Exhibit 10.1

 

Execution Version

 

COMMON UNIT PURCHASE AGREEMENT

 

by and among

 

CROSSTEX ENERGY, L.P.

 

and

 

THE PURCHASERS PARTY HERETO

 

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Table of Contents

 

ARTICLE I DEFINITIONS

1

 

 

 

Section 1.01

Definitions

1

Section 1.02

Accounting Procedures and Interpretation

5

 

 

 

ARTICLE II AGREEMENT TO SELL AND PURCHASE

5

 

 

 

Section 2.01

Authorization of Sale of the Purchased Units

5

Section 2.02

Sale and Purchase

5

Section 2.03

Closing

5

Section 2.04

Conditions to Closing

6

Section 2.05

Crosstex Deliveries

7

Section 2.06

Purchasers’ Deliveries

8

Section 2.07

Independent Nature of Purchasers’ Obligations and Rights

8

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATED TO CROSSTEX

8

 

 

 

Section 3.01

Partnership Existence

8

Section 3.02

Capitalization and Valid Issuance of Purchased Units

9

Section 3.03

Registration Statement and Prospectus

10

Section 3.04

Crosstex SEC Documents

11

Section 3.05

No Material Adverse Change

12

Section 3.06

Litigation

12

Section 3.07

No Conflicts; Compliance with Laws

12

Section 3.08

Authority, Enforceability

13

Section 3.09

Approvals

13

Section 3.10

MLP Status

13

Section 3.11

Investment Company Status

13

Section 3.12

Certain Fees

13

Section 3.13

No Side Agreements

14

Section 3.14

Insurance

14

Section 3.15

Internal Accounting Controls

14

Section 3.16

Form S-3 Eligibility

14

Section 3.17

Listing and Maintenance Requirements

14

Section 3.18

Material Agreements

14

Section 3.19

Subsequent Offerings

14

Section 3.20

Confidential Information

14

Section 3.21

Further Agreements of Crosstex

15

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS

15

 

 

 

Section 4.01

Existence

15

Section 4.02

Authorization, Enforceability

15

 

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Section 4.03

No Breach

15

Section 4.04

Certain Fees

15

Section 4.05

No Side Agreements

16

Section 4.06

Lock-Up Agreement

16

Section 4.07

Short Selling

16

Section 4.08

Crosstex Information

16

 

 

 

ARTICLE V INDEMNIFICATION, COSTS AND EXPENSES

16

 

 

 

Section 5.01

Indemnification by Crosstex

16

Section 5.02

Indemnification by the Purchasers

17

Section 5.03

Indemnification Procedure

17

 

 

 

ARTICLE VI MISCELLANEOUS

18

 

 

 

Section 6.01

Interpretation and Survival of Provisions

18

Section 6.02

Survival of Provisions

18

Section 6.03

No Waiver; Modifications in Writing

18

Section 6.04

Binding Effect; Assignment

19

Section 6.05

Non-Disclosure

19

Section 6.06

Communications

19

Section 6.07

Entire Agreement

20

Section 6.08

Governing Law

21

Section 6.09

Waiver of Jury Trial

21

Section 6.10

Execution in Counterparts

21

 

Exhibit A —

Form of Opinion of Crosstex Counsel

 

Exhibit B —

Form of General Partner Waiver

 

 

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COMMON UNIT PURCHASE AGREEMENT

 

This COMMON UNIT PURCHASE AGREEMENT, dated as of January 9, 2013 (this
“Agreement”), is by and between CROSSTEX ENERGY, L.P., a Delaware limited
partnership (“Crosstex”), and each of the purchasers set forth in Schedule A
hereto (the “Purchasers”).

 

WHEREAS, Crosstex has filed with the Commission (as defined below), pursuant to
the Securities Act (as defined below) and the rules and regulations adopted by
the Commission thereunder, the Registration Statement (as defined below)
relating to the offer and sale from time to time of up to $500,000,000.00
aggregate initial offering price of common units representing limited partner
interests in Crosstex (“Common Units”) and certain other Crosstex securities,
and such Registration Statement has become effective; and

 

WHEREAS, Crosstex desires to sell to each of the Purchasers, and each of the
Purchasers desires, severally and not jointly, to purchase from Crosstex,
certain of those Common Units, in accordance with the provisions of this
Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01                             Definitions.  As used in this
Agreement, and unless the context requires a different meaning, the following
terms have the meanings indicated:

 

“Affiliate” means, with respect to a specified Person, any other Person,
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person.  For purposes of this definition,
“control” (including, with correlative meanings, “controlling,” “controlled by,”
and “under common control with”) means the power to direct or cause the
direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the introductory paragraph.

 

“Allocated Purchase Price” means with respect to each Purchaser, the dollar
amount set forth opposite such Purchaser’s name under the heading “Allocated
Purchase Price” on Schedule A hereto.

 

“Basic Documents” means, collectively, this Agreement, the Partnership
Agreement, the Non-Disclosure Agreement and any and all other agreements or
instruments executed and delivered to the Purchasers by Crosstex or any
Subsidiary of Crosstex hereunder or thereunder.

 

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or State
of Texas are authorized or required by law or other governmental action to
close.

 

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“Clearfield” shall have the meaning specified in Section 3.04(c).

 

“Closing” shall have the meaning specified in Section 2.03.

 

“Closing Date” shall have the meaning specified in Section 2.03.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Units” has the meaning set forth in the recitals.

 

“Company Lock-Up Date” means 60 days from the date of the Public Prospectus.

 

“Concurrent Public Offering” means the concurrent underwritten public offering
of 7,500,000 common units pursuant to Crosstex’s existing shelf registration
statement.

 

“Crosstex” has the meaning set forth in the introductory paragraph.

 

“Crosstex Credit Facility” means the Amended and Restated Credit Agreement,
dated as of February 10, 2010, by and among Crosstex and the lenders named
therein, as amended as of the date hereof.

 

“Crosstex Financial Statements” shall have the meaning specified in
Section 3.04(a).

 

“Crosstex Material Adverse Effect” means any material and adverse effect on
(a) the assets, liabilities, financial condition, business, operations, affairs
or prospects of Crosstex and its Subsidiaries taken as a whole; (b) the ability
of Crosstex and its Subsidiaries taken as a whole to carry out their business as
such business is conducted as of the date hereof or to meet their obligations
under the Basic Documents on a timely basis; or (c) the ability of Crosstex to
consummate the transactions under any Basic Document; provided, however, that a
Crosstex Material Adverse Effect shall not include any material and adverse
effect on the foregoing to the extent such material and adverse effect results
from, arises out of, or relates to (x) a general deterioration in the economy or
changes in the general state of the industries in which the Crosstex Parties
operate, except to the extent that the Crosstex Parties, taken as a whole, are
adversely affected in a disproportionate manner as compared to other industry
participants, (y) the outbreak or escalation of hostilities involving the United
States, the declaration by the United States of a national emergency or war or
the occurrence of any other calamity or crisis, including acts of terrorism, or
(z) any change in accounting requirements or principles imposed upon Crosstex
and its Subsidiaries or their respective businesses or any change in applicable
Law, or the interpretation thereof.

 

“Crosstex Parties” means Crosstex, the General Partner, and all of Crosstex’s
Subsidiaries.

 

“Crosstex Related Parties” shall have the meaning specified in Section 5.02.

 

“Crosstex SEC Documents” shall have the meaning specified in Section 3.04(a).

