Exhibit 10.1





Exhibit 10.1




EXECUTION VERSION




Crosstex Energy, L.P.




Crosstex Energy Finance Corporation




and




The Guarantors Listed on Schedule B-1




$ 725,000,000




8.875% Senior Notes due 2018




 


PURCHASE AGREEMENT




dated February 3, 2010



 


Banc of America Securities LLC

BNP Paribas Securities Corp.

RBC Capital Markets Corporation

Wells Fargo Securities, LLC

UBS Securities LLC

Goldman, Sachs & Co.

Morgan Stanley & Co. Incorporated




Joint Book-Running Managers



 


 









 





PURCHASE AGREEMENT




February 3, 2010

BANC OF AMERICA SECURITIES LLC

BNP PARIBAS SECURITIES CORP.

RBC CAPITAL MARKETS CORPORATION

WELLS FARGO SECURITIES, LLC

UBS SECURITIES LLC

GOLDMAN, SACHS & CO.

MORGAN STANLEY & CO. INCORPORATED

CAPITAL ONE SOUTHCOAST, INC.

BBVA SECURITIES INC.

COMERICA SECURITIES, INC.

U.S. BANCORP INVESTMENTS, INC.

c/o Banc of America Securities LLC

9 West 57th Street

New York, New York 10019

Ladies and Gentlemen:




Introductory. Crosstex Energy, L.P., a Delaware limited partnership (the “Company”),
and Crosstex Energy Finance Corporation, a Delaware corporation (“FinCo”), propose to issue
and sell to the several Initial Purchasers named in Schedule A (the “Initial Purchasers”),
acting severally and not jointly, the respective amounts listed on Schedule A hereto of
$725,000,000 aggregate principal amount of the Company’s and FinCo’s 8.875% Senior Notes due 2018
(the “Notes”). The Company and FinCo are referred to collectively as the
“Issuers.” Banc of America Securities LLC has agreed to act as the representative of the
several Initial Purchasers (the “Representative”) in connection with the offering and sale
of the Securities (as defined herein)



The Securities (as defined below) will be issued pursuant to an indenture, dated as of
February 10, 2010, (the “Indenture”), among the Company, FinCo, the Guarantors (as defined
below) and Wells Fargo Bank, National Association, as trustee (the “Trustee”). The
Securities will be issued only in book-entry form in the name of Cede & Co., as nominee of The
Depository Trust Company (the “Depositary”) pursuant to a blanket issuer letter of
representations among the Company, FinCo and the Depositary (the “DTC Agreement”).



The holders of the Securities will be entitled to the benefits of a registration rights
agreement, dated as of February 10, 2010 (the “Registration Rights Agreement”), among the
Issuers, the Guarantors and the Initial Purchasers, pursuant to which the Issuers and the
Guarantors will agree to file with the Commission (as defined below), under the circumstances set
forth therein, (i) a registration statement under the Securities Act (as defined below) relating to
another series of debt securities of the Issuers with terms substantially identical to the
Securities (the “Exchange Securities”) to be offered in exchange for the Securities (the
“Exchange Offer”) and (ii) to the extent required by the Registration Rights Agreement, a
shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by
certain



 


 









 






holders of the Securities, and in each case, to use their commercially reasonable efforts to
cause such registration statements to be declared effective.



The payment of principal of, premium and Additional Interest (as defined in the Indenture), if
any, and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured
basis, jointly and severally by (i) the guarantors listed in Schedule B-1 hereto and (ii) any
subsidiary of the Company formed or acquired after the Closing Date (as defined herein) that
executes an additional guarantee in accordance with the terms of the Indenture, and their
respective successors and assigns (such persons referred to in clauses (i) and (ii) are
collectively referred to as the “Guarantors”), pursuant to their guarantees (the
“Guarantees”). The Notes and the Guarantees attached thereto are herein collectively
referred to as the “Securities.”



The Guarantors, together with Crosstex LIG, LLC and Crosstex Tuscaloosa LLC, are referred to
as the “Subsidiaries.” The Issuers, the Subsidiaries and Crosstex Energy GP, L.P., a
Delaware limited partnership (the “General Partner”), are referred to collectively as the
“Crosstex Parties.”



The Issuers understand that the Initial Purchasers propose to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing Disclosure Package
(as defined below) and agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent
Purchasers”) on the terms set forth in the Pricing Disclosure Package (the first time when
sales of the Securities are made is referred to as the “Time of Sale”). The Securities are
to be offered and sold to or through the Initial Purchasers without being registered with the
Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933 (as
amended, the “Securities Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder), in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors who acquire Securities shall
be deemed to have agreed that Securities may only be resold or otherwise transferred, after the
date hereof, if such Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A under the Securities Act (“Rule 144A”) or Regulation S under the
Securities Act (“Regulation S”)).



The Issuers have prepared and delivered to each Initial Purchaser copies of a Preliminary
Offering Memorandum, dated January 26, 2010 (the “Preliminary Offering Memorandum”), and
have prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated
February 3, 2010 (the “Pricing Supplement”), describing the terms of the Securities, each
for use by such Initial Purchaser in connection with its solicitation of offers to purchase the
Securities. The Preliminary Offering Memorandum and the Pricing Supplement are herein referred to
as the “Pricing Disclosure Package.” Promptly after this Agreement is executed and
delivered, the Issuers will prepare and deliver to each Initial Purchaser a final offering
memorandum dated the date hereof (the “Final Offering Memorandum”).



All references herein to the terms “Pricing Disclosure Package” and “Final Offering
Memorandum” shall be deemed to mean and include all information filed under the Securities



 


2









 






Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein,
includes the rules and regulations of the Commission promulgated thereunder) prior to the Time of
Sale and incorporated by reference in the Pricing Disclosure Package (including the Preliminary
Offering Memorandum) or the Final Offering Memorandum (as the case may be), and all references
herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Offering
Memorandum shall be deemed to mean and include all information filed under the Exchange Act after
the Time of Sale and incorporated by reference in the Final Offering Memorandum.



The Issuers and the Guarantors hereby confirm their agreements with the Initial Purchasers as
follows:



SECTION 1. Representations and Warranties. Each of the Issuers and the Guarantors, jointly
and severally, hereby represents and warrants to each Initial Purchaser that, as of the date hereof
and as of the Closing Date (references in this Section 1 to the “Offering Memorandum” are
to (x) the Pricing Disclosure Package in the case of representations and warranties made as of the
date hereof and (y) the Final Offering Memorandum in the case of representations and warranties
made as of the Closing Date):



(a) No Registration Required. Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof and with the procedures set forth in
Section 7 hereof, it is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by
this Agreement, the Pricing Disclosure Package and the Final Offering Memorandum to register the
Securities under the Securities Act or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture
Act of 1939 (the “Trust Indenture Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).



(b) No Integration of Offerings or General Solicitation. None of the Issuers, their
respective affiliates (as such term is defined in Rule 501 under the Securities Act) (each, an
“Affiliate”), or any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Issuers make no representation or warranty) has, directly or indirectly,
solicited any offer to buy or offered to sell, or will, directly or indirectly, solicit any offer
to buy or offer to sell, in the United States or to any United States citizen or resident, any
security which is or would be integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the Securities Act. None of the Issuers, their
respective Affiliates, or any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Issuers make no representation or warranty) have engaged or will engage,
in connection with the offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502 under the Securities Act. With respect to those
Securities sold in reliance upon Regulation S, (i) none of the Issuers, their respective Affiliates
or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the
Issuers make no representation or warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each of the Issuers and their respective
Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to
whom the Issuers make no representation or warranty) has complied and will comply with the offering
restrictions set forth in Regulation S.


 


3









 





(c) Eligibility for Resale under Rule 144A. The Securities are eligible for resale pursuant
to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.



(d) The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing Disclosure
Package, as of the Time of Sale, nor the Final Offering Memorandum, as of its date or (as amended
or supplemented in accordance with Section 3(a), as applicable) as of the Closing Date, contains or
represents an untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that this representation and warranty shall not apply to statements in or
omissions from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or
supplement thereto made in reliance upon and in conformity with information furnished to the
Issuers in writing by any Initial Purchaser through Banc of America Securities LLC expressly for
use in the Pricing Disclosure Package, the Final Offering Memorandum or amendment or supplement
thereto, as the case may be. The Pricing Disclosure Package contains, and the Final Offering
Memorandum will contain, all the information specified in, and meeting the requirements of, Rule
144A.



(e) Company Additional Written Communications. The Issuers have not prepared, made, used,
authorized, approved or distributed and will not prepare, make, use, authorize, approve or
distribute any written communication that constitutes an offer to sell or solicitation of an offer
to buy the Securities (each such communication by the Issuers or their respective agents and
representatives (other than a communication referred to in clauses (i) and (ii) below) a
“Company Additional Written Communication”) other than (i) the Pricing Disclosure Package,
(ii) the Final Offering Memorandum, and (iii) any electronic road show or other written
communications, in each case used in accordance with Section 3(a). Each such Company Additional
Written Communication, when taken together with the Pricing Disclosure Package, did not, and at the
Closing Date will not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this representation and warranty shall not
apply to statements in or omissions from each such Company Additional Written Communication made in
reliance upon and in conformity with information furnished to the Issuers in writing by any Initial
Purchaser through Banc of America Securities LLC expressly for use in any Company Additional
Written Communication.



(f) Incorporated Documents. The documents incorporated by reference in the Pricing Disclosure
Package or the Final Offering Memorandum, as the case may be, when they became effective or were
filed with the Commission, as the case may be (collectively, the “Incorporated Documents”),
conformed in all material respects to the applicable requirements of the Securities Act or the
Exchange Act, as applicable. Any further documents so filed and incorporated by reference in the
Pricing Disclosure Package or the Final Offering Memorandum or any further amendment or supplement
thereto, when such documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the applicable requirements of the Securities Act or the
Exchange Act, as applicable.


 


4









 





(g) The Purchase Agreement. This Agreement has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Issuers and the Guarantors, enforceable in
accordance with its terms, except as the enforcement hereof may be limited by (i) 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 (ii) public
policy, applicable law relating to fiduciary duties and indemnification and contribution and an
implied covenant of good faith and fair dealing.



(h) Partnership Agreement. The Partnership Agreement (as defined below) has been duly
authorized, executed and delivered by the General Partner and, assuming due authorization,
execution and delivery by the other parties thereto, is a valid and legally binding agreement of
the General Partner, enforceable against the General Partner in accordance with its terms;
provided, however, that the enforceability thereof may be limited by (i) 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 (ii) public policy,
applicable law relating to fiduciary duties and indemnification and contribution and an implied
covenant of good faith and fair dealing.



(i) Subsidiary Operating Agreements. The certificate of incorporation, certificate of
formation, bylaws, limited liability company agreement, limited partnership agreement or other
organizational documents, as applicable, of the Subsidiaries (collectively, the “Subsidiary
Operating Agreements” and, together with the Partnership Agreement, the “Operating
Agreements”) have been duly authorized, executed and delivered by the Crosstex Parties that are
parties thereto, as applicable, and are valid and legally binding agreements of the respective
parties thereto, enforceable against the Crosstex Parties that are parties thereto, as applicable,
in accordance with their terms; provided, however, that the enforceability thereof may be limited
by (i) 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 (ii) public policy, applicable law relating to fiduciary duties and indemnification and
contribution and an implied covenant of good faith and fair dealing.




