Document:

exv4w1

 

Exhibit 4.1

Execution
Copy

REGISTRATION RIGHTS AGREEMENT

by and among

CROSSTEX ENERGY, L.P.

and

THE PURCHASERS PARTY HERETO

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	 
	ARTICLE I

DEFINITIONS

	 
	Section 1.1

	 	Definitions
	 	 	1	 
	Section 1.2

	 	Registrable Securities
	 	 	3	 
	 
	ARTICLE II

REGISTRATION RIGHTS

	 
	Section 2.1

	 	Shelf Registration
	 	 	3	 
	Section 2.2

	 	Piggyback Registration
	 	 	5	 
	Section 2.3

	 	Underwritten Offering
	 	 	6	 
	Section 2.4

	 	Sale Procedures
	 	 	7	 
	Section 2.5

	 	Cooperation by Holders
	 	 	9	 
	Section 2.6

	 	Restrictions on Public Sale by Holders of Registrable Securities
	 	 	9	 
	Section 2.7

	 	Expenses
	 	 	10	 
	Section 2.8

	 	Indemnification
	 	 	10	 
	Section 2.9

	 	Rule 144 Reporting
	 	 	12	 
	Section 2.10

	 	Transfer or Assignment of Registration Rights
	 	 	13	 
	Section 2.11

	 	Limitation on Subsequent Registration Rights
	 	 	13	 
	Section 2.12

	 	Aggregation of Registrable Securities
	 	 	13	 
	 
	ARTICLE III

MISCELLANEOUS

	 
	Section 3.1

	 	Communications
	 	 	13	 
	Section 3.2

	 	Successors and Assigns
	 	 	15	 
	Section 3.3

	 	Assignment of Rights
	 	 	15	 
	Section 3.4

	 	Recapitalization, Exchanges, etc. Affecting the Common Units
	 	 	15	 
	Section 3.5

	 	Specific Performance
	 	 	15	 
	Section 3.6

	 	Counterparts
	 	 	16	 
	Section 3.7

	 	Headings
	 	 	16	 
	Section 3.8

	 	Governing Law
	 	 	16	 
	Section 3.9

	 	Severability of Provisions
	 	 	16	 
	Section 3.10

	 	Entire Agreement
	 	 	16	 
	Section 3.11

	 	Amendment
	 	 	16	 
	Section 3.12

	 	No Presumption
	 	 	16	 

 

 

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
March 23, 2007 by and between CROSSTEX ENERGY, L.P., a Delaware limited partnership
(“Crosstex”), and each of the parties set forth on Schedule A hereto (the
“Purchasers”).

     WHEREAS, this Agreement is made in connection with the Closing of the issuance and sale of the
Purchased Units pursuant to the Senior Subordinated Series D Unit Purchase Agreement, dated as of
March 23, 2007, by and between Crosstex and the Purchasers (the “Purchase Agreement”);

     WHEREAS, Crosstex has agreed to provide the registration and other rights set forth in this
Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and

     WHEREAS, it is a condition to the obligations of the Purchasers and Crosstex under the
Purchase Agreement that this Agreement be executed and delivered.

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

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. The terms set forth below are used herein as so defined:

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

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

               “Closing” shall have the meaning set forth in the Purchase Agreement.

               “Closing Date” shall have the meaning set forth in the Purchase Agreement.

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

               “Common Units” shall have the meaning set forth in the Purchase Agreement.

               “Conversion Date” means March 23, 2009, on which the Senior Subordinated Series D
Units convert into Common Units.

 

 

               “Crosstex” has the meaning specified therefor in the introductory paragraph of this
Agreement.

               “Effectiveness Period” has the meaning specified therefor in Section 2.1(a) of
this Agreement.

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

               “Holder” means the record holder of any Registrable Securities.

               “Included Registrable Securities” has the meaning specified therefor in Section
2.2(a) of this Agreement.

               “Lock-up Date” shall have the meaning set forth in the Purchase Agreement.”

               “Losses” has the meaning specified therefor in Section 2.8(a) of this
Agreement.

               “Managing Underwriter” means, with respect to any Underwritten Offering, the book
running lead manager of such Underwritten Offering.

               “Non-Disclosure Agreements” shall have the meaning set forth in the Purchase
Agreement.

               “Other Holder” has the meaning specified in Section 2.2(b).

               “Other Registrable Securities” means Registrable Securities as defined in (i) that
certain Registration Rights Agreement, dated as of June 24, 2005, among Crosstex and the purchasers
named therein, (ii) that certain Registration Rights Agreement, dated as of November 1, 2005, among
Crosstex and the purchasers named therein and (iii) that certain Registration Rights Agreement,
dated as of June 29, 2006, among Crosstex and the purchasers named therein.

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

               “Piggyback Registration” has the meaning specified therefor in Section 2.2(a)
of this Agreement.

               “Purchase Agreement” has the meaning specified therefor in the Recitals of this
Agreement.

               “Purchased Units” shall have the meaning set forth in the Purchase Agreement.

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

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               “Registrable Securities” means the Common Units to be issued upon conversion of the
Purchased Units, all of which are subject to the rights provided herein until such rights terminate
pursuant to the provisions of this Agreement.

               “Registration Expenses” has the meaning specified therefor in Section 2.7(a)
of this Agreement.

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

               “Selling Expenses” has the meaning specified therefor in Section 2.7(a) of
this Agreement.

               “Selling Holder” means a Holder who is selling Registrable Securities pursuant to a
registration statement.

               “Shelf Registration Statement” means a registration statement under the Securities Act
to permit the resale of the Registrable Securities from time to time as permitted by Rule 415 of
the Securities Act (or any similar provision then in force under the Securities Act).

               “Underwritten Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a “bought deal” with one or more investment
banks.

     Section 1.2 Registrable Securities. Any Registrable Security will cease to be a Registrable Security
when (a) a registration statement covering such Registrable Security has been declared effective by
the Commission and such Registrable Security has been sold or disposed of pursuant to such
effective registration statement; (b) such Registrable Security has been disposed of pursuant to
any Section of Rule 144 (or any similar provision then in force) under the Securities Act; (c) such
Registrable Security is held by Crosstex or one of its subsidiaries; (d) such Registrable Security
has been sold in a private transaction in which the transferor’s rights under this Agreement are
not assigned to the transferee of such securities, or (e) two years from the Conversion Date.

ARTICLE II

REGISTRATION RIGHTS

     Section
2.1 Shelf Registration.