 

“Delaware LLC Act” shall have the meaning specified in Section 3.02(d).

 

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“Delaware LP Act” shall have the meaning specified in Section 3.02(b).

 

“Effective Date” shall have the meaning specified in Section 3.03.

 

“Effective Time” shall have the meaning specified in Section 3.03.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time.

 

“General Partner” means Crosstex Energy GP, LLC, a Delaware limited liability
company and the general partner of Crosstex.

 

“Governmental Authority” means, with respect to a particular Person, any
country, state, county, city and political subdivision in which such Person or
such Person’s Property is located or which exercises valid jurisdiction over any
such Person or such Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary
authority which exercises valid jurisdiction over any such Person or such
Person’s Property.  Unless otherwise specified, all references to Governmental
Authority herein with respect to Crosstex means a Governmental Authority having
jurisdiction over Crosstex, its Subsidiaries or any of their respective
Properties.

 

“Indemnified Party” shall have the meaning specified in Section 5.03.

 

“Indemnifying Party” shall have the meaning specified in Section 5.03.

 

“Law” means any federal, state, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law, rule or regulation.

 

“Lien” means any mortgage, claim, encumbrance, pledge, lien (statutory or
otherwise), security agreement, conditional sale or trust receipt or a lease,
consignment or bailment, preference or priority or other encumbrance upon or
with respect to any property of any kind.

 

“NASDAQ” means the NASDAQ Global Select Market.

 

“Non-Disclosure Agreement” means the Letter Agreement, dated October 19, 2012,
by and between MTP Energy Management LLC (on behalf of funds and accounts under
management) and Crosstex Energy, Inc. and Crosstex.

 

“Partnership Agreement” means the Sixth Amended and Restated Agreement of
Limited Partnership of Crosstex, dated as of March 23, 2007, as amended by
Amendment No. 1 to Sixth Amended and Restated Agreement of Limited Partnership
of Crosstex Energy, L.P. dated as of December 20, 2007, Amendment No. 2 to Sixth
Amended and Restated Agreement of Limited Partnership of Crosstex Energy, L.P.
effective as of January 1, 2007, Amendment No. 3 to Sixth Amended and Restated
Agreement of Limited Partnership of Crosstex Energy, L.P., dated as of

 

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January 19, 2010 and Amendment No. 4 to Sixth Amended and Restated Agreement of
Limited Partnership of Crosstex Energy, L.P., dated as of September 13, 2012.

 

“Partnership Securities” means any class or series of equity interest in
Crosstex (but excluding (a) any options, rights, warrants and appreciation
rights relating to an equity interest in Crosstex granted pursuant to the
Crosstex Energy GP, LLC Amended and Restated Long-Term Incentive Plan, the
Crosstex Energy, Inc. Amended and Restated Long-Term Incentive Plan and the
Crosstex Energy, Inc. 2009 Long-Term Incentive Plan, (b) Series A PIK Preferred
Units, as such term is defined in the Partnership Agreement), including without
limitation Common Units, Series A Preferred Units and the Incentive Distribution
Rights (as defined in the Partnership Agreement) and (c) any Common Units or
securities convertible or exchangeable into Common Units as payment of any part
of the purchase price for businesses that are acquired by any of the Crosstex
Parties or Crosstex Energy, Inc.; provided that, with regard to clause (c), any
third party recipient of such Common Units or other securities must agree in
writing to be bound by the terms of Section 3.19 until the Company Lock-Up Date.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.

 

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

 

“Prospectus” shall have the meaning specified in Section 3.03.

 

“Public Prospectus” means the final prospectus supplement relating to the
Concurrent Public Offering, as first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations.

 

“Purchase Price” means $39,285,000.00 which is the aggregate of each Purchaser’s
Allocated Purchase Price as set forth on Schedule A hereto.

 

“Purchased Units” means with respect to each Purchaser, the number of Common
Units as set forth opposite such Purchaser’s name on Schedule A hereto.

 

“Purchaser Lock-Up Period” shall have the meaning specified in Section 4.06.

 

“Purchaser Related Parties” shall have the meaning specified in Section 5.01.

 

“Purchasers” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Registration Statement” shall have the meaning specified in Section 3.03.

 

“Representatives” of any Person means the officers, directors, managers,
employees, agents, counsel, accountants, investment bankers and other
representatives of such Person.

 

“Rules and Regulations” shall have the meaning specified in Section 3.03.

 

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“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

“Series A Preferred Units” means the Series A Convertible Preferred Units and
any Common Units into which such Series A Convertible Preferred Units convert.

 

“Subsidiary” means, as to any Person, any corporation or other entity of which:
(i) such Person or a Subsidiary of such Person is a general partner or manager;
(ii) at least a majority of the outstanding equity interest having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity (irrespective of
whether or not at the time any equity interest of any other class or classes of
such corporation or other entity shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more of its Subsidiaries; or (iii) any
corporation or other entity as to which such Person consolidates for accounting
purposes.

 

“Transfer” shall have the meaning specified in Section 4.06.

 

Section 1.02                             Accounting Procedures and
Interpretation.  Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all Crosstex Financial Statements and
certificates and reports as to financial matters required to be furnished to the
Purchasers hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
promulgated by the Commission) and in compliance as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto.

 

ARTICLE II
AGREEMENT TO SELL AND PURCHASE

 

Section 2.01                             Authorization of Sale of the Purchased
Units.  Crosstex has authorized the issuance and sale to the Purchasers of the
Purchased Units.

 

Section 2.02                             Sale and Purchase.  Subject to the
terms and conditions hereof, Crosstex hereby agrees to issue and sell to each
Purchaser, free and clear of any and all Liens, and each Purchaser, severally
and not jointly, hereby agrees to purchase from Crosstex, the number of
Purchased Units as set forth on Schedule A (such number of Purchased Units set
forth thereon with respect to each Purchaser), and each Purchaser agrees to pay
Crosstex its Allocated Purchase Price.

 

Section 2.03                             Closing.  Subject to the terms and
conditions hereof, the consummation of the purchase and sale of the Purchased
Units hereunder (the “Closing”) shall take place at 9:00 a.m., Central Time, on
January 14, 2013 at the offices of Vinson & Elkins L.L.P., First City Tower,
1001 Fannin Street, Houston, Texas 77002, or at such other time and date not
later than five (5) full Business Days thereafter as Crosstex and the Purchasers
may agree (the “Closing Date”). The parties agree that the Closing may occur via
delivery of facsimiles of this Agreement and cross-receipts; provided, that
originals of such documents are sent via overnight delivery to

 

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be received by the other party (or designee of such other party) on the first
business day immediately following the Closing Date.

 

Section 2.04                             Conditions to Closing.

 

(a)                                 Mutual Conditions.  The respective
obligations of each party to consummate the purchase and issuance and sale of
the Purchased Units shall be subject to the satisfaction on or prior to the
Closing Date of each of the following conditions (any or all of which may be
waived by a particular party on behalf of itself in writing, in whole or in
part, to the extent permitted by applicable Law):

 

(i)                                     no statute, rule, order, decree or
regulation shall have been enacted or promulgated, and no action shall have been
taken, by any Governmental Authority which temporarily, preliminarily or
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated hereby or makes the transactions
contemplated hereby illegal; and

 

(ii)                                  there shall not be pending any suit,
action or proceeding by any Governmental Authority seeking to restrain,
preclude, enjoin or prohibit the transactions contemplated by this Agreement.