(j) Formation and Qualification.




(i) The Company has been duly formed and is validly existing in good standing as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(“Delaware LP Act”) with full partnership power and authority to own or lease its
properties and to conduct its business in all material respects as described in the Pricing
Disclosure Package and the Final Offering Memorandum.




(ii) The General Partner has been duly formed and is validly existing in good standing
as a limited partnership under the Delaware LP Act with full partnership power and authority
to own or lease its properties, to conduct its business and to act as a general partner of
the Company in all material respects as described in the Pricing Disclosure Package and the
Final Offering Memorandum.


 


5









 






(iii) FinCo has been duly formed and is validly existing in good standing as a
corporation under the Delaware General Corporation Law with full corporate power and
authority to own or lease its properties and to conduct its business in all material
respects as described in the Pricing Disclosure Package and the Final Offering Memorandum.




(iv) Each of the Subsidiaries has been duly formed and is validly existing in good
standing under the laws of its respective jurisdiction of formation, with all corporate,
limited liability company or partnership, as the case may be, power and authority necessary
to own or lease its properties and conduct its business, in each case, in all material
respects as described in the Pricing Disclosure Package and the Final Offering Memorandum.




(v) Each of the Crosstex Parties is duly registered or qualified as a foreign
corporation, limited liability company or limited partnership, as the case may be, for the
transaction of business under the laws of each jurisdiction in which the character of the
business conducted by it or the nature or location of the properties owned or leased by it
makes such registration or qualification necessary, except where the failure to register or
qualify would not (i) cause a Material Adverse Change (as defined below) on the business,
prospects, financial condition or results of operations of the Crosstex Parties, taken as a
whole or (ii) subject the limited partners of the Partnership to any material liability or
disability.




(k) Ownership.




(i) The General Partner is the sole general partner of the Company with a 2% general
partner interest in the Company; such general partner interest has been duly authorized and
validly issued in accordance with the Sixth Amended and Restated Agreement of Limited
Partnership of the Company (as amended, the “Partnership Agreement”); and the
General Partner owns its general partner interest free and clear of all liens, encumbrances
(except restrictions on transferability contained in Section 4.6 of the Partnership
Agreement or as described in the Pricing Disclosure Package and the Final Offering
Memorandum), security interests, equities, charges or claims.




(ii) The issued and outstanding limited partner interests of the Company consist of
49,676,125 Common Units 14,705,882 Series A Preferred Units and the incentive distribution
rights, as defined in the Partnership Agreement (the “Incentive Distribution
Rights”). 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 Sections 17-303, 17-607 and 17-804 of the Delaware
LP Act).




(iii) Crosstex Energy, Inc., a Delaware corporation (“CEI”), owns 16,414,830
units (the “Sponsor Units”), and the General Partner owns all of the Incentive
Distribution Rights. CEI owns the Sponsor Units and the General Partner owns the Incentive
Distribution Rights free and clear of all liens, encumbrances (except with


 


6









 






respect to the Incentive Distribution Rights, restrictions on transferability contained
in Section 4.7 of the Partnership Agreement or as described in the Pricing Disclosure
Package and the Final Offering Memorandum), security interests, equities, charges or claims.




(iv) Crosstex Operating GP, LLC, a Delaware limited liability company (the
“Operating GP”), is the sole general partner of Crosstex Energy Services, L.P., a
Delaware limited partnership (the “Operating Company”), with a .001% general partner
interest in the Operating Company; such general partner interest has been duly authorized
and validly issued in accordance with the partnership agreement of the Operating Company
(the “Operating Company Agreement”); Operating GP owns such general partner interest
free and clear of all liens, encumbrances (except restrictions on transferability contained
in Article IV of the Operating Company Agreement or as described in the Pricing Disclosure
Package and the Final Offering Memorandum), security interests, equities, charges or claims,
except for such liens, encumbrances, security interests, equities, charges and claims
arising under (i) the Fourth Amended and Restated Credit Agreement, dated as of November 1,
2005 (as amended prior to the date hereof and as amended and restated on or prior to the
Closing Date, the “Credit Agreement”), among the Partnership, Bank of America, N.A.,
as administrative and collateral agent, and certain other parties and (ii) the Amended and
Restated Note Purchase Agreement, dated as of July 25, 2006 among the Company, the Operating
Company, Prudential Investment Management, Inc. and certain other parties (as the same has
been amended prior to the date hereof and together with the notes issued thereunder, the
“Master Shelf Agreement”); the Company is the sole limited partner of the Operating
Company with a 99.999% limited partner interest in the Operating Company; such limited
partner interest has been duly authorized and validly issued in accordance with the
Operating Company Agreement and is fully paid (to the extent required under the Operating
Company Agreement) and nonassessable (except as such nonassessability may be affected by
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act); and the Company owns such
limited partner interest free and clear of all liens, encumbrances (except restrictions on
transferability contained in Article IV of the Operating Company Agreement or as described
in the Pricing Disclosure Package), security interests, equities, charges or claims, except
for such liens, encumbrances, security interests, equities, charges and claims arising under
the Credit Agreement and the Master Shelf Agreement.




(v) The Company owns 100% of the issued and outstanding membership interests in
Operating GP; such membership interests have been duly authorized and validly issued in
accordance with the limited liability company agreement of Operating GP (as the same may be
amended or restated on or prior to the Closing Date, the “Operating GP LLC
Agreement”) and are fully paid (to the extent required under the Operating GP LLC
Agreement) and nonassessable (except as such nonassessability may be affected by Sections
18-607 and 18-804 of the Delaware LLC Act); and the Company owns such membership interest
free and clear of all liens, encumbrances (except restrictions on transferability as
described in the Pricing Disclosure Package and the Final Offering Memorandum or as
otherwise contained in the Operating GP LLC Agreement), security interests, equities,
charges or claims, except for such liens, encumbrances,


 


7









 






security interests, equities, charges and claims arising under the Credit Agreement and
the Master Shelf Agreement.




(vi) All of the outstanding partnership interests or membership interests or shares, as
the case may be, of each of the Subsidiaries (other than Operating GP and the Operating
Company) have been duly and validly authorized and issued, and are fully paid (to the extent
required under the applicable certificate of incorporation, limited partnership agreement or
limited liability company agreement of each Subsidiary) and nonassessable (except as such
nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP
Act, Sections 153.202 and 153.210 of the Texas Business Organizations Code (the
“TBOC”) or comparable sections of Louisiana limited partnership statutes, as
applicable, in the case of partnership interests, or Sections 18-607 and 18-804 of the
Delaware LLC Act, Section 101.206 of the TBOC or comparable sections of Louisiana LLC
statutes, as applicable, in the case of membership interests). The Operating Company
directly or indirectly owns the partnership interests or membership interests in each
Subsidiary (other than Operating GP and the Operating Company) free and clear of all liens,
encumbrances (except restrictions on transferability as described in the Final Offering
Memorandum and Pricing Disclosure Package or as otherwise contained in the applicable
limited partnership agreement or limited liability company agreement of each Subsidiary),
security interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges and claims arising under the Credit Agreement and the
Master Shelf Agreement.




(vii) Crosstex Energy GP, LLC, a Delaware limited liability company (“GP LLC”),
is the sole general partner of the General Partner with a .001% general partner interest in
the General Partner; such general partner interest has been duly authorized and validly
issued in accordance with the partnership agreement of the General Partner (as the same may
be amended and restated on or prior to the Closing Date, the “General Partner
Partnership Agreement” and, together with the Partnership Agreement, the Operating
Company Agreement and the Operating GP LLC Agreement, the “Operative Agreements”);
GP LLC owns such general partner interest free and clear of all liens, encumbrances (except
restrictions on transferability as described in the Final Offering Memorandum and Pricing
Disclosure Package or as otherwise contained in the General Partner Partnership Agreement),
security interests, equities, charges or claims; CEI is the sole limited partner of the
General Partner with a 99.999% limited partner interest in the General Partner; such limited
partner interest has been duly authorized and validly issued in accordance with the General
Partner Partnership Agreement and is fully paid (to the extent required under the General
Partner Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act); and CEI owns such
limited partner interest free and clear of all liens, encumbrances (except restrictions on
transferability as described in the Final Offering Memorandum and Pricing Disclosure Package
or as otherwise contained in the General Partner Partnership Agreement), security interests,
equities, charges or claims.




(viii) CEI owns 100% of the issued and outstanding membership interests in GP LLC; such
membership interests have been duly authorized and validly issued in accordance with the
limited liability company agreement of GP LLC (as the same may be


 


8









 






amended or restated on or prior to Closing Date, the “GP LLC
Agreement”) and are fully paid (to the extent required under the GP LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804
of the Delaware LLC Act); and CEI owns its membership interests free and clear of all liens,
encumbrances (except restrictions on transferability as described in the Pricing Disclosure
Package or as otherwise contained in the GP LLC Agreement), security interests, equities,
charges or claims.




(ix) The Company has no direct or indirect subsidiaries other than the Subsidiaries
that, individually or in the aggregate, would be deemed a “significant subsidiary” as such
term is defined in Rule 405 promulgated under the Securities Act.



(l) The Registration Rights Agreement and DTC Agreement. The Registration Rights Agreement
has been duly authorized and, on the Closing Date, will have been duly executed and delivered by,
and (assuming the valid execution and delivery thereof by the Initial Purchasers) will constitute a
valid and binding agreement of, the Issuers and the Guarantors, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by (i) 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 (ii) public policy,
applicable law relating to fiduciary duties and indemnification and contribution and an implied
covenant of good faith and fair dealing. The DTC Agreement has been duly authorized and, on the
Closing Date, will have been duly executed and delivered by, and (assuming the valid execution and
delivery thereof by the Depository) will constitute a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as the enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law) and
(ii) public policy, applicable law relating to fiduciary duties and indemnification and
contribution and an implied covenant of good faith and fair dealing.



(m) Authority and Authorization. The Issuers have all requisite corporate or limited
partnership power and authority to issue, sell and deliver the Notes, and each Guarantor has all
requisite corporate, limited liability company or limited partnership, as the case may be, power
and authority to issue the Guarantees. Each of the Issuers and the Guarantors has all requisite
corporate, limited liability company or limited partnership, as the case may be, power and
authority to enter into this Agreement and to perform its respective obligations thereunder. At
the Closing Date, all corporate, limited partnership and limited liability company action, as the
case may be, required to be taken by the Issuers and the Guarantors or any of their owners, members
or partners for the authorization, issuance, sale and delivery of the Securities as contemplated by
this Agreement shall have been validly taken.



(n) Authorization of the Indenture. The Indenture has been duly authorized by the Issuers and
the Guarantors and, at the Closing Date, will have been duly executed and delivered by the Issuers
and the Guarantors and, assuming the due authorization, execution and delivery by the Trustee, will
constitute a valid and binding agreement of the Issuers and the Guarantors, enforceable against the
Issuers and the Guarantors in accordance with its terms, except as the



 


9









 






enforcement thereof may be limited by (i) 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 (ii) public policy, applicable law relating to
fiduciary duties and indemnification and contribution and an implied covenant of good faith and
fair dealing.