               (a) Shelf Registration. As soon as practicable following the Closing of the
acquisition of the Purchased Units pursuant to the terms of the Purchase Agreement, but in any
event within one year of the Closing, Crosstex shall prepare and file a Shelf Registration
Statement covering the Registrable Securities. Crosstex shall use its commercially reasonable
efforts to cause the Shelf Registration Statement to become effective no later than the Conversion
Date. A Shelf Registration Statement filed pursuant to this Section 2.1(a) shall be on
such appropriate registration form of the Commission as shall be selected by Crosstex; provided,
however, that if a prospectus supplement will be used in connection with the marketing of an

3

 

Underwritten Offering from the Shelf Registration Statement and the Managing Underwriter at any
time shall notify Crosstex in writing that, in the sole judgment of such Managing Underwriter,
inclusion of detailed information to be used in such prospectus supplement is of material
importance to the success of the Underwritten Offering of such Registrable Securities, Crosstex
shall use its commercially reasonable efforts to include such information in the prospectus.
Crosstex will use its commercially reasonable efforts to cause the Shelf Registration Statement
filed pursuant to this Section 2.1(a) to be continuously effective under the Securities Act
until the earliest of (i) all Registrable Securities covered by the Shelf Registration Statement
have been distributed in the manner set forth and as contemplated in the Shelf Registration
Statement, (ii) there are no longer any Registrable Securities outstanding or (iii) two years from
the Conversion Date (the “Effectiveness Period”). The Shelf Registration Statement when
declared effective (including the documents incorporated therein by reference) will comply as to
form in all material respects with all applicable requirements of the Securities Act and the
Exchange Act and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading. If the Shelf Registration Statement is not declared effective by the Conversion Date,
then the Purchasers (other than any Purchaser who has requested to not be included in the Shelf
Registration Statement) shall be entitled to a payment (with respect to each of such Purchaser’s
Purchased Units), as liquidated damages and not as a penalty, of 0.25% of the Purchase Price per
30-day period for the first sixty (60) days following the Conversion Date, with such payment amount
increasing by an additional 0.25% of the Purchase Price per 30-day period for each subsequent 60
days, up to a maximum of 1.00% of the Purchase Price per 30-day period (the “Liquidated
Damages”), until such time as the Shelf Registration Statement is declared effective or there
are no longer any Registrable Securities outstanding. The Liquidated Damages shall accrue on a
daily basis and be paid to each Purchaser in cash within ten (10) Business Days of the end of such
30-day period. The Purchasers’ rights (and any transferee’s rights pursuant to Section 2.10) under
this Section 2.1 shall terminate when such Registrable Securities become eligible for resale under
Rule 144(k) (or any similar provision then in force under the Securities Act).

               (b) Delay Rights. Notwithstanding anything to the contrary contained herein, Crosstex
may, upon written notice to any Selling Holder whose Registrable Securities are included in the
Shelf Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part
of the Shelf Registration Statement (in which event the Selling Holder shall discontinue sales of
the Registrable Securities pursuant to the Shelf Registration Statement) if (i) Crosstex is
pursuing an acquisition, merger, reorganization, disposition or other similar transaction and
Crosstex determines in good faith that Crosstex’s ability to pursue or consummate such a
transaction would be materially and adversely affected by any required disclosure of such
transaction in the Shelf Registration Statement or (ii) Crosstex has experienced some other
material non-public event the disclosure of which at such time, in the good faith judgment of
Crosstex, would materially and adversely affect Crosstex; however, in no
event shall any delay pursuant hereto exceed sixty (60) days in any one hundred-eighty (180)
day period or ninety (90) days in any 365 day period. Upon disclosure of such information or the
termination of the condition described above, Crosstex shall provide prompt notice to the Selling
Holders whose Registrable Securities are included in the Shelf Registration Statement, and shall
promptly terminate any suspension of sales it has put into effect and shall take such other actions
to permit registered sales of Registrable Securities as contemplated in this Agreement.

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     Section 2.2 Piggyback Registration.

               (a) Participation. Commencing on the Conversion Date, if Crosstex at any time
proposes to file a prospectus supplement to an effective Shelf Registration Statement with respect
to an Underwritten Offering of Common Units for its own account or to register any Common Units for
its own account for sale to the public in an Underwritten Offering or otherwise file any
registration statement with the Commission relating to any Underwritten Offering of Common Units
other than (x) a registration statement on Form S-8 (or any successor form) relating solely to
employee benefit plans or (y) a registration statement on Form S-4 (or any successor form) relating
solely to a Rule 145 transaction, then, as soon as practicable following the engagement of counsel
to Crosstex to prepare the documents to be used in connection with an Underwritten Offering,
Crosstex shall give notice of such proposed Underwritten Offering to the Holders, and such notice
shall offer the Holders the opportunity to include in such Underwritten Offering such number of
Registrable Securities (the “Included Registrable Securities”) as each such Holder may
request in writing (a “Piggyback Registration”); provided, however, that
Crosstex shall not be required to offer such opportunity to Holders if (i) the Holders do not offer
a minimum of $5,000,000 of Registrable Securities and Other Registrable Securities, in the
aggregate, (determined by multiplying the number of Registrable Securities and Other Registrable
Securities owned by the average of the closing price on NASDAQ for Common Units for the ten (10)
trading days preceding the date of such notice). The notice required to be provided in this
Section 2.2(a) to Holders shall be provided on a Business Day pursuant to Section
3.1 hereof and confirmation of receipt of such notice shall be requested in the notice. Holder
shall then have two (2) Business Days to request inclusion of Registrable Securities in the
Underwritten Offering. If no request for inclusion from a Holder is received within the specified
time, such Holder shall have no further right to participate in such Piggyback Registration. If,
at any time after giving written notice of its intention to undertake an Underwritten Offering and
prior to the closing of such Underwritten Offering, Crosstex shall determine for any reason not to
undertake or to delay such Underwritten Offering, Crosstex may, at its election, give written
notice of such determination to the Selling Holders and, (x) in the case of a determination not to
undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included
Registrable Securities in connection with such terminated Underwritten Offering, and (y) in the
case of a determination to delay such Underwritten Offering, shall be permitted to delay offering
any Included Registrable Securities for the same period as the delay in the Underwritten Offering.
Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of
such Selling Holder’s Registrable Securities in such offering by giving written notice to Crosstex
of such withdrawal up to and including the time of pricing of such offering. No Holders shall be
entitled to participate in any such Underwritten Offering under this Section 2.2(a) unless such
Holder (together with any
Affiliates that are Selling Holders) participating therein holds at least fifteen million
($15,000,000) of Registrable Securities and Other Registrable Securities, in the aggregate,
(determined by multiplying the number of Registrable Securities and Other Registrable Securities
owned by the average of the closing price for Common Units for the ten (10) trading days preceding
the date of such notice).

               (b) Priority of Piggyback Registration. If the Managing Underwriter or Underwriters
of any proposed Underwritten Offering of Common Units included in a Piggyback Registration advises
Crosstex that the total amount of Common Units which the Selling Holders

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and any other Persons
intend to include in such offering exceeds the number which can be sold in such offering without
being likely to have an adverse effect on the price, timing or distribution of the Common Units
offered or the market for the Common Units, then the Common Units to be included in such
Underwritten Offering shall include the number of Registrable Securities that such Managing
Underwriter or Underwriters advises Crosstex can be sold without having such adverse effect, with
such number to be allocated pro rata among the Selling Holders and any other
Persons who have been or are granted registration rights on or after the date of this Agreement
(“Other Holders”) who have requested participation in the Piggyback Registration (based,
for each such Selling Holder or Other Holder, on the percentage derived by dividing (A) the number
of Registrable Securities proposed to be sold by such Selling Holder or such Other Holder in such
offering; by (B) the aggregate number of Common Units proposed to be sold by all Selling Holders
and all Other Holders in the Piggyback Registration.

     Section 2.3 Underwritten Offering.

               (a) S-3 Registration. In the event that a Selling Holder (together with any
Affiliates that are Selling Holders) elects to dispose of Registrable Securities under the Shelf
Registration Statement pursuant to an Underwritten Offering of at least fifteen million
($15,000,000) of Registrable Securities and Other Registrable Securities, Crosstex shall, at the
request of such Selling Holder, enter into an underwriting agreement in customary form with the
Managing Underwriter or Underwriters, which shall include, among other provisions, indemnities to
the effect and to the extent provided in Section 2.8, and shall take all such other
reasonable actions as are requested by the Managing Underwriter in order to expedite or facilitate
the disposition of the Registrable Securities; provided, however, that Crosstex management will not
be required to participate in a roadshow or similar marketing effort.