 

(b)                                 Purchasers’ Conditions.  The respective
obligation of each Purchaser to consummate the purchase of the Purchased Units
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions (any or all of which may be waived by such Purchaser in
writing, in whole or in part with respect to its Purchased Units, to the extent
permitted by applicable Law):

 

(i)                                     since the date of this Agreement, no
Crosstex Material Adverse Effect shall have occurred and be continuing;

 

(ii)                                  no notice of delisting shall have been
received by Crosstex;

 

(iii)                               the representations and warranties of
Crosstex contained in this Agreement that are qualified by materiality or
Crosstex Material Adverse Effect shall be true and correct as of the Closing
Date as if made on and as of the Closing Date and all other representations and
warranties shall be true and correct in all material respects as of the Closing
Date as if made on and as of the Closing Date (except that representations made
as of a specific date shall be required to be true and correct as of such date
only);

 

(iv)                              Crosstex shall have delivered, or caused to be
delivered, to the Purchasers at the Closing, Crosstex’s closing deliveries
described in Section 2.05; and

 

(v)                                 the closing of the Concurrent Public
Offering shall have occurred or shall occur contemporaneously with the Closing.

 

(c)                                  Crosstex’s Conditions.  The obligation of
Crosstex to consummate the sale of the Purchased Units to each Purchaser shall
be subject to the satisfaction on or prior to the Closing Date of the following
condition (which may be waived by Crosstex in writing, in whole or in

 

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part, to the extent permitted by applicable Law): the representations and
warranties of such Purchaser contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as if made on and
as of the Closing Date (except that representations made as of a specific date
shall be required to be true and correct as of such date only).

 

Section 2.05                             Crosstex Deliveries.  At the Closing,
subject to the terms and conditions hereof, Crosstex will deliver, or cause to
be delivered, to the Purchasers:

 

(a)                                 The Purchased Units by electronic delivery
to The Depository Trust Company on Purchasers’ behalf, registered in such
name(s) as Purchasers have designated;

 

(b)                                 Copies of (i) the Certificate of Limited
Partnership of Crosstex and (ii) the Certificate of Formation of Crosstex Energy
GP, LLC, each certified by the Secretary of State of the jurisdiction of its
formation as of a recent date;

 

(c)                                  A certificate of the Secretary of State of
the State of Delaware, dated a recent date, that Crosstex is in good standing;

 

(d)                                 A cross-receipt executed by Crosstex and
delivered to each Purchaser certifying that it has received the Allocated
Purchase Price with respect to such Purchaser as of the Closing Date;

 

(e)                                  An opinion addressed to the Purchasers from
legal counsel to Crosstex, dated as of the Closing Date, in the form and
substance attached hereto as Exhibit A;

 

(f)                                   A duly executed waiver of the General
Partner with respect to certain of its rights under the Partnership Agreement,
substantially in the form attached hereto as Exhibit B;

 

(g)                                  A certificate of the Secretary or Assistant
Secretary of Crosstex Energy GP, LLC, on behalf of Crosstex, certifying as to
and attaching (1) the Partnership Agreement, (2) board resolutions authorizing
the execution and delivery of the Basic Documents and the consummation of the
transactions contemplated thereby, including the issuance of the Purchased Units
and (3) its incumbent officers authorized to execute the Basic Documents,
setting forth the name and title and bearing the signatures of such officers;
and

 

(h)                                 A certificate, dated the Closing Date and
signed by (x) the Chief Executive Officer and (y) the Chief Financial Officer of
Crosstex Energy GP, LLC, in their capacities as such, stating that:

 

(i)                                     Crosstex has performed and complied with
the covenants and agreements contained in this Agreement that are required to be
performed and complied with by Crosstex on or prior to the Closing Date;

 

(ii)                                  The representations and warranties of
Crosstex contained in this Agreement that are qualified by materiality or
Crosstex Material Adverse Effect were true and correct when made and as of the
Closing Date and all other representations and warranties were true and correct
in all material respects when made and are true and correct in all material
respects as of the Closing Date, in each case as though made at and as of the
Closing Date

 

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(except that representations made as of a specific date shall be required to be
true and correct as of such date only).

 

Section 2.06          Purchasers’ Deliveries.  At the Closing, subject to the
terms and conditions hereof, each Purchaser will deliver, or cause to be
delivered, to Crosstex:

 

(a)           Payment to Crosstex of each Purchaser’s Allocated Purchase Price
by wire transfer of immediately available funds to an account designated by
Crosstex in writing prior to the Closing Date; and

 

(b)           A cross-receipt executed by each Purchaser and delivered to
Crosstex certifying that it has received its respective Purchased Units as of
the Closing Date.

 

Section 2.07          Independent Nature of Purchasers’ Obligations and Rights. 
The obligations of each Purchaser under any Basic Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Basic Document.  The failure or waiver of performance under
any Basic Document by any Purchaser does not excuse performance by any other
Purchaser.  Nothing contained herein or in any other Basic Document, and no
action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Basic Documents.  Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other Basic
Documents, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES AND COVENANTS
RELATED TO CROSSTEX

 

Crosstex represents and warrants to and covenants with each Purchaser as
follows:

 

Section 3.01          Partnership Existence.  Crosstex (a) is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware; and (b) has all requisite power and authority, and has
all governmental licenses, authorizations, consents and approvals necessary, to
own, lease, use and operate its Properties and carry on its business as its
business is now being conducted, except where the failure to obtain such
licenses, authorizations, consents and approvals would not be reasonably likely
to have a Crosstex Material Adverse Effect.  Each of Crosstex’s Subsidiaries has
been duly incorporated or formed, as the case may be, and is validly existing
and in good standing under the laws of the State or other jurisdiction of its
incorporation or organization, as the case may be, and has all requisite power
and authority, and has all governmental licenses, authorizations, consents and
approvals necessary, to own, lease, use or operate its respective Properties and
carry on its business as now being conducted, except where the failure to obtain
such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Crosstex Material Adverse Effect.  None of Crosstex nor any of
its Subsidiaries are in default in the performance, observance or fulfillment of
any provision

 

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of, in the case of Crosstex, the Partnership Agreement or its Certificate of
Limited Partnership or, in the case of any Subsidiary of Crosstex, its
respective certificate of incorporation, certification of formation, bylaws,
limited liability company agreement or other similar organizational documents. 
Each of Crosstex and its Subsidiaries is duly qualified or licensed and in good
standing as a foreign limited partnership, limited liability company or
corporation, as applicable, and is authorized to do business in each
jurisdiction in which the ownership or leasing of its respective Properties or
the character of its respective operations makes such qualification necessary,
except where the failure to obtain such qualification, license, authorization or
good standing would not be reasonably likely to have a Crosstex Material Adverse
Effect.

 

Section 3.02          Capitalization and Valid Issuance of Purchased Units.

 

(a)           The Purchased Units shall have those rights, preferences,
privileges and restrictions governing the Common Units as reflected in the
Partnership Agreement.