(o) Description of the Securities and the Indenture. The Securities, the Exchange Securities
and the Indenture will conform in all material respects to the respective statements relating
thereto contained in the Pricing Disclosure Package and the Final Offering Memorandum.



(p) No Material Adverse Change. Except as set forth in the Pricing Disclosure Package and the
Final Offering Memorandum, subsequent to the respective dates as of which information is given
therein, there has not been: (i) any material adverse change in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Crosstex Parties, taken as a whole (a
“Material Adverse Change”); (ii) any transaction which is material to the Crosstex Parties
taken as a whole; (iii) any obligation or liability, direct, indirect or contingent (including any
off-balance sheet obligations), incurred by any of the Crosstex Parties, which is material to the
Crosstex Parties taken as a whole; or (iv) any dividend or distribution of any kind declared, paid
or made by the Crosstex Parties or, in respect of membership or partnership interests in any of the
Crosstex Parties, except for dividends paid to the Crosstex Parties on any class of capital stock
or repurchase or redemption by the Crosstex Parties of any class of capital stock.



(q) Independent Accountants. KPMG LLP, which expressed its opinion with respect to the
financial statements (which term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission and included in the Pricing Disclosure Package and
the Final Offering Memorandum are independent public or certified public accountants within the
meaning of Regulation S-X under the Securities Act and the Exchange Act and the rules of the Public
Company Accounting Oversight Board.



(r) Preparation of the Financial Statements. The historical consolidated financial statements
(including the related notes and supporting schedules) included or incorporated by reference in the
Pricing Disclosure Package or the Final Offering Memorandum (and any amendment or supplement
thereto) present fairly in all material respects the financial condition and results of operations
of the entities purported to be shown thereby on the basis stated therein, at the dates and for the
periods indicated, and have been prepared in conformity with U.S. generally accepted accounting
principles applied on a consistent basis throughout the periods involved. The summary historical
and pro forma consolidated financial and operating information set forth or incorporated by
reference in the Pricing Disclosure Package and the Final Offering Memorandum (and any amendment or
supplement thereto) is presented fairly in all material respects and prepared on a basis consistent
with the audited and unaudited historical consolidated financial statements and pro forma financial
statements, as applicable, from which it has been derived. The unaudited pro forma financial
statements of the Company included or incorporated by reference in the Pricing Disclosure Package
and the Final Offering Memorandum (and any amendment or supplement thereto) have been prepared in
all material



 


10









 






respects in accordance with the applicable requirements of Article 11 of Regulation S-X of the
Securities Act. The assumptions used in the preparation of such unaudited pro forma financial
statements are, in the opinion of the management of the Company, reasonable. The pro forma
adjustments reflected in such unaudited pro forma financial statements have been properly applied
to the historical amounts in compilation of such unaudited pro forma financial statements. The
other financial and statistical data contained or incorporated by reference in the Pricing
Disclosure Package and the Final Offering Memorandum are accurately and fairly presented and
prepared on a basis consistent with the financial statements and books and records of the Company.
There are no financial statements (historical or pro forma) that are required to be included or
incorporated by reference in the Pricing Disclosure Package and the Final Offering Memorandum that
are not included or incorporated by reference as required. The Company and its Subsidiaries do not
have any material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations), not described in the Pricing Disclosure Package and the Final Offering Memorandum;
and all disclosures contained or incorporated by reference in the Pricing Disclosure Package and
the Final Offering Memorandum regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item
10 of Regulation S-K under the Securities Act, to the extent applicable.




(s) No Conflicts; No Consents.




(i) None of the offering, issuance and sale of the Securities by the Issuers and the
Guarantors, respectively, the execution, delivery and performance of the Securities, the
Exchange Securities, the Indenture, the Registration Rights Agreement or this Agreement by
the Crosstex Parties or the consummation of the transactions contemplated hereby or thereby
(i) conflicts or will conflict with or constitutes or will constitute a violation of the
certificate of incorporation, limited partnership, formation or organization of any of the
Crosstex Parties, as applicable, or any of their respective Operating Agreements, (ii)
conflicts or will conflict with or constitutes or will constitute a breach or violation of,
or a default under (or an event which, with notice or lapse of time or both, would
constitute such a default), any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which any of the Crosstex Parties is a party or by which
any of them or any of their respective properties may be bound, (iii) violates or will
violate any statute, law or regulation or any order, judgment, decree or injunction of any
court or governmental agency or body having jurisdiction over any of the Crosstex Parties or
any of their respective properties in a proceeding to which any of them or their property is
or was a party or (iv) results or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Crosstex Parties (other than
liens created pursuant to the Credit Agreement and the Master Shelf Agreement), which
conflicts, breaches, violations, defaults or liens, in the case of clauses (ii), (iii) or
(iv), would have, individually or in the aggregate, a Material Adverse Change.




(ii) Except for (i) such consents, approvals, authorizations, orders, filings,
registrations or qualifications as may be required (A) under applicable state securities or
“Blue Sky” laws in connection with the purchase and resale of the Securities by the Initial
Purchasers and (B) with respect to the Exchange Securities under the Securities Act, the
Trust Indenture Act and applicable state securities or “Blue
Sky” laws as contem-


 


11









 






plated by the Registration Rights Agreement, (ii) such consents that have been, or
prior to the Closing Date will have been, obtained and (iii) such consents that, if not
obtained, would not, individually or in the aggregate, have a Material Adverse Change, no
consent, approval, authorization or order of, or filing or registration with, any court or
governmental agency or body having jurisdiction over any of the Crosstex Parties or any of
their respective properties is required in connection with the offering, issuance and sale
of the Securities by the Crosstex Parties in the manner contemplated herein or in the
Pricing Disclosure Package and the Final Offering Memorandum, the execution, delivery and
performance of this Agreement, the Indenture, the Securities and the Registration Rights
Agreement by the Crosstex Parties or the consummation by the Crosstex Parties of the
transactions contemplated hereby or thereby.



(t) No Material Actions or Proceedings. Except as otherwise described in the Pricing
Disclosure Package and the Final Offering Memorandum, there is no action, suit or proceeding before
or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now
pending or, to the knowledge of the Crosstex Parties, threatened, to which any of the Crosstex
Parties is or may be a party or to which the business or property of any of the Crosstex Parties is
or may be subject that is reasonably likely to have a Material Adverse Change or prevent the
consummation of the transactions contemplated by this Agreement.



(u) Title to Properties. The Crosstex Parties have good and indefeasible title to all real
property and good title to all personal property described in the Pricing Disclosure Package and
the Final Offering Memorandum as owned by the Crosstex Parties, free and clear of all liens,
claims, security interests, or other encumbrances, except (i) as described, and subject to
limitations contained, in the Pricing Disclosure Package and the Final Offering Memorandum or (ii)
such as do not materially interfere with the use of such properties taken as a whole as they have
been used in the past and are proposed to be used in the future as described in the Pricing
Disclosure Package and the Final Offering Memorandum, except, in each case, for such liens,
security interests, claims and encumbrances arising under the Credit Agreement and the Master Shelf
Agreement.



(v) Tax Law Compliance. Each of the Crosstex Parties has filed (or has obtained extensions
with respect to) all material federal, state and foreign income and franchise tax returns required
to be filed through the date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes shown to be due, if any, pursuant to such returns, other
than those (i) which are being contested in good faith and for which adequate reserves have been
established in accordance with generally accepted accounting principles or (ii) which, if not paid,
would not have a Material Adverse Change.



(w) Not an “Investment Company”. None of the Crosstex Parties or any of their respective
subsidiaries is now, and after the sale of the Securities to be sold by the Issuers hereunder and
the application of the net proceeds from such sale as described in the Pricing Disclosure Package
and the Final Offering Memorandum under the caption “Use of Proceeds” will be, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.


 


12









 





(x) Insurance. The Crosstex Parties maintain insurance covering their properties, operations,
personnel and businesses against such losses and risks and in such amounts as are reasonably
adequate for the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in similar industries.
None of the Crosstex Parties has received notice from any insurer or agent of such insurer that
substantial capital improvements (relating to the Company and its subsidiaries on a consolidated
basis) or other substantial expenditures will have to be made in order to continue such insurance,
and all such insurance is outstanding and duly in force on the date hereof and will be outstanding
and duly in force at the Closing Date.



(y) No Price Stabilization or Manipulation. None of the Crosstex Parties has taken and or
will take, directly or indirectly, any action designed to or that might be reasonably expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Issuers to facilitate the sale or resale of the Securities.



(z) No Conflict with Money Laundering Laws. The operations of the Crosstex Parties and their
respective subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines
issued, administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the he Crosstex Parties or any of their
respective subsidiaries with respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.



(aa) No Conflict with OFAC Laws. None of the Crosstex Parties or any of their respective
subsidiaries, or, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Crosstex Parties or any of their respective subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Issuers will not directly or indirectly use the proceeds of
the offering of sale of the Securities, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered by
OFAC.



(bb) Compliance with Sarbanes-Oxley. The Issuers and their respective officers and directors
are in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).



(cc) Issuers’ Accounting System. The Crosstex Parties maintain a system of accounting
controls that is sufficient to provide reasonable assurances that: (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general or



 


13









 






specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.



(dd) Disclosure Controls and Procedures. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rules 13a-15 and 15d-14 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that material information
relating to the Company and its subsidiaries is made known to the chief executive officer and chief
financial officer of the Company by others within the Company or any of its subsidiaries, and such
disclosure controls and procedures are effective in all material respects to perform the functions
for which they were established subject to the limitations of any such control system.



(ee) Compliance with Environmental Laws. Except as set forth in the Pricing Disclosure
Package and the Final Offering Memorandum, the Crosstex Parties (i) are in compliance with any and
all applicable federal, state and local laws and regulations relating to the protection of human
health and safety and the environment or imposing liability or standards of conduct concerning any
Hazardous Materials (as defined below) (“Environmental Laws”), (ii) have received all
permits required of them under applicable Environmental Laws to conduct their respective
businesses, (iii) are in compliance with all terms and conditions of any such permits and (iv) do
not have any liability in connection with the release into the environment of any Hazardous
Material, except where such noncompliance with Environmental Laws, failure to receive required
permits, failure to comply with the terms and conditions of such permits or liability would not,
individually or in the aggregate, have a Material Adverse Change. The term “Hazardous Material”
means (A) any “hazardous substance” as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any “hazardous waste” as defined in the
Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of any other
Environmental Law.



(ff) Permits. Each of the Crosstex Parties has, and at the Closing Date will have, such
permits, consents, licenses, franchises, certificates and authorizations of governmental or
regulatory authorities (“permits”) as are necessary to own its properties and to conduct
its business in the manner described in the Pricing Disclosure Package and the Final Offering
Memorandum, subject to such qualifications as may be set forth therein and except for such permits
which, if not obtained, would not, individually or in the aggregate, have a Material Adverse
Change. Except as set forth in the Pricing Disclosure Package and the Final Offering Memorandum,
each of the Crosstex Parties has, or at the Closing Date will have, fulfilled and performed all its
material obligations with respect to such permits which are or will be due to have been fulfilled
and performed by such date and no event has occurred that would prevent the permits from being
renewed or reissued or which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of the holder of any such permit,
except for such non-renewals, non-issues, revocations, terminations and impairments that would not,
individually or in the aggregate, have a Material Adverse Change. Except as described in the
Pricing Disclosure Package and the Final Offering Memorandum, none of such permits contains, or at
the Closing Date will contain, any restriction that is



 


14









 






materially burdensome to the Crosstex Parties and their respective subsidiaries considered as
a whole.