               (b) General Procedures. In connection with any Underwritten Offering (i) under
Section 2.2 of this Agreement, Crosstex shall be entitled to select the Managing
Underwriter or Underwriters, and (ii) under Section 2.3 of this Agreement, the Selling
Holders shall be entitled to select the Managing Underwriter or Underwriters. In connection with
an Underwritten Offering under Section 2.2 or Section 2.3 hereof, each Selling
Holder and Crosstex shall enter into an underwriting agreement with the Managing Underwriter or
Underwriters which contains such representations, covenants, indemnities and other rights and
obligations as are customary in underwriting agreements for firm commitment offerings of equity
securities. No Selling Holder may participate in such Underwritten Offering unless such Selling
Holder agrees to sell its Registrable Securities on the basis provided in such underwriting
agreement and
completes and executes all questionnaires, powers of attorney, indemnities and other documents
reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at
its option, require that any or all of the representations and warranties by, and the other
agreements on the part of, Crosstex to and for the benefit of such underwriters also be made to and
for such Selling Holder’s benefit and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be conditions precedent to
its obligations. No Selling Holder shall be required to make any representations or warranties to
or agreements with Crosstex or the underwriters other than representations, warranties or
agreements regarding such Selling Holder and its ownership of the securities being registered on
its behalf and its intended method of distribution and any other representation required by law.
If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect

6

 

to
withdraw therefrom by notice to Crosstex and the Managing Underwriter; provided,
however, that such withdrawal must be made prior to the pricing of such Underwritten
Offering hereof to be effective. No such withdrawal or abandonment shall affect Crosstex’s
obligation to pay Registration Expenses.

     Section 2.4 Sale Procedures. In connection with its obligations contained in Sections 2.1,
2.2 and 2.3, Crosstex will, as expeditiously as possible:

               (a) prepare and file with the Commission such amendments and supplements to the Shelf
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
the Shelf Registration Statement effective for the Effectiveness Period and as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Shelf Registration Statement;

               (b) furnish to each Selling Holder (i) as far in advance as reasonably practicable before
filing the Shelf Registration Statement or any other registration statement contemplated by this
Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete
drafts of all such documents proposed to be filed (including exhibits and each document
incorporated by reference therein to the extent then required by the rules and regulations of the
Commission), and provide each such Selling Holder the opportunity to object to any information
pertaining to such Selling Holder and its plan of distribution that is contained therein and make
the corrections reasonably requested by such Selling Holder with respect to such information prior
to filing the Shelf Registration Statement or such other registration statement and the prospectus
included therein or any supplement or amendment thereto, and (ii) such number of copies of the
Shelf Registration Statement or such other registration statement and the prospectus included
therein and any supplements and amendments thereto as such Persons may reasonably request in order
to facilitate the public sale or other disposition of the Registrable Securities covered by such
Shelf Registration Statement or other registration statement;

               (c) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Shelf Registration Statement or any other registration
statement contemplated by this Agreement under the securities or blue sky laws of such
jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided that Crosstex will not be required to qualify
generally to transact business in any jurisdiction where it is not then required to so qualify or
to take any action which would subject it to general service of process in any such jurisdiction
where it is not then so subject;

               (d) promptly notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i) the filing of the
Shelf Registration Statement or any other registration statement contemplated by this Agreement or
any prospectus included therein or any amendment or supplement thereto, and, with respect to such
Shelf Registration Statement or any other registration statement or any post-effective amendment
thereto, when the same has become effective; and (ii) any written comments from the Commission with
respect to any filing referred to in clause (i) and any written request by the Commission for
amendments or supplements to the Shelf Registration

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Statement or any other registration statement
or any prospectus or prospectus supplement thereto;

               (e) immediately notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i) the happening of any
event as a result of which the prospectus contained in the Shelf Registration Statement or any
other registration statement contemplated by this Agreement or any supplemental amendment thereto,
includes an untrue statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing; (ii) the issuance or threat of issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration Statement or any other registration
statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or
(iii) the receipt by Crosstex of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the applicable securities or blue sky
laws of any jurisdiction. Following the provision of such notice, Crosstex agrees to as promptly
as practicable amend or supplement the prospectus or prospectus supplement or take other
appropriate action so that the prospectus or prospectus supplement does not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the circumstances then
existing and to take such other action as is necessary to remove a stop order, suspension, threat
thereof or proceedings related thereto;

               (f) upon request and subject to appropriate confidentiality obligations, furnish to each
Selling Holder copies of any and all transmittal letters or other correspondence with the
Commission or any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to such offering of
Registrable Securities;

               (g) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel
for Crosstex, dated the effective date of the applicable registration statement or the date of any
amendment or supplement thereto, preliminary or prospectus supplement, and a letter of like kind
dated the date of the closing under the underwriting agreement, and (ii) a “cold comfort” letter,
dated the effective date of the applicable registration statement or the date of any amendment or
supplement thereto, preliminary or prospectus supplement and a letter of
like kind dated the date of the closing under the underwriting agreement, in each case, signed
by the independent public accountants who have certified Crosstex’s financial statements included
or incorporated by reference into the applicable registration statement, and each of the opinion
and the “cold comfort” letter shall be in customary form and covering substantially the same
matters with respect to such registration statement (and the prospectus included therein and any
supplement thereto) and as are customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to the underwriters in underwritten offerings of securities, such
other matters as such underwriters may reasonably request;

               (h) otherwise use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least 12 months, but not more than 18
months, beginning with the first full calendar month after the effective date

8

 

of such registration
statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 promulgated thereunder;

               (i) make available to the appropriate representatives of the Managing Underwriter and Selling
Holders access to such information and Crosstex personnel as is reasonable and customary to enable
such parties to establish a due diligence defense under the Securities Act; provided that Crosstex
need not disclose any information to any such representative unless and until such representative
has entered into a confidentiality agreement with Crosstex;

               (j) cause all such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange or nationally recognized quotation system on which similar securities
issued by Crosstex are then listed;

               (k) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of Crosstex to enable the Selling Holders to consummate
the disposition of such Registrable Securities;

               (l) provide a transfer agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such registration statement; and

               (m) enter into customary agreements and take such other actions as are reasonably requested by
the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition
of such Registrable Securities.

     Each Selling Holder, upon receipt of notice from Crosstex of the happening of any event of the
kind described in subsection (e) of this Section 2.4, shall forthwith discontinue
disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (e) of this Section 2.4 or
until it is advised in writing by Crosstex that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings incorporated by reference in the
prospectus, and, if so directed by Crosstex, such Selling Holder will, or will request the Managing
Underwriter or underwriters, if any, to deliver to Crosstex (at Crosstex’s expense) all copies in
their possession
or control, other than permanent file copies then in such Selling Holder’s possession, of the
prospectus and any prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice.

     Section 2.5 Cooperation by Holders. Crosstex shall have no obligation to include in the Shelf
Registration Statement units of a Holder or in a Piggyback Registration units of a Selling Holder
who has failed to timely furnish such information which, in the opinion of counsel to Crosstex, is
reasonably required in order for the registration statement or prospectus supplement, as
applicable, to comply with the Securities Act.

