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AZURE MIDSTREAM PARTNERS, LP filed this Form 8-K on 03/21/2017
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Item 1.01                  Entry into a Material Definitive Agreement.


On March 10, 2017, in accordance with the bid procedures order of the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”), Azure Midstream Partners, LP (the “Partnership”) together with certain direct and indirect subsidiaries (collectively, “Sellers”) and their counsel and advisors, in consultation with representatives of the Partnership’s secured lenders, held an auction in connection with the sale of substantially all of the Seller’s assets. After multiple rounds of bidding, BTA Gathering LLC, (“Buyer”), a wholly owned subsidiary of Enterprise Products Operating LLC, (the “Guarantor”), was declared to have won the auction by presenting the highest or otherwise best offer for such assets. Subsequently, Sellers and Buyer executed a purchase and sale agreement (“PSA”) on March 15, 2017.  The PSA was accepted by the Bankruptcy Court and incorporated into the Court’s sale order issued on March 15, 2017. Pursuant to the terms of the PSA, Sellers agreed to sell substantially all of their assets to Buyer for $189.0 million in cash, subject to certain customary purchase price adjustments.


The PSA was substantially similar to the previously executed “stalking horse” purchase and sale agreement (the “M5 Agreement”) among Sellers and M5 Midstream LLC (“M5”), which was filed as an exhibit to the Partnership’s Report on Form 8-K filed on February 15, 2017 (the “M5 Form 8-K”), with the following material differences:


·                  the purchase price was increased to $189.0 million in the PSA, from $151.1 million in the M5 Agreement; of the higher purchase price, approximately $5.5 million will be paid to M5 as a break-up fee and expense reimbursement in connection with the termination of the M5 Agreement;

·                  the $3.7 million reduction in the purchase price under the M5 Agreement, in the event that the so-called “BP Partial Assignment” was not obtained by closing, was deleted from the PSA; and

·                  Section 2.6 regarding the BP Preferential Purchase Right was revised to reduce the “Preferential Right Amount” from $23.0 million to $5.0 million.


Buyer deposited $16.0 million with an escrow agent, to be applied to the Purchase Price at closing. In the event that the closing does not occur, the deposit will be paid to Sellers in certain cases and to Buyer in other cases. The PSA contains customary representations, warranties, covenants and conditions. Sellers and Buyer anticipate the closing of the transactions contemplated under the PSA to occur within three business days after the satisfaction or waiver of Buyer’s and Sellers’ conditions to closing, which is expected to occur prior to May 1, 2017.


The PSA may be terminated, subject to certain exceptions: (i) upon mutual written consent of the parties; (ii) in the event of a final and non-appealable order by a governmental authority prohibiting the consummation of the transactions contemplated under the PSA; (iii) if the sale order is vacated, modified or supplemented in a manner that is material and adverse to either Sellers or Buyer; (iv) if the closing has not occurred on or prior to May 1, 2017; (v) if Sellers’ bankruptcy cases are converted to Chapter 7 cases, dismissed, or a trustee is appointed under Chapter 11; (vi) in the event of certain material breaches by a party of representations and warranties or covenants that remain uncured; and (vii) if an alternative transaction is consummated.


As part of the Court’s sale order on March 15, 2017 the Court declared the M5 Agreement, as modified to reflect a higher purchase price of $188.0 million, to be the back-up bid as specified in the bid procedures order.


The summary of the PSA and the M5 Agreement set forth above does not purport to be complete and is qualified in its entirety by reference to the PSA and the M5 Agreement, respectively, which are filed as Exhibit 10.1 hereto and Exhibit 10.1 to the M5 Form 8-K, respectively, and incorporated herein by reference.


Cautionary Note Regarding Forward-Looking Statements.


This Current Report on Form 8-K includes “forward-looking statements.” All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as “will,” “would,” “should,” “could,” “expect,” “anticipate,” “plan,” “project,” “intend,” “estimate,” “believe,” “target,” “continue,” “potential,” the negative of such terms or other comparable terminology are intended to identify forward-looking statements.  These statements include, but are not limited to, statements about financial restructuring or strategic alternatives and the Partnership’s expectations of plans, goals, strategies (including measures to implement strategies), objectives and anticipated results with respect thereto.  These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances, but such assumptions may prove to be inaccurate. Such statements are also subject to a number of risks and uncertainties, many of which are beyond the control of the Partnership, which may cause the Partnership’s actual results to differ materially from those implied or expressed by the forward-looking statements.  These include risks and uncertainties relating to, among other things: the ability to confirm and consummate a plan of reorganization; the bankruptcy process, including the effects thereof on Partnership’s business and on the interests of various



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