(gg) No Labor Disturbance. No labor disturbance by the employees of the Crosstex Parties
exists or, to the knowledge of the Company, is imminent or threatened that is reasonably likely to
have a Material Adverse Change.



(hh) Related Party Transactions. No relationship, direct or indirect, exists between or among
any of the Issuers or any affiliate of the Issuers, on the one hand, and any director, officer,
member, stockholder, customer or supplier of the Issuers or any affiliate of the Issuers, on the
other hand, which is required by the Securities Act to be disclosed in a registration statement on
Form S-1 which is not so disclosed in the Final Offering Memorandum (or the documents incorporated
by reference therein). There are no outstanding loans, advances (except advances for business
expenses in the ordinary course of business) or guarantees of indebtedness by the Issuers or any
affiliate of the Issuers to or for the benefit of any of the officers or directors of the Issuers
or any affiliate of the Issuers or any of their respective family members.



(ii) No Unlawful Contributions or Other Payments. None of the Crosstex Parties nor, to the
best of the Company’s knowledge, any employee or agent of the Crosstex Parties, has made any
contribution or other payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character necessary to be disclosed in Pricing Disclosure
Package and the Final Offering Memorandum in order to make the statements therein not misleading.



(jj) Regulations T, U, X. Neither the Issuers nor any Guarantor nor any of their respective
subsidiaries nor any agent thereof acting on their behalf has taken, and none of them will take,
any action that might cause this Agreement or the issuance or sale of the Securities to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.



(kk) ERISA Compliance. Except as otherwise disclosed in the Pricing Disclosure Package and
the Final Offering Memorandum, the Crosstex Parties, their subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income Security Act of 1974 (as amended, “ERISA,”
which term, as used herein, includes the regulations and published interpretations thereunder))
established or maintained by the Crosstex Parties, their subsidiaries or their “ERISA Affiliates”
(as defined below) are in compliance in all material respects with ERISA, except where the failure
to comply would not have a Material Adverse Change. “ERISA Affiliate” means, with respect to the
Crosstex Parties, any member of any group of organizations described in Section 414 of the Internal
Revenue Code of 1986 (as amended, the “Code,” which term, as used herein, includes the regulations
and published interpretations thereunder) with which the Crosstex Parties or such subsidiary is
treated as a single employer. No “reportable event” (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any “employee benefit plan” established or maintained
by the Crosstex Parties, their subsidiaries or any of their ERISA Affiliates. No “employee benefit
plan” established or maintained by the Crosstex Parties, their subsidiaries or any of their ERISA
Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded
benefit liabilities” (as defined under ERISA). Neither any of the Crosstex Parties, their
subsidiaries nor



 


15









 






any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code except for such liability as would not
have a Material Adverse Change. Each “employee benefit plan” established or maintained by the
Crosstex Parties, their subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401 of the Code is so qualified and nothing has occurred, whether by action
or failure to act, which would cause the loss of such qualification.



(ll) New Bank Credit Facility. The new bank credit facility (as defined in the Pricing
Disclosure Package and Final Offering Memorandum) has been duly and validly authorized by the
Company and the Guarantors party thereto and, assuming the due authorization, execution and
delivery by the Administrative Agent (as defined therein) the L/C Issuer (as defined therein) and
the Lenders (as defined therein) when duly executed and delivered by the Company, will be the valid
and legally binding obligation of the Company, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to
fiduciary duties and indemnification and contribution and an implied covenant of good faith and
fair dealing.




SECTION 2. Purchase, Sale and Delivery of the Securities.



(a) The Securities. Each of the Issuers and the Guarantors agrees to issue and sell to the
Initial Purchasers, severally and not jointly, all of the Securities, and the Initial Purchasers
agree, severally and not jointly, to purchase from the Issuers and the Guarantors the aggregate
principal amount of Securities set forth opposite their names on Schedule A, at a purchase price of
95.407% of the principal amount thereof payable on the Closing Date, in each case, on the basis of
the representations, warranties and agreements herein contained, and upon the terms, subject to the
conditions thereto, herein set forth.



(b) The Closing Date. Delivery of certificates for the Securities in definitive form to be
purchased by the Initial Purchasers and payment therefor shall be made at the offices of Vinson &
Elkins LLP, First City Tower, 1001 Fannin Street, Suite 2500, Houston, Texas 77002-6760 (or such
other place as may be agreed to by the Company and Banc of America Securities LLC) at 9:00 a.m. New
York City time, on February 10, 2010, or such other time and date as Banc of America Securities LLC
shall designate by notice to the Company (the time and date of such closing are called the
“Closing Date”).



(c) Delivery of the Securities. The Issuers shall deliver, or cause to be delivered, through
the facilities of the Depositary, to Banc of America Securities LLC for the accounts of the several
Initial Purchasers, the Securities at the Closing Date against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price therefor. The
Securities shall be in global form and in such denominations and registered in the name of Cede &
Co., as nominee of the Depositary, pursuant to the DTC Agreement, and shall be delivered at the
Closing Date to the Trustee, as custodian for the Depositary. Time shall be of the essence,



 


16









 






and delivery at the time and place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.



(d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser severally
and not jointly represents and warrants to, and agrees with, the Issuers that:




(i) it is a “qualified institutional buyer” within the meaning of Rule 144A (a
“Qualified Institutional Buyer”); and




(ii) it has not offered or sold, and will not offer or sell, any Securities, except (i)
within the United States, to those persons it reasonably believes to be Qualified
Institutional Buyers and that, in connection with each sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware that such sale is
being made in reliance on Rule 144A or (ii) in accordance with the restrictions set forth in
Annex I hereto.



SECTION 3. Additional Covenants. Each of the Issuers and the Guarantors further covenants and
agrees with each Initial Purchaser as follows:



(a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of Proposed
Amendments and Supplements and Company Additional Written Communications. As promptly as
practicable following the Time of Sale and in any event not later than the second business day
following the date hereof, the Issuers will prepare and deliver to the Initial Purchasers the Final
Offering Memorandum, which shall consist of the Preliminary Offering Memorandum as modified only by
the information contained in the Pricing Supplement. The Issuers will not amend or supplement the
Preliminary Offering Memorandum or the Pricing Supplement. The Issuers will not amend or
supplement the Final Offering Memorandum prior to the Closing Date unless the Initial Purchasers
shall previously have been furnished a copy of the proposed amendment or supplement at least two
business days prior to the proposed use or filing, and shall not have objected to such amendment or
supplement. Before making, preparing, using, authorizing, approving or distributing any Company
Additional Written Communication, the Issuers will furnish to the Initial Purchasers a copy of such
written communication for review and will not make, prepare, use, authorize, approve or distribute
any such written communication to which Banc of America Securities LLC reasonably objects



(b) Amendments and Supplements to the Final Offering Memorandum and Other Securities Act
Matters. If, prior to the later of (x) the Closing Date and (y) the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Final Offering
Memorandum, as then amended or supplemented, in order to make the statements therein, in the light
of the circumstances when the Final Offering Memorandum is delivered to a Subsequent Purchaser, not
misleading, or if in the judgment of the Representative or counsel for the Initial Purchasers it is
otherwise necessary to amend or supplement the Final Offering Memorandum to comply with law, the
Issuers agree to promptly prepare (subject to Section 3 hereof), furnish at their own expense to
the Initial Purchasers, amendments or supplements to the Final Offering Memorandum so that the
statements in the Final Offering Memorandum as so amended or supplemented will not, in the light of
the circumstances at the Closing Date and at



 


17









 






the time of sale of Securities, be misleading or so that the Final Offering Memorandum, as
amended or supplemented, will comply with all applicable law.



Following the consummation of the Exchange Offer or the effectiveness of an applicable shelf
registration statement and for so long as the Securities are outstanding if, in the judgment of the
Initial Purchasers, the Initial Purchasers or any of their affiliates (as such term is defined in
the Securities Act) are required to deliver a prospectus in connection with sales of, or
market-making activities with respect to, the Securities, the Company agrees to periodically amend
the applicable registration statement so that the information contained therein complies with the
requirements of Section 10 of the Securities Act, to amend the applicable registration statement or
supplement the related prospectus or the documents incorporated therein when necessary to reflect
any material changes in the information provided therein so that the registration statement and the
prospectus will not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances existing
as of the date the prospectus is so delivered, not misleading and to provide the Initial Purchasers
with copies of each amendment or supplement filed and such other documents as the Initial
Purchasers may reasonably request.



The Issuers hereby expressly acknowledges that the indemnification and contribution provisions
of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in this Section 3.



(c) Copies of the Offering Memorandum. The Issuers agree to furnish the Initial Purchasers,
without charge, as many copies of the Pricing Disclosure Package and the Final Offering Memorandum
and any amendments and supplements thereto as they shall have reasonably requested.



(d) Blue Sky Compliance. Each of the Issuers and the Guarantors shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or register (or to obtain
exemptions from qualifying or registering) all or any part of the Securities for offer and sale
under the securities laws of the several states of the United States or any other jurisdictions
reasonably designated by the Initial Purchasers, shall comply with such laws and shall continue
such qualifications, registrations and exemptions in effect so long as required for the
distribution of the Securities. None of the Issuers or any of the Guarantors shall be required to
qualify as a foreign corporation or other entity or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation or other entity. The Company will advise the
Initial Purchasers promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, each of the Issuers and the
Guarantors shall use its reasonable best efforts to obtain the withdrawal thereof at the earliest
possible moment.



(e) Use of Proceeds. The Issuers shall apply the net proceeds from the sale of the Securities
sold by it in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure
Package.


 


18









 





(f) The Depositary. The Issuers will cooperate with the Initial Purchasers and use their
reasonable best efforts to permit the Securities to be eligible for clearance and settlement
through the facilities of the Depositary.



(g) Additional Issuer Information. Prior to the completion of the placement of the Securities
by the Initial Purchasers with the Subsequent Purchasers, the Issuers shall file, on a timely
basis, with the Commission and the Nasdaq Global Select Market all reports and documents required
to be filed under Section 13 or 15 of the Exchange Act. Additionally, at any time when the Issuers
are not subject to Section 13 or 15 of the Exchange Act and the Securities are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, for the benefit of
holders and beneficial owners from time to time of the Securities, the Issuers shall furnish, at
its expense, upon request, to holders and beneficial owners of Securities and prospective
purchasers of Securities information (“Additional Issuer Information”) satisfying the
requirements of Rule 144A(d).



(h) Agreement Not To Offer or Sell Additional Securities. During the period of 45days
following the date hereof, the Issuers will not, without the prior written consent of Banc of
America Securities LLC (which consent may be withheld at the sole discretion of Banc of America
Securities LLC), directly or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any debt securities of the Issuers
similar to the Securities or securities exchangeable for or convertible into debt securities of the
Issuers similar to the Securities (other than as contemplated by this Agreement and to register the
Exchange Securities).