 

(b)           As of the date of this Agreement, prior to the issuance and sale
of the Purchased Units, as contemplated hereby, and the Common Units to be
issued pursuant to the Concurrent Public Offering, the issued and outstanding
limited partner interests of Crosstex consist of 66,896,495 Common Units,
15,072,142 Series A Preferred Units and the Incentive Distribution Rights (as
defined in the Partnership Agreement).  The only issued and outstanding general
partner interests of Crosstex are the interests of the General Partner described
in the Partnership Agreement.  All outstanding Common Units, Series A Preferred
Units and Incentive Distribution Rights and the limited partner interests
represented thereby have been duly authorized and validly issued in accordance
with the Partnership Agreement and are fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by matters described in Sections 17-303, 17-607 and 17-804 of
the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”)).

 

(c)           Other than the Crosstex Energy GP, LLC Amended and Restated
Long-Term Incentive Plan, the Crosstex Energy, Inc. Amended and Restated
Long-Term Incentive Plan and the Crosstex Energy, Inc. 2009 Long-Term Incentive
Plan, Crosstex has no equity compensation plans that contemplate the issuance of
partnership interests of Crosstex (or securities convertible into or
exchangeable for partnership interests of Crosstex).  No indebtedness having the
right to vote (or convertible into or exchangeable for securities having the
right to vote) on any matters on which Crosstex unitholders may vote are issued
or outstanding.  Except as set forth in the first sentence of this
Section 3.02(c) or as are contained in the Partnership Agreement, there are no
outstanding or authorized (i) options, warrants, preemptive rights,
subscriptions, calls, or other rights, convertible or exchangeable securities,
agreements, claims or commitments of any character obligating Crosstex or any of
its Subsidiaries to issue, transfer or sell any partnership interests or other
equity interest in, Crosstex or any of its Subsidiaries or securities
convertible into or exchangeable for such partnership interests,
(ii) obligations of Crosstex or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any partnership interests or equity interests of Crosstex or
any of its Subsidiaries or any such securities or agreements listed in
clause (i) of this sentence or (iii) voting trusts or similar agreements to
which Crosstex or any of its Subsidiaries is a party with respect to the voting
of the equity interests of Crosstex or any of its Subsidiaries.

 

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(d)           (i) All of the issued and outstanding equity interests of each of
Crosstex’s Subsidiaries are owned, directly or indirectly, by Crosstex free and
clear of any Liens (except for such restrictions as may exist under applicable
Law and except for such Liens as may be imposed under the Crosstex Credit
Facility or the organizational documents of Crosstex’s Subsidiaries, as
applicable), and all such ownership interests have been duly authorized, validly
issued and are fully paid (to the extent required in the organizational
documents of Crosstex’s Subsidiaries, as applicable) and non-assessable (except
as such nonassessability may be affected by matters described in
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act, Sections 18-607 and
18-804 of the Delaware Limited Liability Company Act (the “Delaware LLC Act”),
Sections 153.102, 153.202 and 153.210 of the Texas Business Organizations Code,
and Sections 12:1327 and 12:1328 of the Louisiana Limited Liability Company Act,
as applicable) and free of preemptive rights and (ii) except as disclosed in the
Crosstex SEC Documents, neither Crosstex nor any of its Subsidiaries owns any
shares of capital stock or other securities of, or interest in, any other
Person, or is obligated to make any capital contribution to or other investment
in any other Person.

 

(e)           The Purchased Units being purchased by each of the Purchasers
hereunder and the limited partner interests represented thereby have been duly
authorized by Crosstex pursuant to the Partnership Agreement and, when issued
and delivered to such Purchaser against payment therefor in accordance with the
terms of this Agreement, will be validly issued, fully paid (to the extent
required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Sections 17-303, 17-607
and 17-804 of the Delaware LP Act) and will be free of any and all Liens and
restrictions on transfer, other than restrictions on transfer under the
Partnership Agreement or this Agreement and under applicable state and federal
securities laws.

 

(f)            The Common Units are listed on the NASDAQ, and Crosstex has not
received any notice of delisting.  A “Notification Form: Listing of Additional
Shares” and supporting documentation related to the Purchased Units will be
filed with the NASDAQ in accordance with its rules and procedures.

 

(g)           Neither the filing of the Registration Statement nor the offering
or sale of the Purchased Units as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any Common Units or other
securities of Crosstex other than as have been waived.

 

Section 3.03          Registration Statement and Prospectus.  A registration
statement on Form S-3 (File No. 333-166663) pursuant to which to the Purchased
Units will be offered has (i) been prepared by Crosstex in conformity with the
requirements of the Securities Act, and the rules and regulations (the
“Rules and Regulations”) of the Commission thereunder, (ii) been filed with the
Commission under the Securities Act, and (iii) become effective under the
Securities Act.  Copies of such registration statement and each of the
amendments thereto, if any, have been delivered by Crosstex to the Purchasers. 
As used in this Agreement, “Effective Time” means the date and the time as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; “Effective Date”
means the date of the Effective Time; “Registration Statement” means the
registration statement referred to above, as amended at the Effective Time; and
“Prospectus” means the final prospectus supplement relating to the Purchased
Units and the offering thereof, including the

 

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accompanying base prospectus, as first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations after the date and time this Agreement
is executed.  Reference made herein to the Prospectus shall be deemed to refer
to and include any information incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such Prospectus,
and any reference to any amendment or supplement to the Prospectus shall be
deemed to refer to and include any document filed under the Exchange Act after
the date of such Prospectus, and incorporated by reference in the Prospectus;
and any reference to any amendment to the Registration Statement shall be deemed
to include any periodic report of Crosstex filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement.  The Commission has not
issued any order preventing or suspending the use of any Prospectus.

 

Section 3.04          Crosstex SEC Documents.

 

(a)           Crosstex has timely filed with the Commission all forms,
registration statements, reports, schedules and statements required to be filed
by it under the Exchange Act or the Securities Act (all such documents together
with the Registration Statement, collectively the “Crosstex SEC Documents”). 
The Crosstex SEC Documents, including, without limitation, any audited or
unaudited financial statements and any notes thereto or schedules included
therein (the “Crosstex Financial Statements”), at the time filed (in the case of
registration statements, solely on the dates of effectiveness) (except to the
extent corrected by a subsequently filed Crosstex SEC Document filed prior to
the date hereof) (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein (in light of the circumstances under which
they were made in the case of any prospectus) not misleading, (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as applicable, (c) complied as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, (d) in the case of
the Crosstex Financial Statements, were prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q of the Commission), and (e) in the case of the Crosstex Financial
Statements, fairly present (subject in the case of unaudited statements to
normal, recurring and year-end audit adjustments) in all material respects the
consolidated financial position of Crosstex and its Subsidiaries as of the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended.

 

(b)           The pro forma financial statements included or incorporated by
reference in the Crosstex SEC Documents (i) include assumptions that provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included therein,
(ii) have been prepared in accordance with the Commission’s rules and guidance
with respect to pro forma financial information and (iii) have been prepared on
the basis consistent with such historical financial statements, except for the
pro forma adjustments specified therein, and present fairly in all material
respects the historical and proposed transactions reflected therein.

 

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(c)           The historical financial statements (including the related notes
and supporting schedules) of Clearfield Energy, Inc. and its subsidiaries
(“Clearfield”) included or incorporated by reference in the Crosstex SEC
Documents comply as to form in all material respects with the requirements of
Regulation S-X under the Securities Act and present fairly in all material
respects the financial condition, results of operations and cash flows of the
entities purported to be shown thereby, at the dates and for the periods
indicated and have been prepared in conformity with accounting principles
generally accepted in the United States applied on a consistent basis throughout
the periods involved, except to the extent described therein.

