania and Texas.