     Section 2.6 Restrictions on Public Sale by Holders of Registrable Securities. For a period of one year
following the Conversion Date, each Holder of Registrable Securities who is included in the Shelf
Registration Statement agrees not to effect any public sale or distribution of the Registrable
Securities during the 30 calendar day period beginning on the date of a

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prospectus supplement filed
with the Commission with respect to the pricing of an Underwritten Offering, or other prospectus
(including any free writing prospectus) containing the terms of the pricing of such Underwritten
Offering, provided that the duration of the foregoing restrictions shall be no longer than the
duration of the shortest restriction generally imposed by the underwriters on the officers or
directors or any other unitholder of Crosstex on whom a restriction is imposed and provided further
that such Selling Holder (together with any Affiliates that are Selling Holders) owns at least
fifteen million ($15,000,000) of Registrable Securities, and Other Registration Securities, in the
aggregate (determined by multiplying the number of Registrable Securities and Other Registrable
Securities owned by the average of the closing price for Common Units for the ten (10) trading days
preceding the date of such filing).

     Section 2.7 Expenses.

               (a) Certain Definitions. “Registration Expenses” means all expenses incident
to Crosstex’s performance under or compliance with this Agreement to effect the registration of
Registrable Securities in a Shelf Registration pursuant to Section 2.1, a Piggyback
Registration pursuant to Section 2.2, or an Underwritten Offering pursuant to Section
2.3, and the disposition of such securities, including, without limitation, all registration,
filing, securities exchange listing and NASDAQ fees, all registration, filing, qualification and
other fees and expenses of complying with securities or blue sky laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and registrars,
all word processing, duplicating and printing expenses, the fees and disbursements of counsel and
independent public accountants for Crosstex, including the expenses of any special audits or “cold
comfort” letters required by or incident to such performance and compliance. Except as otherwise
provided in Section 2.8 hereof, Crosstex shall not be responsible for legal fees incurred
by Holders in connection with the exercise of such Holders’ rights hereunder. In addition,
Crosstex shall not be responsible for any “Selling Expenses,” which means all underwriting
fees, discounts and selling commissions and transfer taxes allocable to the sale of the Registrable
Securities.

               (b) Expenses. Crosstex will pay all reasonable Registration Expenses in connection
with a Piggyback Registration or Underwritten Offering, whether or not any sale is made pursuant to
the Piggyback Registration or Underwritten Offering. Each Selling Holder shall pay all Selling
Expenses in connection with any sale of its Registrable Securities hereunder.

     Section 2.8 Indemnification.

               (a) By Crosstex. In the event of a registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, Crosstex will indemnify and hold harmless each
Selling Holder thereunder, its directors, officers, employees, agents and managers, and each
underwriter, pursuant to the applicable underwriting agreement with such underwriter, of
Registrable Securities thereunder and each Person, if any, who controls such Selling Holder or
underwriter within the meaning of the Securities Act and the Exchange Act, against any losses,
claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”), joint or several, to which such Selling Holder or underwriter or
controlling Person may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any

10

 

material fact contained in the Shelf Registration Statement or any other registration statement
contemplated by this Agreement, any preliminary prospectus or final prospectus contained therein,
or any free writing prospectus related thereto, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of a prospectus, in
light of the circumstances under which they were made) not misleading, and will reimburse each such
Selling Holder, its directors and officers, each such underwriter and each such controlling Person
for any legal or other expenses reasonably incurred by them in connection with investigating or
defending any such Loss or actions or proceedings; provided, however, that Crosstex
will not be liable in any such case if and to the extent that any such Loss arises out of or is
based upon an untrue statement or alleged untrue statement or omission or alleged omission so made
in strict conformity with information furnished by such Selling Holder, such underwriter or such
controlling Person in writing specifically for use in the Shelf Registration Statement or such
other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such Selling
Holder or any such director, officer, employee, agent, manager or controlling Person, and shall
survive the transfer of such securities by such Selling Holder.

               (b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to
indemnify and hold harmless Crosstex, its directors, officers, employees and agents and each
Person, if any, who controls Crosstex within the meaning of the Securities Act or of the Exchange
Act to the same extent as the foregoing indemnity from Crosstex to the Selling Holders, but only
with respect to information regarding such Selling Holder furnished in writing by or on behalf of
such Selling Holder expressly for inclusion in the Shelf Registration Statement or prospectus
supplement relating to the Registrable Securities, or any amendment or supplement thereto;
provided, however, that the liability of each Selling Holder shall not be greater
in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such
Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

               (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party other than under this Section 2.8(c) except to the
extent that the indemnifying party is materially prejudiced by such failure. In any action brought
against any indemnified party, it shall notify the indemnifying party of the commencement thereof.
The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified
party and, after notice from the indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 2.8 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided, however, that, (i)
if the indemnifying party has failed to assume the defense and employ counsel or (ii) if the
defendants in any such action include both the indemnified party and the indemnifying party and
counsel to the indemnified party shall have concluded that there

11

 

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

               (d) Contribution. If the indemnification provided for in this Section 2.8 is
held by a court or government agency of competent jurisdiction to be unavailable to Crosstex or any
Selling Holder or is insufficient to hold them harmless in respect of any Losses, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of Crosstex on the one hand and of such Selling Holder on
the other in connection with the statements or omissions which resulted in such Losses, as well as
any other relevant equitable considerations; provided, however, that in no event
shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar
amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of
Registrable Securities giving rise to such indemnification. The relative fault of Crosstex on the
one hand and each Selling Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact has been made by, or relates to, information supplied by
such party, and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of this paragraph
shall be deemed to include any legal and other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any Loss which is the subject of this
paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who is not guilty of such
fraudulent misrepresentation.

               (e) Other Indemnification. The provisions of this Section 2.8 shall be in
addition to any other rights to indemnification or contribution which an indemnified party may have
pursuant to law, equity, contract or otherwise.

     Section 2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Securities to the public
without registration, Crosstex agrees to use its commercially reasonable efforts to:

12

 

               (a) Make and keep public information regarding Crosstex available, as those terms are
understood and defined in Rule 144 of the Securities Act, at all times from and after the date
hereof;

               (b) File with the Commission in a timely manner all reports and other documents required of
Crosstex under the Securities Act and the Exchange Act at all times from and after the date hereof;
and

               (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request a copy of the most recent annual or quarterly report of Crosstex, and such other reports
and documents so filed as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any such securities without registration.

     Section 2.10 Transfer or Assignment of Registration Rights. The rights to cause Crosstex to register
Registrable Securities granted to the Purchasers by Crosstex under this Article II may be
transferred or assigned by the Purchasers to one or more transferee(s) or assignee(s) of such
Registrable Securities, who (a) are Affiliates of such Purchaser, or (b) hold, collectively with
its or their Affiliates, after giving effect to such transfer or assignment, at least fifteen
million ($15,000,000) of Registrable Securities and Other Registrable Securities. Crosstex shall
be given written notice prior to any said transfer or assignment, stating the name and address of
each such transferee and identifying the securities with respect to which such registration rights
are being transferred or assigned, and each such transferee shall assume in writing responsibility
for its obligations of the Purchasers under this Agreement.

     Section 2.11 Limitation on Subsequent Registration Rights. From and after the date hereof, Crosstex
shall not, without the prior written consent of the Holders of a majority of the outstanding
Registrable Securities, enter into any agreement with any current or future holder of any
securities of Crosstex that would allow such current or future holder to require Crosstex to
include securities in any registration statement filed by Crosstex on a basis that is superior in
any way to the piggyback rights granted to the Purchasers hereunder.