 

(d)           KPMG LLP is an independent, registered public accounting firm with
respect to Crosstex and the General Partner and has not resigned or been
dismissed as independent public accountants of Crosstex or the General Partner
as a result of or in connection with any disagreement with Crosstex on a matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.

 

(e)           Kreischer Miller, who have certified certain financial statements
of Clearfield, whose report appears in the Crosstex SEC Documents or is
incorporated by reference therein, are independent certified public accountants
as required by the Securities Act and the Rules and Regulations.

 

Section 3.05          No Material Adverse Change.  Except as set forth in or
contemplated by the Crosstex SEC Documents filed with the Commission on or prior
to the date hereof, since the date of Crosstex’s most recent Form 10-K filing
with the Commission, Crosstex and its Subsidiaries have conducted their
respective businesses in the ordinary course, consistent with past practice, and
there has been no (a) change, event, occurrence, effect, fact, circumstance or
condition that has had or would be reasonably likely to have a Crosstex Material
Adverse Effect, (b) acquisition or disposition of any material asset by Crosstex
or any of its Subsidiaries or any contract or arrangement therefor, otherwise
than for fair value in the ordinary course of business or as disclosed in the
Crosstex SEC Documents, or (c) material change in Crosstex’s accounting
principles, practices or methods.

 

Section 3.06          Litigation.  Except as set forth in the Crosstex SEC
Documents, there is no action, suit, or proceeding pending (including any
investigation, litigation or inquiry) or, to Crosstex’s knowledge, contemplated
or threatened against or affecting any of the Crosstex Parties or any of their
respective officers, directors, properties or assets, which (a) questions the
validity of this Agreement or the right of Crosstex to enter into this Agreement
or to consummate the transactions contemplated hereby or (b) (individually or in
the aggregate) would be reasonably likely to result in a Crosstex Material
Adverse Effect.

 

Section 3.07          No Conflicts; Compliance with Laws.  The execution,
delivery and performance by Crosstex of the Basic Documents and compliance by
Crosstex with the terms and provisions hereof and thereof, and the issuance and
sale by Crosstex of the Purchased Units, do not and will not (a) assuming the
accuracy of the representations and warranties of the Purchasers contained
herein and their compliance with the covenants contained herein, violate any
provision of any Law or Permit having applicability to Crosstex or any of its
Subsidiaries or any of their respective Properties, (b) conflict with or result
in a violation or breach of any provision of the certificate of limited
partnership or other organizational documents of Crosstex,

 

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or the Partnership Agreement, or any organizational documents of any of
Crosstex’s Subsidiaries, (c) require any consent, approval or notice under or
result in a violation or breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any contract, agreement, instrument,
obligation, note, bond, mortgage, license, loan or credit agreement to which
Crosstex or any of its Subsidiaries is a party or by which Crosstex or any of
its Subsidiaries or any of their respective Properties may be bound, or
(d) result in or require the creation or imposition of any Lien upon or with
respect to any of the Properties now owned or hereafter acquired by Crosstex or
any of its Subsidiaries, except in the cases of clauses (a), (c) and (d), where
any such conflict, violation, default, breach, termination, cancellation,
failure to receive consent, approval or notice, or acceleration with respect to
the foregoing provisions of this Section 3.07 would not be, individually or in
the aggregate, reasonably likely to result in a Crosstex Material Adverse
Effect.

 

Section 3.08          Authority, Enforceability.  Crosstex has all necessary
partnership power and authority to execute, deliver and perform its obligations
under the Basic Documents, and the execution, delivery and performance by
Crosstex of the Basic Documents has been duly authorized by all necessary action
on the part of the General Partner; and the Basic Documents constitute the
legal, valid and binding obligations of Crosstex, enforceable in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer and similar laws affecting creditors’ rights
generally or by general principles of equity and except as the rights to
indemnification may be limited by applicable law.  No approval from the holders
of the Common Units and/or Series A Preferred Units is required in connection
with Crosstex’s issuance and sale of the Purchased Units to the Purchasers.

 

Section 3.09          Approvals.  Except for the approvals that have already
been obtained, no authorization, consent, approval, waiver, license,
qualification or written exemption from, nor any filing, declaration,
qualification or registration with, any Governmental Authority or any other
Person is required in connection with the execution, delivery or performance by
Crosstex of any of the Basic Documents, except where the failure to receive such
authorization, consent, approval, waiver, license, qualification or written
exemption from, or to make such filing, declaration, qualification or
registration would not, individually or in the aggregate, be reasonably likely
to have a Crosstex Material Adverse Effect.

 

Section 3.10          MLP Status.  Crosstex has, for each taxable year beginning
after December 31, 2001, during which Crosstex was in existence, met the gross
income requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986,
as amended.

 

Section 3.11          Investment Company Status.  Crosstex is not now, and,
after the sale of the Purchased Units and the application of the net proceeds
from such sale will not be, an “investment company” or a company controlled by
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

 

Section 3.12          Certain Fees.  No fees or commissions are or will be
payable by Crosstex to brokers, finders, or investment bankers with respect to
the sale of any of the Purchased Units or the consummation of the transactions
contemplated by this Agreement.  Crosstex agrees that it will indemnify and hold
harmless each Purchaser from and against any and all claims, demands,

 

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or liabilities for broker’s, finder’s, placement, or other similar fees or
commissions incurred by Crosstex or alleged to have been incurred by Crosstex in
connection with the sale of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.

 

Section 3.13          No Side Agreements.  There are no agreements by, among or
between Crosstex or any of its Affiliates, on the one hand, and any Purchaser or
any of its Affiliates, on the other hand, with respect to the transactions
contemplated hereby other than the Basic Documents nor promises or inducements
for future transactions between or among any of such parties.

 

Section 3.14          Insurance.  Crosstex and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged.  Crosstex does not have any reason to believe that it or any
Subsidiary will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business.

 

Section 3.15          Internal Accounting Controls.  Crosstex and its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  Crosstex is not aware of any failures of such
internal accounting controls.

 

Section 3.16          Form S-3 Eligibility.  Crosstex satisfies the requirements
for use of Form S-3 under the Securities Act.

 

Section 3.17          Listing and Maintenance Requirements.  The issuance and
sale of the Purchased Units does not contravene NASDAQ rules and regulations.

 

Section 3.18          Material Agreements.  Crosstex has provided the Purchasers
with, or made available to the Purchasers through the Crosstex SEC Documents,
correct and complete copies of all material agreements (as defined in
Section 601(b)(10) of Regulation S-K promulgated by the Commission) and of all
exhibits to the Crosstex SEC Documents, including amendments to or other
modifications of pre-existing material agreements, entered into by Crosstex.

 

Section 3.19          Subsequent Offerings.  Until the Company Lock-Up Date,
Crosstex will not grant, issue or sell any Partnership Securities, any
securities convertible into or exchangeable therefor or take any other action
that may result in the issuance of any of the foregoing.

 

Section 3.20          Confidential Information.  To the knowledge of Crosstex,
none of its employees or executive officers has disclosed material non-public
information (other than the fact that Crosstex was contemplating a private
financing) to any prospective investor who has not entered into a
confidentiality or non-disclosure agreement between such prospective investor
and Crosstex relating to such information.