(i) No Integration. The Issuers agree that they will not and will cause their Affiliates not
to make any offer or sale of securities of the Issuers of any class if, as a result of the doctrine
of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render
invalid (for the purpose of (i) the sale of the Securities by the Issuers to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A or
by Regulation S thereunder or otherwise.



(j) No Restricted Resales. During the period of one year after the Closing Date, the Issuers
will not, and will not permit any of their respective “affiliates” (as defined in Rule 144 under
the Securities Act) to resell any of the Securities that constitute “restricted securities” under
Rule 144 that have been reacquired by any of them.



(k) Legended Securities. Each certificate for a Security will bear the legend contained in
“Transfer Restrictions” in the Preliminary Offering Memorandum for the time period and upon the
other terms stated in the Preliminary Offering Memorandum.



Banc of America Securities LLC, on behalf of the several Initial Purchasers, may, in its sole
discretion, waive in writing the performance by the Issuers or any Guarantor of any one or more of
the foregoing covenants or extend the time for their performance.


 


19









 





SECTION 4. Payment of Expenses. Each of the Issuers and the Guarantors agrees to pay all
costs, fees and expenses incurred in connection with the performance of its obligations hereunder
and in connection with the transactions contemplated hereby, including, without limitation, (i) all
expenses incident to the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the
original issuance and sale of the Securities to the Initial Purchasers, (iii) all fees and expenses
of the Issuers’ and the Guarantors’ counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Pricing Disclosure Package and the Final Offering
Memorandum (including financial statements and exhibits), and all amendments and supplements
thereto, this Agreement, the Registration Rights Agreement, the Indenture, the DTC Agreement and
the Securities, (v) all filing fees, attorneys’ fees and expenses incurred by the Issuers, the
Guarantors or the Initial Purchasers in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the Securities for offer
and sale under the securities laws of the several states of the United States or other
jurisdictions reasonably designated by the Initial Purchasers (including, without limitation, the
cost of preparing, printing and mailing preliminary and final blue sky or legal investment
memoranda and any related supplements to the Pricing Disclosure Package or the Final Offering
Memorandum, (vi) the fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) any fees payable in connection with the rating of the Securities or the Exchange
Securities with the ratings agencies, (viii) all fees and expenses (including reasonable fees and
expenses of counsel) of the Issuers and the Guarantors in connection with approval of the
Securities by the Depositary for “book-entry” transfer, and the performance by the Issuers and the
Guarantors of their respective other obligations under this Agreement and (ix) all expenses of the
Company incident to the “road show” for the offering of the Securities. Except as provided in this
Section 4 and Sections 6, 8 and 9 hereof, the Initial Purchasers shall pay their own expenses,
including the fees and disbursements of their counsel.



SECTION 5. Conditions of the Obligations of the Initial Purchasers. The obligations of the
several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing
Date shall be subject to the accuracy of the representations and warranties on the part of the
Issuers and the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Issuers of their covenants
and other obligations hereunder, and to each of the following additional conditions:



(a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers shall have
received from KPMG LLP, independent public or certified public accountants for the Issuers,
a “comfort letter” dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Initial Purchasers, covering the financial information in the
Preliminary Offering Memorandum and the Pricing Supplement, if any, and other customary matters.
In addition, on the Closing Date, the Initial Purchasers shall have received from such accountants,
a “bring-down comfort letter” dated the Closing Date addressed to the Initial Purchasers, in form
and substance satisfactory to the Initial Purchasers, in the form of the “comfort letter” delivered
on the date hereof, except that (i) it shall cover the financial information in the Final Offering
Memorandum and any amendment or supplement thereto and (ii) procedures shall be brought down to a
date no more than 5 days prior to the Closing Date.


 


20









 





(b) No Material Adverse Change or Ratings Agency Change. For the period from and after the
date of this Agreement and prior to the Closing Date:




(i) in the judgment of the Representative there shall not have occurred any material
adverse change, or any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of the Crosstex
Parties, taken as a whole; and




(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any
securities or indebtedness of the Issuers or any of its Subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for purposes of Rule 436
under the Securities Act.



(c) Opinion of Counsel for the Issuers. On the Closing Date the Initial Purchasers shall have
received the favorable opinion of (i) Baker Botts, LLP, counsel for the Issuers, dated as of such
Closing Date, the form of which is attached as Exhibit A-1 and (ii) Taylor, Porter, Brooks &
Phillips LLP, local counsel for the Issuers, dated as of such Closing Date, the form of which is
attached as Exhibit A-2.



(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the Initial Purchasers
shall have received the favorable opinion of Vinson & Elkins LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, with respect to such matters as may be requested by the
Initial Purchasers.



(e) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have received a
written certificate executed by the Chairman of the Board, Chief Executive Officer or President of
each Issuer and each Guarantor and the Chief Financial Officer or Chief Accounting Officer of each
Issuer and each Guarantor, dated as of the Closing Date, to the effect set forth in Section
5(b)(ii) hereof, and further to the effect that:




(i) for the period from and after the date of this Agreement to the Closing Date, there
shall not have occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Crosstex Parties, taken as a whole;




(ii) the representations, warranties and covenants of such entity set forth in Section
1 hereof were true and correct as of the date hereof and are true and correct as of the
Closing Date with the same force and effect as though expressly made on and as of the
Closing Date; and




(iii) such entity has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to the Closing Date.


 


21









 





(f) Indenture; Registration Rights Agreement. The Issuers and the Guarantors shall have
executed and delivered the Indenture, and the Initial Purchasers shall have received executed
copies thereof. The Issuers and the Guarantors shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received executed counterparts thereof.



(g) Additional Documents. On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or agreements, herein
contained.



If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Initial Purchasers by notice to the Company at
any time on or prior to the Closing Date, which termination shall be without liability on the part
of any party to any other party, except that Sections 4, 6, 8 and 9 hereof shall at all times be
effective and shall survive such termination.



SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by
the Initial Purchasers pursuant to Section 5 or clauses (i), (v) and (vi) of Section 10 hereof,
including if the sale to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the Issuers or Guarantors
to perform any agreement herein or to comply with any provision hereof, the Issuers agree to
reimburse the Initial Purchasers, severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Initial Purchasers in connection with the proposed purchase
and the offering and sale of the Securities, including, without limitation, fees and disbursements
of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges; provided,
that the Issuers shall not be obligated for any such reimbursement if the termination of this
Agreement is solely as a result of the refusal, inability or failure to close and fund the new bank
credit facility on or prior to the Closing Date on the part of Lenders affiliated with the Initial
Purchasers notwithstanding the willingness and ability of the Company and the Guarantors to satisfy
all conditions precedent to the closing of the new credit facility with such terms as described in
the Pricing Disclosure Package.



SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on the one
hand, and the Issuers and each of the Guarantors, on the other hand, hereby agree to observe the
following procedures in connection with the offer and sale of the Securities:




(A) Offers and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are
made. Each such offer or sale shall only be made to persons whom the offeror or seller
reasonably believes to be Qualified Institutional Buyers or non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and sales of the
Securities may be made in reliance upon Regulation S upon the terms and conditions set forth
in Annex I hereto, which Annex I is hereby expressly made a part hereof.


 


22









 






(B) The Securities will be offered by approaching prospective Subsequent Purchasers on
an individual basis. No general solicitation or general advertising (within the meaning of
Rule 502 under the Securities Act) will be used in the United States in connection with the
offering of the Securities.




(C) Upon original issuance by the Issuers, and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof, other than the Exchange
Securities) shall bear the following legend:




“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR THE DATE OF ANY SUBSEQUENT REOPENING
OF THE NOTES) AND THE LAST DATE ON WHICH AN ISSUER OR ANY AFFILIATE
OF AN ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A)
TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE


 


23









 






TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER OR AN ISSUER ON
OR AFTER THE RESALE RESTRICTION TERMINATION DATE.”



Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the
Issuers for any losses, damages or liabilities suffered or incurred by the Issuers, including any
losses, damages or liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.




SECTION 8. Indemnification.



(a) Indemnification of the Initial Purchasers. Each of the Issuers and the Guarantors,
jointly and severally, agrees to indemnify and hold harmless each Initial Purchaser, its directors,
officers and employees, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Initial Purchaser, director, officer, employee or controlling
person may become subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Issuers), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the Pricing Supplement, the Preliminary Offering Memorandum, any Company
Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; and to reimburse each Initial Purchaser and each such director, officer, employee or
controlling person for any and all expenses (including the fees and disbursements of counsel chosen
by Banc of America Securities LLC) as such expenses are reasonably incurred by such Initial
Purchaser or such director, officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any
loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or alleged



 


24









 






omission made in reliance upon and in conformity with written information furnished to the
Issuers by the Initial Purchasers expressly for use in the Pricing Supplement, the Preliminary
Offering Memorandum, any Company Additional Written Communication or the Final Offering Memorandum
(or any amendment or supplement thereto). The indemnity agreement set forth in this Section 8(a)
shall be in addition to any liabilities that the Issuers may otherwise have.



(b) Indemnification of the Issuers and the Guarantors. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless each Issuer, each Guarantor, each of
their respective directors and each person, if any, who controls any Issuer or any Guarantor within
the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which any Issuer, any Guarantor or any such director or controlling
person may become subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such Initial Purchaser),
insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Pricing Supplement, the Preliminary Offering Memorandum, any
Company Additional Written Communication or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Pricing Supplement, the
Preliminary Offering Memorandum, any Company Additional Written Communication or the Final Offering
Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Issuers by the Initial Purchasers expressly for use therein;
and to reimburse any Issuer, any Guarantor and each such director or controlling person for any and
all expenses (including the fees and disbursements of counsel) as such expenses are reasonably
incurred by any Issuer, any Guarantor or such director or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action. Each of the Issuers and the Guarantors hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Issuers expressly for use in the
Pricing Supplement, the Preliminary Offering Memorandum, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are the
statements set forth in the first sentence of the fourth paragraph under the caption “Plan of
Distribution” and the four paragraphs under the subcaption “Short Positions” under the caption
“Plan of Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum.
The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that
each Initial Purchaser may otherwise have.



(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise under the indemnity agreement contained
in this Section 8 except to the extent it has been materially prejudiced (through the



 


25









 






forfeiture of substantive rights and defenses) as a result of such failure and shall not
relieve the indemnifying party from any liability that the indemnifying party may have to an
indemnified party otherwise than under the provisions of this Section 8 and Section 9. In case any
such action is brought against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate
in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the indemnified party shall have
reasonably concluded that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with local counsel), approved
by the indemnifying party (Banc of America Securities LLC in the case of Sections 8(b) and 9
hereof), representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.



(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include any statements as to or any findings of fault, culpability or
failure to act by or on behalf of any indemnified party.



SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such



 


26









 






indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or
expenses referred to therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers and the Guarantors, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Issuers and the Guarantors, on the one hand, and the Initial Purchasers,
on the other hand, in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting expenses) received by
the Issuers, and the total discount received by the Initial Purchasers bear to the aggregate
initial offering price of the Securities. The relative fault of the Issuers and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Issuers and the Guarantors, on
the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission
or inaccuracy.



The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8 hereof, any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no additional notice shall
be required with respect to any action for which notice has been given under Section 8 hereof for
purposes of indemnification.



The Issuers, the Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
9.



Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to
contribute any amount in excess of the discount received by such Initial Purchaser in connection
with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to
contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective
commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each
director, officer and employee of an Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the



 


27









 






same rights to contribution as such Initial Purchaser, and each director of the Issuers or any
Guarantor, and each person, if any, who controls the Issuers or any Guarantor with the meaning of
the Securities Act and the Exchange Act shall have the same rights to contribution as the Issuers
and the Guarantors.



SECTION 10. Termination of this Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time: (i) trading or
quotation in any of the Issuers’ securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market; (ii) trading in securities generally on either the Nasdaq Stock
Market or the NYSE shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such quotation system or stock exchange by the Commission or
the FINRA; (iii) a general banking moratorium shall have been declared by any of federal, New York
or Delaware authorities; (iv) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development involving a prospective
substantial change in United States’ or international political, financial or economic conditions,
as in the judgment of the Representative is material and adverse and makes it impracticable or
inadvisable to proceed with the offering sale or delivery of the Securities in the manner and on
the terms described in the Pricing Disclosure Package or to enforce contracts for the sale of
securities; (v) in the judgment of the Representative there shall have occurred since the date of
the latest audited financial statements included or incorporated by reference in the Pricing
Disclosure Package, any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the ordinary course of
business, of the Crosstex Parties, taken as a whole, other than as disclosed in the Pricing
Disclosure Package; or (vi) the Issuers shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of the Representative
may interfere materially with the conduct of the business and operations of the Issuers regardless
of whether or not such loss shall have been insured. Any termination pursuant to this Section 10
shall be without liability on the part of (i) the Issuers or any Guarantor to any Initial
Purchaser, except that the Issuers and the Guarantors shall be obligated to reimburse the expenses
of the Initial Purchasers in accordance with the terms of Section 6 hereof, (ii) any Initial
Purchaser to the Issuers, or (iii) any party hereto to any other party except that the provisions
of Sections 8 and 9 hereof shall at all times be effective and shall survive such termination.



SECTION 11. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Crosstex Parties, their
respective officers and the several Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation made by or on
behalf of any Initial Purchaser, the Issuers, any Guarantor or any of their partners, officers or
directors or any controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement.



SECTION 12. Notices. All communications hereunder shall be in writing and shall be mailed,
hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:


 


28









 






If to the Initial Purchasers:




Banc of America Securities LLC

40 West 57th Street

New York, New York 10019

Facsimile: (212) 901-7897

Attention: Legal Department




with a copy to:




Vinson & Elkins L.L.P.

1001 Fannin Street

2500 First City Tower

Houston, Texas 72002

Facsimile: (713) 651-5861

Attention: David P. Oelman




If to Crosstex Party:




Crosstex Energy, L.P.

2501 Cedar Springs, Suite 2600

Dallas, Texas 75201

Facsimile: (214) 953-9501

Attention: General Counsel




with a copy to:




Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Facsimile: (214) 661-4634

Attention: Douglass M. Rayburn



Any party hereto may change the address or facsimile number for receipt of communications by
giving written notice to the others.



In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and
record information that identifies their respective clients, including the Issuers, which
information may include the name and address of their respective clients, as well as other
information that will allow the Initial Purchasers to properly identify their respective clients.



SECTION 13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Initial Purchasers pursuant to Section 16 hereof, and to
the benefit of the indemnified parties referred to in Sections 8 and 9 hereof, and in each case
their respective successors, and no other person will have any right or obligation hereunder.


 


29









 





The term “successors” shall not include any Subsequent Purchaser of other purchaser of the
Securities as such from any of the Initial Purchasers merely by reason of such purchase.



SECTION 14. Partial Unenforceability. The invalidity or unenforceability of any section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other section, paragraph or provision hereof. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.




SECTION 15. Governing Law Provisions.



(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.



(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the City and County of
New York or the courts of the State of New York in each case located in the City and County of New
York (collectively, the “Specified Courts”), and each party irrevocably submits to the
exclusive jurisdiction (except for suits, actions, or proceedings instituted in regard to the
enforcement of a judgment of any Specified Court in a Related Proceeding a “Related
Judgment”, as to which such jurisdiction is non-exclusive) of the Specified Courts in any
Related Proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any Related Proceeding brought in
any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying
of venue of any Specified Proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in
any Specified Court has been brought in an inconvenient forum.



SECTION 16. Default of One or More of the Several Initial Purchasers. If any one or more of
the several Initial Purchasers shall fail or refuse to purchase Securities that it or they have
agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other
Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities
set forth opposite their respective names on Schedule A bears to the aggregate number of Securities
set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting
Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on the Closing Date. If any one or more of the
Initial Purchasers shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial
Purchasers and the Issuers for the purchase of such Securities are not



 


30









 






made within 48 hours after such default, this Agreement shall terminate without liability of
any party to any other party except that the provisions of Sections 4, 6, 8 and 9 hereof shall at
all times be effective and shall survive such termination. In any such case either the Initial
Purchasers or the Issuers shall have the right to postpone the Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes, if any, to the Final
Offering Memorandum or any other documents or arrangements may be effected.



As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 16. Any action taken under this
Section 16 shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.



SECTION 17. No Advisory or Fiduciary Responsibility. Each of the Issuers and the Guarantors
acknowledges and agrees that: (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the offering price of the Securities and any related
discounts and commissions, is an arm’s-length commercial transaction between the Issuers and the
Guarantors, on the one hand, and the several Initial Purchasers, on the other hand, and the Issuers
and the Guarantors are capable of evaluating and understanding and understand and accept the terms,
risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with
each transaction contemplated hereby and the process leading to such transaction each Initial
Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the
Issuers, Guarantors or their respective affiliates, stockholders, creditors or employees or any
other party; (iii) no Initial Purchaser has assumed or will assume an advisory or fiduciary
responsibility in favor of the Issuers or Guarantors with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser
has advised or is currently advising the Issuers and the Guarantors on other matters) or any other
obligation to the Issuers and the Guarantors except the obligations expressly set forth in this
Agreement; (iv) the several Initial Purchasers and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the Issuers and the
Guarantors and that the several Initial Purchasers have no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship; (v) the Initial Purchasers have not
provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Issuers and the Guarantors have consulted their own legal, accounting, regulatory
and tax advisors to the extent they deemed appropriate; and (y) it will not claim that the Initial
Purchasers, or any of them, has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Issuers, in connection with the transactions contemplated hereby
or the process leading thereto.



This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Issuers, the Guarantors and the several Initial Purchasers, or any of them, with
respect to the subject matter hereof. The Issuers and the Guarantors hereby waive and release, to
the fullest extent permitted by law, any claims that the Issuers and the Guarantors may have
against the several Initial Purchasers with respect to any breach or alleged breach of fiduciary
duty.



SECTION 18. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous



 


31









 






oral agreements, understandings and negotiations with respect to the subject matter hereof.
This Agreement may be executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.


 


32









 





If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.



	 	 	 	 	 
	 	Very truly yours,



CROSSTEX ENERGY, L.P.

 	 
	 	By:	Crosstex Energy GP, L.P.,	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	Crosstex Energy GP, LLC,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	/s/ William W. Davis	 
	 	Name:	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	CROSSTEX ENERGY FINANCE CORPORATION
 	 
	 	By:  	/s/ William W. Davis
 	 
	 	Name:  	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	Guarantors



CROSSTEX ENERGY SERVICES, L.P.

 	 
	 	By:  	Crosstex Operating GP, LLC,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	                                              /s/ William W. Davis
 	 
	 	Name:  	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 



Signature Page

Purchase Agreement




 


 









 







	 	 	 	 	 
	 	CROSSTEX OPERATING GP, LLC

CROSSTEX ENERGY SERVICES GP, LLC

CROSSTEX LIG LIQUIDS, LLC

CROSSTEX PROCESSING SERVICES, LLC

CROSSTEX PELICAN, LLC

CROSSTEX EUNICE, LLC

 	 
	 	By:  	/s/ William W. Davis
 	 
	 	Name:  	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	CROSSTEX ACQUISITION MANAGEMENT, L.P.

CROSSTEX GULF COAST MARKETING LTD.

CROSSTEX CCNG PROCESSING LTD.

CROSSTEX NORTH TEXAS PIPELINE, L.P.

CROSSTEX NORTH TEXAS GATHERING, L.P.

CROSSTEX NGL MARKETING, L.P.

CROSSTEX NGL PIPELINE, L.P.

 	 
	 	By:  	Crosstex Energy Services GP, LLC,

general partner of each above limited  partnership
 	 
	 	By:  	/s/ William W. Davis	 
	 	Name:  	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	SABINE PASS PLANT FACILITY JOINT VENTURE

 	 
	 	By:  	Crosstex Processing Services, LLC,

as general partner, and
 	 
	 	 	 
	 	By:  	Crosstex Pelican, LLC,	 
	 	 	as general partner 	 
	 	 	 
	 	By:  	/s/ William W. Davis	 
	 	Name:  	William W. Davis 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 



Signature
Page
Purchase Agreement



 


 









 





The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of
the date first above written.



	 	 	 	 	 
	BANC
OF AMERICA SECURITIES LLC

on behalf of itself and the other

Initial Purchasers



	 	 
	By:  	/s/ Lex Maultsby
 	 	 
	 	Lex Maultsby 	 	 
	 	Managing Director 	 	 



Signature
Page
Purchase Agreement



 


 









 





SCHEDULE A




	 	 	 	 	 
	 	 	Aggregate	 
	 	 	Principal	 
	 	 	Amount of	 
	 	 	Securities to be	 
	Initial Purchasers	 	Purchased	 
	Banc of America Securities LLC
	 	$	253,750,000	 
	BNP Paribas Securities Corp.
	 	$	79,750,000	 
	RBC Capital Markets Corporation
	 	$	79,750,000	 
	Wells Fargo Securities, LLC
	 	$	79,750,000	 
	UBS Securities LLC
	 	$	65,250,000	 
	Goldman, Sachs & Co.
	 	$	43,500,000	 
	Morgan Stanley & Co. Incorporated
	 	$	43,500,000	 
	Capital One Southcoast, Inc.
	 	$	29,000,000	 
	BBVA Securities Inc.
	 	$	16,917,000	 
	Comerica Securities, Inc.
	 	$	16,917,000	 
	U.S. Bancorp Investments, Inc.
	 	$	16,916,000	 
	 	 	 	 
	 
	 	 	 	 
	Total
	 	$	725,000,000	 
	 	 	 	 






Schedule A



 


 









 





SCHEDULE B-1




Guarantors




Crosstex Energy Services, L.P.

Crosstex Operating GP, LLC

Crosstex Energy Services GP, LLC

Crosstex LIG Liquids, LLC

Crosstex Eunice, LLC

Crosstex Processing Services, LLC

Crosstex Pelican, LLC

Crosstex Acquisition Management, L.P.

Crosstex Gulf Coast Marketing Ltd.

Crosstex CCNG Processing Ltd.

Crosstex North Texas Pipeline, L.P.

Crosstex North Texas Gathering, L.P.

Crosstex NGL Marketing, L.P.

Crosstex NGL Pipeline, L.P.

Sabine Pass Plant Facility Joint Venture




Schedule B-1



 


 









 





SCHEDULE B-2




Subsidiaries




Crosstex Energy Services, L.P.