     Section 2.12
Aggregation of Registrable Securities.   All Registrable Securities held or acquired by Persons who are Affiliates of one another shall
be aggregated together for the purpose of determining the availability of any rights under this
Agreement.

ARTICLE III

MISCELLANEOUS

     Section 3.1
Communications. All notices and other communications provided for or permitted hereunder
shall be made in writing by facsimile and courier service or personal delivery:

               (a) If to Lehman Brothers MLP Opportunity Fund L.P.:

                    399 Park Avenue, 9th Floor

13

 

	 	 	 
	 

	 	New York, New York 10022
	 

	 	Attention: Michael J. Cannon
	 

	 	Facsimile: (646) 758-4208
	 

	 	Internet electronic mail: mcannon2@lehman.com
	 
	 	 
	 

	 	If to ING Investment Management LLC, as Agent:
	 
	 	 
	 

	 	ING Investment Management LLC
	 

	 	5780 Powers Ferry Road NW, Suite 300
	 

	 	Atlanta, GA 30327-4349
	 

	 	Attention: Ryan Simmons
	 

	 	Facsimile: 770-690-5471
	 

	 	Internet Electronic Mail: ryan.simmons@inginvestment.com
	 
	 	 
	 

	 	If to Citigroup Global Markets Inc.:
	 
	 	 
	 

	 	Citigroup Global Markets Inc.
	 

	 	390 Greenwich Street, 3rd Floor
	 

	 	New York, NY 10013
	 

	 	Attention: Brendan O’Dea
	 

	 	Facsimile: (212) 723 8085
	 

	 	Internet Electronic Mail: brendan.odea@citigroup.com
	 
	 	 
	 

	 	If to Tortoise Energy
Infrastructure Corporation or Tortoise Energy Capital Corporation:
	 
	 	 
	 

	 	Tortoise Energy Infrastructure
Corporation / Tortoise Energy Capital Corporation
	 

	 	10801 Mastin Blvd, Suite 222
	 

	 	Overland Park, Kansas 66210
	 

	 	Attn: Terry Matlack
	 

	 	Facsimile: 913-981-1021
	 

	 	Internet Electronic Mail: tmatlack@tortoiseadvisors.com
	 
	 	 
	 

	 	If to Fiduciary/Claymore MLP Opportunity Fund:
	 
	 	 
	 

	 	Fiduciary Asset Management, LLC
	 

	 	8112 Maryland Avenue, Suite 400
	 

	 	Saint Louis, MP 63105-3700
	 

	 	Attention: James J. Cunnane, Jr.
	 

	 	Facsimile: 314-446-6707
	 

	 	Internet Electronic Mail: jcunnance@famco.com
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Vinson & Elkins L.L.P.
	 

	 	1001 Fannin, Suite 2500

14

 

	 	 	 
	 

	 	Houston, Texas 77002
	 

	 	Attention: Dan Fleckman
	 

	 	Facsimile: (713) 615-5859
	 

	 	Internet electronic mail: dfleckman@velaw.com
	 
	 	 
	 

	 (b) If to Crosstex:
	 
	 	 
	 

	 	Crosstex Energy, L.P.
	 

	 	2501 Cedar Springs
	 

	 	Dallas, Texas 75201
	 

	 	Attention: Barry E. Davis
	 

	 	Facsimile: (214) 953-9500
	 

	 	Internet electronic mail: barry.davis@crosstexenergy.com
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Baker Botts L.L.P.
	 

	 	2001 Ross Avenue
	 

	 	Dallas, Texas 75201-2980
	 

	 	Attention: Doug Rayburn
	 

	 	Facsimile: (214) 661-4634
	 

	 	Internet electronic mail: doug.rayburn@bakerbotts.com

or, if to a transferee of any Purchaser, to the transferee at the address provided pursuant to
Section 2.10 above. All such notices and communications shall be deemed to have been
received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent
via facsimile or sent via Internet electronic mail; and when actually received, if sent by any
other means.

     Section 3.2 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties, including subsequent Holders of Registrable
Securities to the extent permitted herein.

     Section 3.3 Assignment of Rights. All or any portion of the rights and obligations of the Purchasers
under this Agreement may be transferred or assigned by such Purchaser in accordance with Section
2.10 hereof.

     Section 3.4 Recapitalization, Exchanges, etc. Affecting the Common Units. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to any and all units of
Crosstex or any successor or assign of Crosstex (whether by merger, consolidation, sale of assets
or otherwise) which may be issued in respect of, in exchange for or in substitution of, the
Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and
the like occurring after the date of this Agreement.

     Section 3.5 Specific Performance. Damages in the event of breach of this Agreement by a party hereto
may be difficult, if not impossible, to ascertain, and it is therefore agreed that

15

 

each such
Person, in addition to and without limiting any other remedy or right it may have, will have the
right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining
any such breach, and enforcing specifically the terms and provisions hereof, and each of the
parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction
or competence of the court to grant such an injunction or other equitable relief. The existence of
this right will not preclude any such Person from pursuing any other rights and remedies at law or
in equity which such Person may have.

     Section 3.6 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

     Section 3.7
Headings. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

     Section 3.8
Governing Law. The laws of the State of Texas shall govern this Agreement without regard
to principles of conflict of laws.

     Section 3.9 Severability of Provisions. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

     Section 3.10 Entire Agreement. This Agreement, the Purchase Agreement and the Non-Disclosure Agreement
are intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the
subject matter contained herein or therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein with respect to the
rights granted by Crosstex set forth herein or therein. This Agreement, the Purchase Agreement and
the Non-Disclosure Agreement supersede all prior agreements and understandings between the parties
with respect to such subject matter.

     Section 3.11 Amendment. This Agreement may be amended only by means of a written amendment signed by
Crosstex and the Holders of a majority of the then outstanding Registrable Securities; provided,
however, that no such amendment shall adversely affect the rights of any Holder hereunder without
the consent of such Holder.

     Section 3.12 No Presumption. In the event any claim is made by a party relating to any conflict,
omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be
implied by virtue of the fact that this Agreement was prepared by or at the request of a particular
party or its counsel.

[The remainder of this page is intentionally left blank.]

16

 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 
	 	 	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
 

   William W. Davis
	 	 
	 

	 	 	 	   Executive Vice President and Chief Financial
Officer	 	 

[Signature Page to Registration Rights Agreement]

 

	 	 	 	 	 	 	 
	 	 	LEHMAN BROTHERS MLP OPPORTUNITY FUND L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Lehman Brothers MLP Opportunity Associates L.P.,
its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Lehman Brothers MLP Opportunity Associates
L.L.C., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Cannon
 

Name: Michael J. Cannon
	 	 
	 

	 	 	 	Title: Managing Director	 	 

[Signature Page to Registration Rights Agreement]

 

 

TORTOISE
ENERGY INFRASTRUCTURE CORPORATION

TORTOISE ENERGY CAPITAL CORPORATION

	 	 	 	 	 	 	 
	 

	 	By:
	 	    /s/ Terry Matlack
 

Name: Terry Matlack
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

[Signature Page to Registration Rights Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James J. Cunnane, Jr.
 

Name: James J. Cunnane, Jr.

Title: Vice President
	 	 

[Signature Page to Registration Rights Agreement]

 

 

	 	 	 	 	 
	 	

CITIGROUP GLOBAL MARKETS, INC.