 

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Section 3.21          Further Agreements of Crosstex.  Crosstex shall prepare
the final prospectus supplement relating to the Purchased Units and the offering
thereof in a form approved by the Purchasers and file such final prospectus
supplement and the accompanying base prospectus, which together constitute the
Prospectus, pursuant to Rule 424(b) under the Securities Act not later than the
Commission’s close of business on the second business day following the
execution and delivery of this Agreement.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES AND COVENANTS
OF THE PURCHASERS

 

Each Purchaser, severally and not jointly, hereby represents and warrants and
covenants to Crosstex that:

 

Section 4.01          Existence.  Such Purchaser is duly organized and validly
existing and in good standing under the laws of its state of formation, with all
necessary power and authority to own properties and to conduct its business as
currently conducted.

 

Section 4.02          Authorization, Enforceability.  Such Purchaser has all
necessary legal power and authority to enter into, deliver and perform its
obligations under this Agreement.  The execution, delivery and performance of
this Agreement by such Purchaser and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary legal
action, and no further consent or authorization of such Purchaser is required.
This Agreement has been duly executed and delivered by such Purchaser and
constitutes legal, valid and binding obligations of such Purchaser; provided
that, the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general principles of equity and
except as the rights to indemnification may be limited by applicable law
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

Section 4.03          No Breach.  The execution, delivery and performance of
this Agreement by such Purchaser and the consummation by such Purchaser of the
transactions contemplated hereby will not (a) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material agreement to which such Purchaser is a party or by
which the Purchaser is bound or to which any of the property or assets of such
Purchaser is subject, (b) conflict with or result in any violation of the
provisions of the organizational documents of such Purchaser, or (c) violate any
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Purchaser or the property or assets of such
Purchaser, except in the case of clauses (a) and (c), for such conflicts,
breaches, violations or defaults as would not prevent the consummation of the
transactions contemplated by this Agreement.

 

Section 4.04          Certain Fees.  No fees or commissions are or will be
payable by such Purchaser to brokers, finders, or investment bankers with
respect to the purchase of any of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.  Such Purchaser agrees, severally
and not jointly with any other Purchaser, that it will indemnify and hold
harmless Crosstex from and against any and all claims, demands or liabilities
for broker’s,

 

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finder’s, placement, or other similar fees or commissions incurred by such
Purchaser or alleged to have been incurred by such Purchaser in connection with
the purchase of the Purchased Units or the consummation of the transactions
contemplated by this Agreement.

 

Section 4.05          No Side Agreements.  There are no other agreements by,
among or between such Purchaser and any of its Affiliates, on the one hand, and
Crosstex or any of its Affiliates, on the other hand, with respect to the
transactions contemplated hereby other than the Basic Documents, and there are
no promises or inducements for future transactions between or among any of such
parties.

 

Section 4.06          Lock-Up Agreement.  Without the prior written consent of
Crosstex, except as specifically provided in this Agreement, each Purchaser will
not, during the period commencing on the date hereof and ending 60 days after
the date of the Public Prospectus (such period, the “Purchaser Lock-Up Period”)
(1) offer, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
of its Purchased Units or (2) enter into any swap or other transaction or
arrangement that transfers or that is designed to, or that might reasonably be
expected to, result in the transfer to another, in whole or in part, any of the
economic consequences of ownership of its Purchased Units, whether any such
transaction described in clause (1) or (2) above (any such transaction described
in clauses (1) and (2), a “Transfer”) is to be settled by delivery of Common
Units or such other securities, in cash or otherwise; provided, however, that
any Purchaser may transfer its Purchased Units to an Affiliate of such Purchaser
or to any other Purchaser or an Affiliate of such other Purchaser, provided that
any such Affiliate transferee agrees to the restrictions set forth in this
Section 4.06.

 

Section 4.07          Short Selling.  Such Purchaser has not entered into any
short sales of the Common Units owned by it between the time it first began
discussion with Crosstex about the transactions contemplated by this Agreement
and the date hereof (it being understood that the entering into of a total
return swap shall not be considered a short sale of Common Units).

 

Section 4.08          Crosstex Information.  Such Purchaser acknowledges and
agrees that Crosstex has provided or made available to such Purchaser (through
EDGAR, Crosstex’s web site or otherwise) the Registration Statement and all
other Crosstex SEC Documents, as well as all press releases issued by Crosstex
through the date of this Agreement.

 

ARTICLE V
INDEMNIFICATION, COSTS AND EXPENSES

 

Section 5.01          Indemnification by Crosstex.  Crosstex agrees to indemnify
each Purchaser and its Representatives (collectively, “Purchaser Related
Parties”) from, and hold each of them harmless against, any and all losses,
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection therewith, and
promptly upon demand, pay or reimburse each of them for all reasonable costs,
losses, liabilities, damages, or expenses of any kind or nature whatsoever,
including, without limitation, the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating,
defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them as a result of, arising out of,

 

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or in any way related to the breach of any of the representations, warranties or
covenants of Crosstex contained herein, provided such claim for indemnification
relating to a breach of any representation or warranty is made prior to the
expiration of such representation or warranty.

 

Section 5.02          Indemnification by the Purchasers.  Each Purchaser agrees,
severally and not jointly, to indemnify Crosstex, the General Partners and their
respective Representatives (collectively, “Crosstex Related Parties”) from, and
hold each of them harmless against, any and all losses, actions, suits,
proceedings (including any investigations, litigation or inquiries), demands,
and causes of action, and, in connection therewith, and promptly upon demand,
pay or reimburse each of them for all reasonable costs, losses, liabilities,
damages, or expenses of any kind or nature whatsoever, including, without
limitation, the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such matter that may be incurred by them or asserted
against or involve any of them as a result of, arising out of, or in any way
related to the breach of any of the representations, warranties or covenants of
such Purchaser contained herein, provided such claim for indemnification
relating to a breach of any representation or warranty is made prior to the
expiration of such representation or warranty, provided, however, that the
liability of each Purchaser shall not be greater in amount than such Purchaser’s
Allocated Purchase Price.

 

Section 5.03          Indemnification Procedure.  Promptly after any Crosstex
Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”)
has received notice of any indemnifiable claim hereunder, or the commencement of
any action, suit or proceeding by a third person, which the Indemnified Party
believes in good faith is an indemnifiable claim under this Agreement, the
Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such action, suit or
proceeding, but failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability it may have to such Indemnified Party
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure. Such notice shall state the nature and the basis of
such claim to the extent then known.  The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter as long as the Indemnifying Party pursues the same diligently and in good
faith. If the Indemnifying Party undertakes to defend or settle, it shall
promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
all commercially reasonable respects in the defense thereof and the settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or
control.  Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party.  After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability; provided, however, that the Indemnified
Party shall be entitled (i) at its expense, to participate in the defense of
such asserted liability and the negotiations of the settlement thereof and
(ii) if (A) the Indemnifying Party has failed to assume the defense and employ
counsel or (B) if the defendants in any such action include both the Indemnified
Party and the Indemnifying Party and counsel to the Indemnified Party shall have
concluded that there may be reasonable defenses available to the Indemnified
Party that are

 

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different from or in addition to those available to the Indemnifying Party or if
the interests of the Indemnified Party reasonably may be deemed to conflict with
the interests of the Indemnifying Party, then the Indemnified Party shall have
the right to select a separate counsel and to assume such legal defense and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred.  Notwithstanding any
other provision of this Agreement, the Indemnifying Party shall not settle any
indemnified claim without the consent of the Indemnified Party, unless the
settlement thereof imposes no liability or obligation on, and includes a
complete release from liability of, and does not contain any admission of wrong
doing by, the Indemnified Party.