Crosstex Operating GP, LLC

Crosstex Energy Services GP, LLC

Crosstex LIG Liquids, LLC

Crosstex Eunice, LLC

Crosstex Processing Services, LLC

Crosstex Pelican, LLC

Crosstex Acquisition Management, L.P.

Crosstex Gulf Coast Marketing Ltd.

Crosstex CCNG Processing Ltd.

Crosstex North Texas Pipeline, L.P.

Crosstex North Texas Gathering, L.P.

Crosstex NGL Marketing, L.P.

Crosstex NGL Pipeline, L.P.

Sabine Pass Plant Facility Joint Venture

Crosstex LIG, LLC

Crosstex Tuscaloosa, LLC




Schedule B-2



 


 









 





EXHIBIT A-1




Form of Opinions of Issuers’ Counsel




(a) Crosstex Energy, L.P. (the “Partnership”) has been duly formed and is validly existing in
good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act
(the “Delaware LP Act”) with full partnership power and authority to own or lease its properties
and to conduct its business in all material respects as described in the Pricing Disclosure Package
and the Final Offering Memorandum.



(b) Crosstex Energy GP, L.P., the general partner (the “General Partner”) of the Partnership,
has been duly formed and is validly existing in good standing as a limited partnership under the
Delaware LP Act with full partnership power and authority to own or lease its properties, to
conduct its business and to act as a general partner of the Partnership in all material respects as
described in the Pricing Disclosure Package and the Final Offering Memorandum.



(c) Crosstex Energy Finance Corporation (“FinCo”) has been duly incorporated and is validly
existing in good standing as a corporation under the Delaware General Corporation Law (the “DGCL”)
with full corporate power and authority to own or lease its properties and to conduct its business
in all material respects as described in the Pricing Disclosure Package and the Final Offering
Memorandum.



(d) Each of (i) Crosstex Energy Services, L.P. (the “Operating Company”), (ii) Crosstex
Operating GP, LLC (the “Operating GP”), (iii) Crosstex Energy Services GP, LLC, (iv) Crosstex
Processing Services, LLC, (v) Crosstex Pelican, LLC, (vi) Crosstex Acquisition Management, L.P.,
(vii) Crosstex Gulf Coast Marketing Ltd., (viii) Crosstex CCNG Processing Ltd., (ix) Crosstex North
Texas Pipeline, L.P., (x) Crosstex North Texas Gathering, L.P., (xi) Crosstex NGL Marketing, L.P.
and (xii) Crosstex NGL Pipeline, L.P. (collectively, the “Covered Guarantors”), has been duly
formed and is validly existing as a limited partnership, limited liability company or corporation,
as the case may be, in good standing under the laws of its jurisdiction of formation with all
limited partnership, limited liability company or corporate, as the case may be, power and
authority necessary to own or lease its properties and to conduct its business, in each case in all
material respects as described in the Pricing Disclosure Package and the Final Offering Memorandum.
Each of the Issuers and the Covered Guarantors is duly registered or qualified to do business and
is in good standing as a foreign limited liability company, limited partnership or corporation, as
the case may be, in each jurisdiction set forth under its name on an exhibit to such opinion.



(e) The General Partner is the sole general partner of the Partnership with a 2% general
partner interest in the Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Partnership Agreement; and the General Partner owns its
general partner interest free and clear of all liens, encumbrances (except restrictions on
transferability contained in Section 4.6 of the Partnership Agreement or as described in the
Pricing Disclosure Package and the Final Offering Memorandum), security interests, equities,
charges or



 


Exhibit A-1









 






claims (i) in respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the General Partner as a debtor is on file in the office of the Secretary
of State of the State of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act.



(f) The Operating GP is the sole general partner of the Operating Company with a .001% general
partner interest in the Operating Company; such general partner interest has been duly authorized
and validly issued in accordance with the Operating Company Agreement; the Operating GP owns such
general partner interest free and clear of all liens, encumbrances (except restrictions on
transferability contained in Article IV of the Operating Company Agreement or as described in the
Pricing Disclosure Package and the Final Offering Memorandum), security interests equities, charges
or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the Operating GP as a debtor is on file in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act and other than
those arising under the Credit Agreement; the Partnership is the sole limited partner of the
Operating Company with a 99.999% limited partner interest in the Operating Company; such limited
partner interest has been duly authorized and validly issued in accordance with the Operating
Company Agreement and will be fully paid (to the extent required under the Operating Company
Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303,
17-607 and 17-804 of the Delaware LP Act); and the Partnership owns such limited partner interest
free and clear of all liens, encumbrances (except restrictions on transferability contained in
Article IV of the Operating Company Agreement or as described in the Pricing Disclosure Package or
the Final Offering Memorandum), security interests, equities, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the State of Delaware naming the
Partnership as a debtor is on file in the office of the Secretary of State of the State of Delaware
or (ii) otherwise known to such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act and other than those arising under the Credit
Agreement.



(g) The Partnership owns of record 100% of the issued and outstanding membership interests in
the Operating GP; such membership interests have been duly authorized and validly issued in
accordance with the Operating GP LLC Agreement and are fully paid (to the extent required under the
Operating GP LLC Agreement) and nonassessable (except as such nonassessability may be affected by
Sections 18-607 and 18-804 of the Delaware LLC Act); and the Partnership owns such membership
interests free and clear of all liens, encumbrances (except restrictions on transferability as
described in the Pricing Disclosure Package and the Final Offering Memorandum or as otherwise
contained in the Operating GP LLC Agreement), security interests, equities, charges or claims (i)
in respect of which a financing statement under the Uniform Commercial Code of the State of
Delaware naming the Partnership is on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent investigation, other than
those created by or arising under the Delaware LLC Act and other than those arising under the
Credit Agreement.


 


Exhibit A-1









 





(h) The Operating Company directly or indirectly owns of record all of the issued and
outstanding partnership interests or membership interests in each Covered Guarantor (other than the
Operating GP and the Operating Company); such outstanding partnership interests or membership
interests, as the case may be, of each Covered Guarantor (other than the Operating GP and the
Operating Company) have been duly authorized and validly issued in accordance with the applicable
limited partnership agreement or limited liability company agreement of such Covered Guarantor, and
are fully paid (to the extent required under the applicable limited partnership agreement or
limited liability company agreement of each such Covered Guarantor) and nonassessable (except as
such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act,
Sections 18-607 and 18-804 of the Delaware LLC Act or Sections 101.206, 153.102, 153.202 and
153.210 of the Texas Business Organizations Code (the “TBOC”), as applicable); and the Operating
Company owns such partnership interests and membership interests free and clear of all liens,
encumbrances (except restrictions on transferability as described in the Pricing Disclosure Package
and the Final Offering Memorandum or as otherwise contained in the applicable limited partnership
agreement or limited liability company agreement of each such Covered Guarantor), security
interests, equities, charges or claims (i) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware or Texas, as applicable, naming the Operating
Company or Crosstex Energy Services GP, LLC, as applicable, as a debtor is on file in the office of
the Secretary of State of the State of Delaware or Texas, as applicable, or (ii) otherwise known to
such counsel, without independent investigation, other than those created by or arising under the
Delaware LP Act, the Delaware LLC Act or the TBOC, as applicable, and other than those arising
under the Credit Agreement.



(i) The Purchase Agreement has been duly and validly authorized, executed and delivered by
each of the Issuers, the Covered Guarantors and Sabine Pass Plant Facility Joint Venture (together
with the Covered Guarantors, the “Delaware-Texas Guarantors”, and the Delaware-Texas Guarantors
together with the Issuers, the “Delaware-Texas Crosstex Parties”).



(j) The Registration Rights Agreement has been duly authorized, executed and delivered by each
of the Delaware-Texas Crosstex Parties, and (assuming the due authorization, execution and delivery
thereof by Crosstex LIG Liquids, LLC and Crosstex Eunice, LLC (collectively, the “Louisiana
Guarantors”) and the Initial Purchasers) is a valid and legally binding agreement of each of the
Issuers and Guarantors, enforceable against each of them in accordance with its terms; provided
that the enforceability thereof is subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting the rights and
remedies of creditors’ rights generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) and (ii) public policy,
applicable law relating to fiduciary duties and indemnification and contribution and an implied
covenant of good faith and fair dealing.



(k) The Indenture has been duly authorized, executed and delivered by each of the
Delaware-Texas Crosstex Parties, and (assuming the due authorization, execution and delivery
thereof by the Louisiana Guarantors and the Trustee) is a valid and legally binding agreement of
each of the Issuers and Guarantors, enforceable against each of them in accordance with its



 


Exhibit A-1









 






terms; provided that the enforceability thereof is subject to (i) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting the rights and remedies of creditors’ rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and
contribution and an implied covenant of good faith and fair dealing.



(l) The Notes and the Guarantees have been duly authorized by each of the Issuers and the
Delaware-Texas Guarantors, respectively, the Notes are substantially in the form contemplated by
the Indenture and have been validly executed by each of the Issuers, and, when duly authenticated
by the Trustee in the manner provided for in the Indenture and delivered to and paid for by the
Initial Purchasers under the Purchase Agreement and assuming the due authorization of the
Guarantees by the Louisiana Guarantors and assuming the due authorization, execution and delivery
of the Indenture by the Louisiana Guarantors, will constitute valid and binding obligations of the
Issuers and the Guarantors, respectively, enforceable against them in accordance with their
respective terms, except as enforcement thereof may be limited by (i) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting the rights and remedies of creditors’ rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and
contribution and an implied covenant of good faith and fair dealing.



(m) The Exchange Securities have been duly authorized by the Issuers and the Delaware-Texas
Guarantors, respectively, and, when the Exchange Securities have been validly issued and duly
authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and
the Exchange Offer and assuming the due authorization of the guarantees related to the Exchange
Securities by the Louisiana Guarantors, the Exchange Securities will have been validly executed and
will constitute valid and binding obligations of the Issuers and the Guarantors, respectively,
enforceable against them in accordance with their respective terms, except as enforcement thereof
may be limited by (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting the rights and remedies of creditors’ rights
generally and by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to
fiduciary duties and indemnification and contribution and an implied covenant of good faith and
fair dealing.



(n) The statements set forth or incorporated by reference in each of the Preliminary Offering
Memorandum and the Final Offering Memorandum (i) under the captions “The Offering” and “Description
of Notes,” insofar as they purport to constitute summaries of the terms of the Securities, are
accurate in all material respects, (ii) under the captions “United States Federal Income and Estate
Tax Considerations,” “Business – Regulation” and “Business – Environmental Matters,” insofar as
they purport to constitute summaries of statutes, legal, governmental and regulatory proceedings,
fairly summarize the matters described therein in all material re-



 


Exhibit A-1









 






spects and (iii) under the caption “Description of New Credit Facility,” insofar as they
purport to constitute summaries of contracts and other documents, are accurate in all material
respects.