 	 
	 	By:  	/s/ Bret Engelkemier
 	 
	 	 	Name:  	Bret Engelkemier 	 
	 	 	Title:  	Managing Director 	 
	 

 [Signature Page to Registration Rights Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	ING LIFE INSURANCE AND ANNUITY COMPANY	 	 
	 
	 	 	ING USA ANNUITY AND
LIFE INSURANCE COMPANY	 	 
	 
	 	 	RELIASTAR LIFE INSURANCE COMPANY	 	 
	 
	 	 	SECURITY LIFE OF DENVER
INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By: ING Investment Management LLC, as Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Chris Lyons
 

Name: Chris Lyons
	 	 
	 

	 	 	 	 	 	Title: Senior Vice President	 	 

[Signature Page to Registration Rights Agreement]

 

 

Schedule A

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocated	 
	Purchaser	 	Purchased Units	 	 	Purchase Price	 
	Lehman Brothers MLP Opportunity Fund L.P.
	 	 	968,835	 	 	$	25,000,012.11	 
	ING Life Insurance and Annuity Company
	 	 	441,789	 	 	$	11,400,011.72	 
	ING USA Annuity and Life Insurance Company
	 	 	263,523	 	 	$	6,800,000.19	 
	ReliaStar Life Insurance Company
	 	 	77,507	 	 	$	2,000,006.13	 
	Security Life of Denver Insurance Company
	 	 	186,016	 	 	$	4,799,994.07	 
	Citigroup Global Markets Inc.
	 	 	775,068	 	 	$	20,000,009.69	 
	Tortoise Energy Infrastructure Corporation
	 	 	193,767	 	 	$	5,000,002.42	 
	Tortoise Energy Capital Corporation
	 	 	581,301	 	 	$	15,000,007.27	 
	Fiduciary/Claymore MLP Opportunity Fund
	 	 	387,534	 	 	$	10,000,004.84	 
	 
	 	 	 	 	 	 
	Total
	 	 	3,875,340	 	 	$	100,000,048.43	 
	 
	 	 	 	 	 	 

Schedule Aexv10w1

 

Exhibit 10.1

Execution Copy

SENIOR SUBORDINATED SERIES D UNIT

PURCHASE AGREEMENT

by and among

CROSSTEX ENERGY, L.P.

and

THE PURCHASERS PARTY HERETO

 

 

Table of Contents

	 	 	 	 	 
	ARTICLE I

DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 1.01 Definitions

	 	 	1	 
	Section 1.02 Accounting Procedures and Interpretation

	 	 	5	 
	 
	 	 	 	 
	ARTICLE II

AGREEMENT TO SELL AND PURCHASE
	 	 	 	 
	 
	 	 	 	 
	Section 2.01 Authorization of Sale of Senior Subordinated Series D Units

	 	 	5	 
	Section 2.02 Sale and Purchase

	 	 	5	 
	Section 2.03 Closing

	 	 	5	 
	Section 2.04 Crosstex Deliveries

	 	 	5	 
	Section 2.05 Purchasers’ Deliveries

	 	 	6	 
	Section 2.06 Independent Nature of Purchasers’ Obligations and Rights

	 	 	6	 
	 
	 	 	 	 
	ARTICLE III

REPRESENTATIONS AND WARRANTIES AND

COVENANTS RELATED TO CROSSTEX
	 	 	 	 
	 
	 	 	 	 
	Section 3.01 Partnership Existence

	 	 	7	 
	Section 3.02 Capitalization and Valid Issuance of Purchased Units

	 	 	7	 
	Section 3.03 Crosstex SEC Documents

	 	 	9	 
	Section 3.04 No Material Adverse Change

	 	 	9	 
	Section 3.05 Litigation

	 	 	10	 
	Section 3.06 No Conflicts; Compliance with Laws

	 	 	10	 
	Section 3.07 Authority, Enforceability

	 	 	10	 
	Section 3.08 Approvals

	 	 	10	 
	Section 3.09 MLP Status

	 	 	11	 
	Section 3.10 Investment Company Status

	 	 	11	 
	Section 3.11 Certain Fees

	 	 	11	 
	Section 3.12 No Side Agreements

	 	 	11	 
	Section 3.13 No Registration

	 	 	11	 
	Section 3.14 Insurance

	 	 	11	 
	Section 3.15 Internal Accounting Controls

	 	 	11	 
	Section 3.16 Form S-3 Eligibility

	 	 	12	 
	Section 3.17 Listing and Maintenance Requirements

	 	 	12	 
	Section 3.18 Material Agreements

	 	 	12	 
	Section 3.19 Subsequent Offerings

	 	 	12	 
	 
	 	 	 	 
	ARTICLE IV

REPRESENTATIONS AND WARRANTIES AND

COVENANTS OF THE PURCHASERS
	 	 	 	 
	 
	 	 	 	 
	Section 4.01 Existence

	 	 	12	 
	Section 4.02 Authorization, Enforceability

	 	 	12	 
	Section 4.03 No Breach

	 	 	13	 
	Section 4.04 Certain Fees

	 	 	13	 

i

 

	 	 	 	 	 
	Section 4.05 No Side Agreements

	 	 	13	 
	Section 4.06 Unregistered Securities

	 	 	13	 
	Section 4.07 Lock-Up

	 	 	14	 
	 
	 	 	 	 
	ARTICLE V

INDEMNIFICATION, COSTS AND EXPENSES
	 	 	 	 
	 
	 	 	 	 
	Section 5.01 Indemnification by Crosstex

	 	 	14	 
	Section 5.02 Indemnification by the Purchasers

	 	 	15	 
	Section 5.03 Indemnification Procedure

	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI

MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 6.01 Interpretation and Survival of Provisions

	 	 	16	 
	Section 6.02 Survival of Provisions

	 	 	16	 
	Section 6.03 No Waiver; Modifications in Writing

	 	 	16	 
	Section 6.04 Binding Effect; Assignment

	 	 	17	 
	Section 6.05 Non-Disclosure

	 	 	17	 
	Section 6.06 Communications

	 	 	18	 
	Section 6.07 Removal of Legend

	 	 	20	 
	Section 6.08 Entire Agreement

	 	 	20	 
	Section 6.09 Governing Law

	 	 	20	 
	Section 6.10 Execution in Counterparts

	 	 	20	 

Exhibit A — Form of Registration Rights Agreement

Exhibit B — Form of Opinion of Crosstex Counsel

Exhibit C — Form of Sixth Amended and Restated Agreement of Limited Partnership

ii

 

SENIOR SUBORDINATED SERIES D UNIT PURCHASE AGREEMENT

     This SENIOR SUBORDINATED SERIES D UNIT PURCHASE AGREEMENT, dated as of March 23, 2007
(this “Agreement”), is by and between CROSSTEX ENERGY, L.P., a Delaware limited partnership
(“Crosstex”), and each of the purchasers set forth in Schedule A hereto (“the
Purchasers”).

     WHEREAS, Crosstex desires to sell to each of the Purchasers, and each of the Purchasers
desires, severally and not jointly, to purchase from Crossetex, certain Senior Subordinated Series
D Units, in accordance with the provisions of this Agreement; and

     WHEREAS, Crosstex has agreed to provide the Purchasers with certain registration rights with
respect to the Common Units underlying the Senior Subordinated Series D Units acquired pursuant
hereto.