 

ARTICLE VI
MISCELLANEOUS

 

Section 6.01          Interpretation and Survival of Provisions.  Article,
Section, Schedule, and Exhibit references are to this Agreement, unless
otherwise specified. All references to instruments, documents, contracts, and
agreements are references to such instruments, documents, contracts, and
agreements as the same may be amended, supplemented, and otherwise modified from
time to time, unless otherwise specified. The word “including” shall mean
“including but not limited to.” Whenever Crosstex has an obligation under the
Basic Documents, the expense of complying with that obligation shall be an
expense of Crosstex unless otherwise specified. Whenever any determination,
consent, or approval is to be made or given by the Purchasers, such action shall
be in such Purchaser’s sole discretion unless otherwise specified in this
Agreement.  If any provision in the Basic Documents is held to be illegal,
invalid, not binding, or unenforceable, such provision shall be fully severable
and the Basic Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
the Basic Documents, and the remaining provisions shall remain in full force and
effect.

 

Section 6.02          Survival of Provisions.  The representations and
warranties set forth in Sections 3.02, 3.08, 3.09, 3.11, 3.12, 4.02 and 4.04
hereunder shall survive the execution and delivery of this Agreement
indefinitely, and the other representations and warranties set forth herein
shall survive for a period of twelve (12) months following the Closing Date
regardless of any investigation made by or on behalf of Crosstex or the
Purchasers.  The covenants made in this Agreement or any other Basic Document
shall survive the Closing of the transactions described herein and remain
operative and in full force and effect regardless of acceptance of any of the
Purchased Units and payment therefor and repayment or repurchase thereof.  All
indemnification obligations of Crosstex and the Purchasers and the provisions of
Article V shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing referencing that individual
Section, regardless of any purported general termination of this Agreement.

 

Section 6.03          No Waiver; Modifications in Writing.

 

(a)           Delay.  No failure or delay on the part of any party in exercising
any right, power, or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power, or remedy
preclude any other or further exercise thereof or the exercise of

 

18

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any other right, power, or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to a
party at law or in equity or otherwise.

 

(b)           Specific Waiver.  Except as otherwise provided herein, no
amendment, waiver, consent, modification, or termination of any provision of
this Agreement or any other Basic Document (except in the case of the
Partnership Agreement for amendments adopted pursuant to Section 13.1 thereof)
shall be effective unless signed by each of the parties hereto or thereto
affected by such amendment, waiver, consent, modification, or termination.  Any
amendment, supplement or modification of or to any provision of this Agreement
or any other Basic Document, any waiver of any provision of this Agreement or
any other Basic Document, and any consent to any departure by Crosstex from the
terms of any provision of this Agreement or any other Basic Document shall be
effective only in the specific instance and for the specific purpose for which
made or given. Except where notice is specifically required by this Agreement,
no notice to or demand on Crosstex in any case shall entitle Crosstex to any
other or further notice or demand in similar or other circumstances.

 

Section 6.04          Binding Effect; Assignment.

 

(a)           Binding Effect.  This Agreement shall be binding upon Crosstex,
each Purchaser, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.

 

(b)           Assignment of Rights.  All or any portion of the rights and
obligations of each Purchaser under this Agreement may be transferred by such
Purchaser to any Affiliate of such Purchaser without the consent of Crosstex. 
No portion of the rights and obligations of each Purchaser under this Agreement
may be transferred by such Purchaser to a non-Affiliate without the written
consent of Crosstex.

 

Section 6.05          Non-Disclosure.  Notwithstanding anything herein to the
contrary, the Non-Disclosure Agreement shall remain in full force and effect
regardless of any termination of this Agreement. Other than the Current Reports
on Form 8-K to be filed in connection with this Agreement, Crosstex, the General
Partner, their respective Subsidiaries and any of their respective
Representatives shall disclose the identity of, or any other information
concerning, any Purchaser or any of its Affiliates only after providing such
Purchaser a reasonable opportunity to review and comment on such disclosure;
provided, however, that nothing in this Section 6.05 shall delay any required
filing or other disclosure with the Commission, NASDAQ or any Governmental
Authority or otherwise hinder Crosstex, the General Partner, their respective
Subsidiaries or their Representatives’ ability to timely comply with all laws or
rules and regulations of the Commission, NASDAQ or other Governmental Authority.

 

Section 6.06          Communications.  All notices and demands provided for
hereunder shall be in writing and shall be given by registered or certified
mail, return receipt requested, telecopy, air courier guaranteeing overnight
delivery or personal delivery to the following addresses:

 

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(a)                                 If to any Purchaser:

 

MTP Energy Management LLC

c/o Magnetar Financial LLC

1603 Orrington Avenue, 13th Floor

Evanston, Illinois 60201

Attention: Doug Litowitz

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

 

with a copy (which will not constitute notice) to:

 

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, Texas 77002

Attention: Matthew R. Pacey

Facsimile: (713) 615-5139

Internet electronic mail: mpacey@velaw.com

 

(b)                               If to Crosstex:

 

Crosstex Energy, L.P.

2501 Cedar Springs

Dallas, Texas 75201

Attention: Barry E. Davis

Facsimile: (214) 953-9500

Internet electronic mail: barry.davis@crosstexenergy.com

 

with a copy (which will not constitute notice) to:

 

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Attention: Doug Rayburn

Facsimile: (214) 661-4634

Internet electronic mail: doug.rayburn@bakerbotts.com

 

or to such other address as Crosstex or such Purchaser may designate in
writing.  All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; upon actual
receipt if sent by certified or registered mail, return receipt requested, or
regular mail, if mailed; upon actual receipt of the overnight courier copy, if
sent via facsimile; and upon actual receipt when delivered to an air courier
guaranteeing overnight delivery.

 

Section 6.07          Entire Agreement.  This Agreement, the other Basic
Documents and the other agreements and documents referred to herein are intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the

 

20

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agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
the other Basic Documents with respect to the rights granted by Crosstex or any
of its Affiliates or the Purchasers or any of their Affiliates set forth herein
or therein.  This Agreement, the other Basic Documents and the other agreements
and documents referred to herein or therein supersede all prior agreements and
understandings between the parties with respect to such subject matter.

 

Section 6.08          Governing Law.  This Agreement will be construed in
accordance with and governed by the laws of the State of Texas without regard to
principles of conflicts of laws.

 

Section 6.09          Waiver of Jury Trial.  Each party to this Agreement
irrevocably waives the right to a trial by jury in connection with any matter
arising out of this Agreement to the fullest extent permitted by applicable law.

 

Section 6.10          Execution in Counterparts.  This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

 

21

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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of
the date first above written.

 

 

CROSSTEX ENERGY, L.P.

