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Purchase Price, Identity Of Customer Book Acquired By Spark Energy Revealed

October 24, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Note: This story was first published at 12:20 pm on Oct. 25 with an alert to our email subscribers

Spark Energy in an 8-K disclosed the seller and price of its previously reported recent book purchase of 60,000 RCEs

On October 19, 2018, Spark Energy, Inc.’s wholly–owned subsidiary Spark HoldCo, LLC (“HoldCo”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Starion Energy Inc. (“Starion Energy”), Starion Energy NY Inc. (“Starion NY”), and Starion Energy PA Inc. (“Starion PA”) (collectively, Starion Energy, Starion NY and Starion PA, “Starion”) and certain of Starion’s shareholders (the “Shareholders”) (the Shareholders and Starion, the “Seller”), to purchase a portfolio of approximately 60,000 residential RCEs in six (6) states in the New England, Mid-Atlantic and Midwest regions.

The aggregate purchase price to be paid by HoldCo to Starion under the Purchase Agreement is up to $10.7 million depending on the actual number of customers transferred and that remain on flow for thirty (30) days from the date of transfer.

Simultaneously upon execution of the Purchase Agreement, HoldCo, Starion, on behalf of itself and its affiliates, and the escrow agent entered into an Escrow Agreement, whereby HoldCo deposited the total amount of the purchase price from cash-on hand into escrow for the benefit of Starion. The release of the purchase price from escrow on a per-RCE basis to Starion will be in accordance with the terms and conditions in the Purchase Agreement. In addition to the Purchase Agreement, a Non-Solicitation Agreement was also entered into between HoldCo, Starion and the Shareholders, effective October 19, 2018, where for a period of five (5) years following the last purchase price payment released to Starion, Seller agreed that they will not solicit or attempt to cancel, renew or terminate any customer or customer contract purchased by HoldCo under the Purchase Agreement. Further, the Non-Solicitation Agreement provides for a reimbursement obligation in the event Seller solicits any such customers or customer contracts. Also executed simultaneously with the Purchase Agreement, HoldCo and Starion have entered into a Right of First Offer Agreement (“ROFO”), which provides that HoldCo will be given an advance 30-day notice period to make an exclusive offer on any subsequent sale of customer contracts by Starion to a non-affiliate, for a period of three (3) years. The Purchase Agreement includes standard representations and warranties from all parties and indemnifications for breaches of such representations by HoldCo on the one hand and by Starion and the Seller on the other hand. The Purchase Agreement also provided for $1.0 million of the aggregate purchase price paid by HoldCo to continue to be held in escrow for one (1) year following the last purchase price payment released from escrow to Starion, as security for any breach of the Non-Solicitation Agreement by Seller and to cover Starion’s indemnity obligations.

"We expect customers to begin transferring to Spark brands as early as November 2018," Spark said in the 8-K

A copy of the asset purchase agreement was included in the 8-K available here

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