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

 

 

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

     “Common Units” means the common units representing limited partner interests in
Crosstex.

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

     “Crosstex Credit Facility” means the Fourth Amended and Restated Credit Agreement
dated as of November 1, 2005, by and among Crosstex, Crosstex Energy Services, L.P. and the lenders
named therein, as amended as of the date hereof.

     “Crosstex Financial Statements” shall have the meaning specified in Section
3.03.

     “Crosstex Master Shelf Agreement” means the Amended and Restated Note Purchase
Agreement, dated as of July 25, 2006 among Crosstex Energy, L.P., Crosstex Energy Services, L.P.,
Prudential Investment Management, Inc. and certain other parties, as amended as of the date hereof.

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

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

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

     “Crosstex SEC Documents” shall have the meaning specified in Section 3.03.

     “Delaware LLC Act” shall have the meaning specified in Section 3.02

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

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

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

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

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

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

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

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

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

     “Lock-Up Date” means 90 days from the Closing Date.

     “NASDAQ” means the NASDAQ Global Select Market.

     “Non-Disclosure Agreements” means collectively (i) the Letter Agreement, dated January
31, 2007, by and between Lehman Brothers MLP Partners, L.P. and Crosstex, (ii) the Letter
Agreement, dated February 5, 2007, by and between Kayne Anderson Capital Advisors, L.P. and
Crosstex, (iii) the Letter Agreement, dated February 7, 2007, between Fiduciary Asset Management,
LLC and Crosstex, (iv) the Letter Agreement, dated February 7, 2007, between Tortoise Capital
Advisors, LLC and Crosstex, (v) the Letter Agreement, dated February 8, 2007, between Citigroup
Global Markets, Inc. and Crosstex, (vi) the Letter Agreement, dated February 22, 2007, between ING
Investment Management LLC and Crosstex.

     “Partnership Agreement” means the Sixth Amended and Restated Agreement of Limited
Partnership of Crosstex dated as of the date hereof.

     “Partnership Securities” means any class or series of equity interest in Crosstex (but
excluding any options, rights, warrants and appreciation rights relating to an equity interest in
Crosstex), including without limitation Common Units, Senior Subordinated Series C Units,
Senior Subordinated Series D Units and Subordinated Units (each as defined in the Partnership
Agreement) and Incentive Distribution Rights (as defined in the Partnership Agreement).

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     “Permits” means, with respect to Crosstex or any of its Subsidiaries, any licenses,
permits, variances, consents, authorizations, waivers, grants, franchises, concessions, exemptions,
orders, registrations and approvals of Governmental Authorities or other Persons necessary for the
ownership, leasing, operation, occupancy or use of its Properties or the conduct of its businesses
as currently conducted or proposed to be conducted.

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

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

     “Purchase Price” means $100,000,048.43 which is the aggregate of each Purchaser’s
Allocated Purchase Price as set forth on Schedule A hereto.

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

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

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

     “Registration Rights Agreement” means the Registration Rights Agreement, to be entered
into at the Closing, between Crosstex and the Purchasers in the form attached hereto as Exhibit
A.

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

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

     “Senior Subordinated Series D Unit Price” means $25.80.

     “Senior Subordinated Series D Units” means the senior subordinated Series D units
representing limited partner interests in Crosstex and any Common Units into which such Senior
Subordinated Series D Units convert.

     “Subordinated Units” means the subordinated units representing limited partner
interests in Crosstex.

     “Subsidiary” means, as to any Person, any corporation or other entity of which: (i)
such Person or a Subsidiary of such Person is a general partner or manager; (ii) at least a
majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a
majority of the board of directors or similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity interest of any other class or classes of
such corporation or other entity shall have or might have voting power by reason of the happening of

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any contingency) is at the time directly or indirectly owned or controlled by such Person or one
or more of its Subsidiaries; or (iii) any corporation or other entity as to which such Person
consolidates for accounting purposes.

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

ARTICLE II

AGREEMENT TO SELL AND PURCHASE

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

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

          Section 2.03 Closing. Subject to the terms and conditions hereof, the consummation of the
purchase and sale of the Purchased Units hereunder (the “Closing”) shall take place on the
date of execution of this Agreement (the “Closing Date”) at the offices of Vinson & Elkins
L.L.P., First City Tower, 1001 Fannin, Houston, Texas 77002.

          Section 2.04 Crosstex Deliveries. At the Closing, subject to the terms and conditions
hereof, Crosstex will deliver, or cause to be delivered, to the Purchasers:

          (a) A certificate or certificates representing the Purchased Units (bearing the legend set
forth in Section 4.06(d)) and meeting the requirements of the Partnership Agreement,
free and clear of any Liens, other than transfer restrictions under applicable federal and
state securities laws;

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

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

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

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

          (f) The Registration Rights Agreement in substantially the form attached hereto as Exhibit
A, which shall have been duly executed by Crosstex; and

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

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

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

          (b) The Registration Rights Agreement in substantially the form attached hereto as Exhibit
A, which shall have been duly executed by each Purchaser; and

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

          Section 2.06 Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Basic Document are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Basic Document. The failure or waiver of performance under any
Basic Document by any Purchaser does not excuse
performance by any other Purchaser. Nothing contained herein or in any other Basic Document, and
no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Basic Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the rights arising out
of this Agreement or out of the other Basic Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such purpose.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES AND COVENANTS

RELATED TO CROSSTEX

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

          Section 3.01 Partnership Existence. Crosstex (a) is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware; and (b) has all
requisite power and authority, and has all governmental licenses, authorizations, consents and
approvals necessary, to own, lease, use and operate its Properties and carry on its business as its
business is now being conducted, except where the failure to obtain such licenses, authorizations,
consents and approvals would not be reasonably likely to have a Crosstex Material Adverse Effect.
Each of Crosstex’s Subsidiaries has been duly incorporated or formed, as the case may be, and is
validly existing and in good standing under the laws of the State or other jurisdiction of its
incorporation or organization, as the case may be, and has all requisite power and authority, and
has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use
or operate its respective Properties and carry on its business as now being conducted, except where
the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Crosstex Material Adverse Effect. None of Crosstex nor any of its Subsidiaries
are in default in the performance, observance or fulfillment of any provision of, in the case of
Crosstex, the Partnership Agreement or its Certificate of Limited Partnership or, in the case of
any Subsidiary of Crosstex, its respective certificate of incorporation, certification of
formation, bylaws, limited liability company agreement or other similar organizational documents.
Each of Crosstex and its Subsidiaries is duly qualified or licensed and in good standing as a
foreign limited partnership, limited liability company or corporation, as applicable, and is
authorized to do business in each jurisdiction in which the ownership or leasing of its respective
Properties or the character of its respective operations makes such qualification necessary, except
where the failure to obtain such qualification, license, authorization or good standing would not
be reasonably likely to have a Crosstex Material Adverse Effect.

          Section 3.02 Capitalization and Valid Issuance of Purchased Units.

          (a) As of the date of this Agreement, prior to the issuance and sale of the Partnership Units,
as contemplated hereby, the issued and outstanding limited partner interests of
Crosstex consist of 21,982,039 Common Units, 4,668,000 Subordinated Units,
12,829,650 Senior Subordinated Series Class C Units and the Incentive Distribution Rights, as
defined in the Partnership Agreement. The only issued and outstanding general partner interests of
Crosstex are the interests of the General Partner described in the Partnership Agreement. All
outstanding Common Units, Subordinated Units, Senior Subordinated Series Class C Units and
Incentive Distribution Rights and the limited partner interests represented thereby have been duly
authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to
the extent required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Section 17-607 of the Delaware Revised
Uniform Limited Partnership Act (the “Delaware LP Act”)).