(o) No consent, approval, authorization or order of, or filing or registration with, any court
or governmental agency or body having jurisdiction over any of the Delaware-Texas Crosstex Parties
or any of their respective properties is required in connection with the offering, issuance and
sale of the Securities by the Delaware-Texas Crosstex Parties in the manner contemplated by the
Purchase Agreement or in the Final Offering Memorandum, the execution, delivery and performance of
this Agreement, the Indenture and the Registration Rights Agreement by the Delaware-Texas Crosstex
Parties and the consummation by the Delaware-Texas Crosstex Parties of the transactions
contemplated hereby and thereby, except (i) with respect to the purchase and resale of the
Securities by the Initial Purchasers, under applicable states securities or “Blue Sky” laws, as to
which such counsel need express no opinion, (ii) with respect to the Exchange Securities, as may be
required under the Securities Act and applicable state securities or “Blue Sky” laws as
contemplated by the Registration Rights Agreement, as to which such counsel need express no
opinion, (iii) with respect to the Trustee and the Indenture in respect of the Exchange Securities,
as may be required under the Trust Indenture Act, as to which such counsel need express no opinion,
(iv) for such consents that have been obtained or made, (v) for such consents that, if not
obtained, would not, individually or in the aggregate, have a Material Adverse Change or (vi) as
disclosed in the Pricing Disclosure Package and the Final Offering Memorandum.



(p) None of the offering, issuance and sale of the Securities by the Issuers and the
Delaware-Texas Guarantors, respectively, the execution, delivery and performance of the Securities,
the Exchange Securities, the Indenture, the Registration Rights Agreement or the Purchase Agreement
by the Delaware-Texas Crosstex Parties or the consummation of the transactions contemplated hereby
or thereby (i) constitutes or will constitute a violation of the agreement of limited partnership,
limited liability company agreement or other organizational documents of any of the Delaware-Texas
Crosstex Parties, (ii) constitutes or will constitute a breach or violation of, or a default (or an
event which, with notice or lapse of time or both, would constitute such a default) under any
agreement filed or incorporated by reference as an exhibit to the Partnership’s annual report on
Form 10-K for the year ended December 31, 2008, quarterly reports on Form 10-Q for the quarters
ended March 31, 2009, June 30, 2009 or September 30, 2009, or any applicable current report on Form
8-K filed with the Commission since the date of filing of the most recent Form 10-K (the “Filed
Agreements”) (other than liens created under the Credit Agreement), (iii) violates or will violate
the Delaware LP Act, the Delaware LLC Act, the DGCL, the laws of the State of Texas or the federal
laws of the United States of America, provided that such counsel need express no opinion in this
paragraph (p) as to federal or state securities or anti-fraud laws or (iv) to our knowledge,
results or will result in the creation or imposition of any lien, charge or encumbrance on any
property or assets of the Delaware-Texas Crosstex Parties pursuant to the Filed Agreements (other
than liens created under the Credit Agreement), which breaches, violations or defaults, in the case
of clauses (ii) or (iii), would, individually or in the aggregate, have a Material Adverse Change.


 


Exhibit A-1









 





(q) None of the Delaware-Texas Crosstex Parties is an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.



(r) Assuming the accuracy of the representations and warranties and compliance with the
agreements of the Crosstex Parties and the Initial Purchasers contained in the Purchase Agreement
and assuming the Securities are issued and sold under the circumstances contemplated by the
Purchase Agreement and the Final Offering Memorandum, no registration of the Securities under the
Securities Act, and no qualification of an indenture under the Trust Indenture Act, are required
for the offer and sale by the Initial Purchasers of the Securities in the manner contemplated by
this Agreement.



In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Issuers, representatives of the independent registered public
accounting firm of the Partnership and representatives of the Initial Purchasers, at which the
contents of the Preliminary Offering Memorandum, the Pricing Supplement, the Final Offering
Memorandum and related matters were discussed. The purpose of such counsel’s professional
engagement was not to establish or confirm factual matters set forth in the Preliminary Offering
Memorandum, the Pricing Supplement and the Final Offering Memorandum, and such counsel has not
undertaken to verify independently any of the factual matters in such documents. Moreover, many of
the determinations required to be made in the preparation of the Final Offering Memorandum involve
matters of a non-legal nature. Accordingly, such counsel shall not pass upon and shall not assume
responsibility for the accuracy, completeness or fairness of the statements contained in, the
Preliminary Offering Memorandum, the Pricing Supplement and the Final Offering Memorandum (except
as and to the extent stated in paragraph (n) above). Subject to the foregoing and on the basis of
the information such counsel gained in the course of performing services referred to above, such
counsel shall advise the Initial Purchasers that no facts have come to such counsel’s attention
that lead such counsel to believe that:



(a) the Preliminary Offering Memorandum, together with the Pricing Supplement, as of the Time
of Sale, included an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading; or



(b) the Final Offering Memorandum, as of its date and as of the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading;



it being understood that such counsel need express no statement or belief in such letter with
respect to (i) the financial statements and related schedules, including the notes and schedules
thereto and the auditor’s report thereon, included or incorporated by reference therein, (ii) any
other financial or accounting information or data contained or incorporated by reference therein or
(iii) the representations and warranties and other statements of fact included in the exhibits to
any document incorporated by reference therein.


 


Exhibit A-1









 





In rendering such opinion, such counsel may (i) rely in respect of matters of fact on
certificates of officers and employees of the Delaware-Texas Crosstex Parties and upon information
obtained from public officials, (ii) assume that all documents submitted to them as originals are
authentic, that all copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (iii) state that their opinion is limited
to matters of federal law, the Delaware LLC Act, the Delaware LP Act, the DGCL, the laws of the
State of New York and the laws of the State of Texas, (iv) with respect to the opinions expressed
in paragraph (d) above as to the due qualification or registration as a foreign corporation,
limited liability company or limited partnership, as the case may be, of each of the Issuers and
the Covered Guarantors, state that such opinions are based upon certificates of foreign
qualification or registration provided by the Secretary of State of the states listed on an exhibit
to such opinion, (v) state that they express no opinion with respect to state or local taxes or tax
statutes to which any of the partners of the Partnership or any of the Crosstex Parties may be
subject and (vi) state that with respect to the opinions expressed in paragraph (o), such counsel
does not intend to express any opinions as to the matters addressed in paragraph (r).


 


Exhibit A-1









 





EXHIBIT A-2




Form of Opinions of Issuers’ Local Louisiana Counsel




(a) Each of (i) Crosstex LIG Liquids, LLC and (ii) Crosstex Eunice, LLC (collectively, the
“Louisiana Guarantors”) has been duly formed and is validly existing as a limited liability company
in good standing under the laws of its jurisdiction of formation with all limited liability company
power and authority necessary to own or lease its properties and to conduct its business, in each
case in all material respects as described in the Pricing Disclosure Package and the Final Offering
Memorandum. Each of the Louisiana Guarantors is duly registered or qualified to do business and is
in good standing as a foreign limited liability company in each jurisdiction set forth under its
name on an exhibit to such opinion.



(b) Crosstex Energy Services, LP (the “Operating Company”) directly or indirectly owns of
record all of the issued and outstanding membership interests in each Louisiana Guarantor; such
outstanding membership interests have been duly authorized and validly issued in accordance with
the applicable limited liability company agreement of such Louisiana Guarantor, and are fully paid
(to the extent required under the applicable limited liability company agreement of each Louisiana
Guarantor) and nonassessable (except as such nonassessability may be affected by [Sections of
applicable Louisiana law]).



(c) Each of the Purchase Agreement, the Registration Rights Agreement and the Indenture has
been duly and validly authorized, executed and delivered by each of the Louisiana Guarantors.



(d) The Guarantees have been duly authorized by the Louisiana Guarantors.



(e) The guarantees relating to the Exchange Securities have been duly authorized by the
Louisiana Guarantors.



(f) No consent, approval, authorization or order of, or filing or registration with, any court
or governmental agency or body of the State of Louisiana is required in connection with the
offering, issuance and sale of the Guarantees by the Louisiana Guarantors in the manner
contemplated by the Purchase Agreement or in the Final Offering Memorandum, the execution, delivery
and performance of this Agreement, the Indenture and the Registration Rights Agreement by the
Louisiana Guarantors and the consummation by the Louisiana Guarantors of the transactions
contemplated hereby and thereby, except (i) with respect to the purchase and resale of the
Securities by the Initial Purchasers or with respect to the Exchange Securities, under applicable
states securities or “Blue Sky” laws, as to which such counsel expresses no opinion, (ii) for such
consents that have been obtained or made or (iii) for such consents that, if not obtained, would
not, individually or in the aggregate, have a Material Adverse Change.



(g) None of the offering, issuance and sale of the Guarantees by the Louisiana Guarantors, the
execution, delivery and performance of the Guarantees, the guarantees related to the Exchange
Securities, the Indenture, the Registration Rights Agreement or the Purchase Agree-



 


Exhibit A-2









 






ment by the Louisiana Guarantors or the consummation of the transactions contemplated hereby
or thereby (i) constitutes or will constitute a violation of the limited liability company
agreement of any of the Louisiana Guarantors or (ii) violates or will violate the Louisiana Limited
Liability Company Law, provided that such counsel expresses no opinion as to federal or state
securities or anti-fraud laws, which breaches, violations or defaults, in the case of clause (ii),
would, individually or in the aggregate, have a Material Adverse Change



In rendering such opinion, such counsel has (i) relied in respect of matters of fact on
certificates of officers and employees of the Louisiana Guarantors and upon information obtained
from public officials, (ii) assumed that all documents submitted to them as originals are
authentic, that all copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (iii) stated that their opinion is
limited to matters of the laws of the State of Louisiana, (iv) with respect to the opinions
expressed in paragraph (a) above as to the due qualification or registration as a foreign limited
liability company of the Louisiana Guarantors, state that such opinions are based upon certificates
of foreign qualification or registration provided by the Secretary of State of the states listed on
an exhibit to such opinion and (v) state that they express no opinion with respect to federal,
state or local taxes or tax statutes to which any of the Louisiana Guarantors or any members of the
Louisiana Guarantors may be subject.


 


Exhibit A-2









 





ANNEX I




Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser understands that:



Such Initial Purchaser agrees that it has not offered or sold and will not offer or sell the
Securities in the United States or to, or for the benefit or account of, a U.S. Person (other than
a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the commencement of
the offering of the Securities pursuant hereto and the Closing Date, other than in accordance with
Regulation S or another exemption from the registration requirements of the Securities Act. Such
Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Securities (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as permitted by and include the
statements required by Regulation S.



Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it
to any distributor, dealer or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such
distributor, dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:




“The Securities covered hereby have not been registered under the U.S. Securities Act of
1933, as amended (the “Securities Act”), and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as part of your
distribution at any time or (ii) otherwise until 40 days after the later of the date the
Securities were first offered to persons other than distributors in reliance on Regulation S
and the Closing Date, except in either case in accordance with Regulation S under the
Securities Act (or in accordance with Rule 144A under the Securities Act or to accredited
investors in transactions that are exempt from the registration requirements of the
Securities Act), and in connection with any subsequent sale by you of the Securities covered
hereby in reliance on Regulation S under the Securities Act during the period referred to
above to any distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect. Terms used
above have the meanings assigned to them in Regulation S under the Securities Act.”



Such Initial Purchaser agrees that the Securities offered and sold in reliance on Regulation S
will be represented upon issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred to in Rule 903 of
Regulation S and only upon certification of beneficial ownership of such Securities by non-U.S.
persons or U.S. persons who purchased such Securities in transactions that were exempt from the
registration requirements of the Securities Act.




 


Annex I