 

 

 

By:

Crosstex Energy GP, LLC

 

 

(its General Partner)

 

 

 

 

 

 

 

By:

/s/ Michael J. Garberding

 

 

Michael J. Garberding

 

 

Senior Vice President and

 

 

Chief Financial Officer

 

[Signature Page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

 

MTP ENERGY MASTER FUND LTD

 

By:

MTP ENERGY MANAGEMENT LLC, its

 

 

investment manager

 

By:

MAGNETAR FINANCIAL LLC, its sole member

 

 

 

 

By:

/s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

 

 

 

 

MAGNETAR CAPITAL FUND II LP

 

By:

MAGNETAR FINANCIAL LLC, its general

 

 

partner

 

 

 

 

By:

/s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

 

 

 

 

HIPPARCHUS FUND LP

 

By:

MAGNETAR FINANCIAL LLC, its general

 

 

partner

 

 

 

 

By:

 /s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

 

 

 

 

MAGNETAR GLOBAL EVENT DRIVEN FUND LLC

 

By:

MAGNETAR FINANCIAL LLC, its manager

 

 

 

 

By:

 /s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

[Signature Page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

 

BLACKWELL PARTNERS LLC

 

By:

MAGNETAR FINANCIAL LLC, its investment

 

 

manager

 

 

 

 

By:

/s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

 

 

 

 

MAGNETAR STRUCTURED CREDIT FUND LP

 

By: MAGNETAR FINANCIAL LLC, its general
partner

 

 

 

 

By:

/s/ Doug Litowitz

 

 

Name:

Doug Litowitz

 

 

Title:

Counsel

 

[Signature Page to Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

Schedule A

 

Purchaser

 

Purchased Units

 

Allocated
Purchase Price

 

MTP Energy Master Fund Ltd.

 

1,518,750

 

$

22,097,812.50

 

Magnetar Capital Fund II LP

 

284,850

 

$

4,144,567.50

 

Hipparchus Fund LP

 

52,650

 

$

766,057.50

 

Magnetar Global Event Driven Fund LLC

 

313,875

 

$

4,566,881.25

 

Blackwell Partners LLC

 

192,375

 

$

2,799,056.25

 

Magnetar Structured Credit Fund LP

 

337,500

 

$

4,910,625.00

 

 

 

 

 

 

 

Total

 

2,700,000

 

$

39,285,000.00

 

 

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Exhibit A — Form of Opinion of Crosstex Counsel

 

Capitalized terms used but not defined herein have the meanings assigned to such
terms in the Common Unit Purchase Agreement, dated January 9, 2013 (the
“Purchase Agreement”), by and among Crosstex Energy, L.P. (“Crosstex”) and the
purchasers named therein (the “Purchasers”).  Crosstex shall furnish to the
Purchasers at the Closing an opinion of Baker Botts L.L.P., counsel for
Crosstex, addressed to the Purchasers and dated the Closing Date in form
satisfactory to Vinson & Elkins L.L.P., counsel for the Purchasers, and the
Purchasers, stating that:

 

(i)            Each of Crosstex and the General Partner is a limited partnership
or limited liability company existing and in good standing under the laws of the
State of Delaware with all necessary power and authority to (a) own or lease its
properties and to conduct its business in all material respects and (b) enter
into and perform their respective obligations under the Basic Documents, as
applicable, and, with respect to Crosstex, to offer, issue and sell the
Purchased Units as provided in the Purchase Agreement.

 

(ii)           The Registration Statement has become effective under the
Securities Act and, to such counsel’s knowledge, no stop order suspending the
effectiveness of the Registration Statement and no proceedings for that purpose
are pending or threatened under the Securities Act; and the Common Units are
registered under Section 12 of the Exchange Act.

 

(iii)          The Purchased Units to be issued and delivered to the Purchasers
by Crosstex pursuant to the Purchase Agreement have been duly authorized and,
when issued and delivered to the Purchasers against payment therefor in
accordance with the terms of the Partnership Agreement, will be validly issued,
fully paid (to the extent required by the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 17-303, 17-607 and 17-804 of the Delaware LP Act).

 

(iv)          No permit, consent, approval, authorization, order, registration,
filing or qualification (“consent”) under the Delaware LP Act, the Delaware LLC
Act, the federal law of the United States of America or the laws of the State of
Texas is required in connection with the offering, issuance and sale by Crosstex
of the Purchased Units, the execution, delivery and performance of the Purchase
Agreement by Crosstex or the consummation by Crosstex of the transactions
contemplated by the Purchase Agreement, except for such consents (i) required
under the Securities Act, the Exchange Act and state securities or “Blue Sky”
laws, as to which we do not express any opinion, (ii) that have been obtained or
made or (iii) that, if not obtained, would not, individually or in the
aggregate, have a Crosstex Material Adverse Effect.

 

(v)           Except as identified in the Crosstex SEC Documents and in
Section 5.12 of the Partnership Agreement, the holders of outstanding Common
Units are not are not entitled to statutory, preemptive or, to our knowledge,
other similar contractual rights pursuant to any agreement listed as an exhibit
to Crosstex’s Annual Report on Form 10-K for the year ended December 31, 2011 to
subscribe for the Purchased Units.

 

--------------------------------------------------------------------------------

 

(vi)          Crosstex is not, and after giving effect to the use of proceeds
from the sale of the Purchased Units pursuant to the Purchase Agreement will not
be, an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

 

(vii)         The Purchase Agreement has been duly authorized, executed and
delivered by Crosstex.

 

(viii)        The execution and delivery of the Purchase Agreement by Crosstex
and compliance by Crosstex with the terms and provisions thereof, and the
issuance and sale by Crosstex of the Purchased Units to the Purchasers in
accordance with the terms of the Purchase Agreement do not and will not,
assuming the accuracy of the representations and warranties of the Purchasers in
the Purchase Agreement and their compliance with the covenants contained
therein, (i) violate any provision of the Delaware LP Act, the Delaware LLC Act
or the federal laws of the United States, (ii) result in a violation or breach
of any provision of the Partnership Agreement or (iii) result in a violation or
breach of or constitute a default under any agreement filed or incorporated by
reference as an exhibit to Crosstex’s Annual Report on Form 10-K for the year
ended December 31, 2011 or Quarterly Reports on Form 10-Q filed since then
(provided that we express no opinion as to compliance with any financial
covenant or test or cross-default provision in any such agreement), except for
in the case of clauses (i), (ii) and (iii) any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, reasonably
be expected to have a Crosstex Material Adverse Effect; provided, however, that
no opinion is expressed pursuant to this paragraph pursuant to (a) any laws,
rules or regulations to which Crosstex may be subject as a result of the
Purchasers’ legal or regulatory status or the involvement of the Purchasers in
such transactions, (b) any laws, rules or regulations relating to
misrepresentations or fraud or (c) with respect to federal or state securities
laws, rules or regulations.

 

(ix)          The Partnership Agreement has been duly authorized and validly
executed and delivered by Crosstex and the General Partner, as the case may be,
and constitutes a valid and binding obligation of Crosstex and the General
Partner, as the case may be, enforceable against Crosstex and the General
Partner, as the case may be, in accordance with its terms, except as the
enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (B) public policy, applicable law relating
to fiduciary duties and indemnification and contribution and an implied covenant
of good faith and fair dealing.

 

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Exhibit B — Form of General Partner Waiver

 

January 14, 2013

 

Crosstex Energy GP, LLC (the “General Partner”), a Delaware limited liability
company and the general partner of Crosstex Energy, L.P. (the “Partnership”), in
its own capacity and in its capacity as the General Partner, hereby waives any
preemptive rights it may hold pursuant to Section 5.12 of the Sixth Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
March 23, 2007, as amended, solely with respect to the Partnership’s
privately-negotiated sale of 2,700,000 common units pursuant to the Common Unit
Purchase Agreement, dated as of January 9, 2013, by and among the Partnership
and each of the Purchasers set forth in Schedule A thereto.

 

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