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

          (c) (i) All of the issued and outstanding equity interests of each of Crosstex’s Subsidiaries
(except Crosstex DC Gathering Company, J.V.) are owned, directly or indirectly, by Crosstex free
and clear of any Liens (except for such restrictions as may exist under applicable Law and except
for such Liens as may be imposed under the Crosstex Credit Facility or the Crosstex Master Shelf
Agreement), and all such ownership interests have been duly authorized, validly issued and are
fully paid (to the extent required in the organizational documents of Crosstex’s Subsidiaries, as
applicable) and non-assessable (except as such nonassessability may be affected by matters
described in Section 17-303, 17-607 and 17-804 of the Delaware LP Act, Section 18-607 and 18-804 of
the Delaware Limited Liability Company Act (the “Delaware LLC Act”), Article 5.09 of the
Texas Limited Liability Company Act, Sections 3.03, 5.02 and 6.07 of the Texas Revised Limited
Partnership Act and Sections 12:1327 and 12:1328 of the Louisiana Limited Liability Company Act)
and free of preemptive rights and (ii) except as disclosed in the Crosstex SEC Documents, neither
Crosstex nor any of its Subsidiaries owns any shares of capital stock or other securities of, or
interest in, any other Person, or is obligated to make any capital contribution to or other
investment in any other Person.

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

          (e) The Common Units are listed on the NASDAQ and Crosstex has not received any notice of
delisting. At the Closing, the notification form and supporting documentation, if required,
related to the Common Units to be issued on conversion of the Purchased Units will have been filed
with the NASDAQ.

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          (f) The Common Units issuable upon conversion of the Senior Subordinated Series D Units and
the limited partner interests represented thereby will be duly authorized by Crosstex pursuant to
the Partnership Agreement prior to the Closing and, upon issuance in accordance with the terms of
Senior Subordinated Series D Units and the Partnership Agreement, will be validly issued, fully
paid (to the extent required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Section 17-607 of the Delaware LP Act) and
will be free of any and all Liens (other than Liens created by a Purchaser with respect to Senior
Subordinated Series D Units) and restrictions on transfer, other than restrictions on transfer
under the Partnership Agreement or this Agreement and under applicable state and federal securities
laws.

          Section 3.03 Crosstex SEC Documents. Crosstex has timely filed with the Commission all
forms, registration statements, reports, schedules and statements required to be filed by it under
the Exchange Act or the Securities Act (all such documents together with the Registration
Statement, collectively “Crosstex SEC Documents”). The Crosstex SEC Documents, including,
without limitation, any audited or unaudited financial statements and any notes thereto or
schedules included therein (the “Crosstex Financial Statements”), at the time filed (in the
case of registration statements, solely on the dates of effectiveness) (except to the extent
corrected by a subsequently filed Crosstex SEC Document filed prior to the date hereof) (a) did not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein (in light of the circumstances
under which they were made in the case of any prospectus) not misleading, (b) complied in all
material respects with the applicable requirements of the Exchange Act and the Securities Act, as
applicable, (c) complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with respect thereto,
(d) in the case of the Crosstex Financial Statements, were prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and (e) in
the case of the Crosstex Financial Statements, fairly present (subject in the case of unaudited
statements to normal, recurring and year-end audit adjustments) in all material respects the
consolidated financial position of Crosstex and its Subsidiaries as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended. KPMG LLP is an
independent, registered public accounting firm with respect to Crosstex and the General Partner and
has not resigned or
been dismissed as independent public accountants of Crosstex or the General Partner as a result of
or in connection with any disagreement with Crosstex on a matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure.

          Section 3.04 No Material Adverse Change. Except as set forth in or contemplated by the
Crosstex SEC Documents filed with the Commission on or prior to the date hereof, since the date of
Crosstex’s most recent Form 10-K filing with the Commission, Crosstex and its Subsidiaries have
conducted their respective businesses in the ordinary course, consistent with past practice, and
there has been no (a) change, event, occurrence, effect, fact, circumstance or condition that has
had or would be reasonably likely to have a Crosstex Material Adverse Effect, (b) acquisition or
disposition of any material asset by Crosstex or any of its Subsidiaries or any contract or
arrangement therefor, otherwise than for fair value in the ordinary course of

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business or as
disclosed in the Crosstex SEC Documents, or (c) material change in Crosstex’s accounting
principles, practices or methods.

          Section 3.05 Litigation. Except as set forth in the Crosstex SEC Documents, there is no
action, suit, or proceeding pending (including any investigation, litigation or inquiry) or, to
Crosstex’s knowledge, contemplated or threatened against or affecting any of the Crosstex Parties
or any of their respective officers, directors, properties or assets, which (a) questions the
validity of this Agreement or the Registration Rights Agreement or the right of Crosstex to enter
into this Agreement or the Registration Rights Agreement or to consummate the transactions
contemplated hereby and thereby or (b) (individually or in the aggregate) would be reasonably
likely to result in a Crosstex Material Adverse Effect.

          Section 3.06 No Conflicts; Compliance with Laws. The execution, delivery and performance
by Crosstex of the Basic Documents and compliance by Crosstex with the terms and provisions hereof
and thereof, and the issuance and sale by Crosstex of the Purchased Units, do not and will not (a)
assuming the accuracy of the representations and warranties of the Purchasers contained herein and
their compliance with the covenants contained herein, violate any provision of any Law or Permit
having applicability to Crosstex or any of its Subsidiaries or any of their respective Properties,
(b) conflict with or result in a violation or breach of any provision of the certificate of limited
partnership or other organizational documents of Crosstex, or the Partnership Agreement, or any
organizational documents of any of Crosstex’s Subsidiaries, (c) require any consent, approval or
notice under or result in a violation or breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination, cancellation or
acceleration) under any contract, agreement, instrument, obligation, note, bond, mortgage, license,
loan or credit agreement to which Crosstex or any of its Subsidiaries is a party or by which
Crosstex or any of its Subsidiaries or any of their respective Properties may be bound, or (d)
result in or require the creation or imposition of any Lien upon or with respect to any of the
Properties now owned or hereafter acquired by Crosstex or any of its Subsidiaries, except where any
such conflict, violation, default, breach, termination, cancellation, failure to receive consent,
approval or notice, or acceleration with respect to the foregoing provisions of this Section
3.06 would not be,
individually or in the aggregate, reasonably likely to result in a Crosstex Material Adverse
Effect.

          Section 3.07 Authority, Enforceability. Crosstex has all necessary partnership power and
authority to execute, deliver and perform its obligations under the Basic Documents, and the
execution, delivery and performance by Crosstex of the Basic Documents has been duly authorized by
all necessary action on the part of the General Partner; and the Basic Documents constitute the
legal, valid and binding obligations of Crosstex, enforceable in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and
similar laws affecting creditors’ rights generally or by general principles of equity and except as
the rights to indemnification may be limited by applicable law. No approval from the holders of the
Common Units, Senior Subordinated Series C Units and/or the Subordinated Units is required in
connection with Crosstex’s issuance and sale of the Purchased Units to the Purchasers or the
conversion of the Purchased Units.

          Section 3.08 Approvals. Except for the approvals required by the Commission in connection
with any registration statement filed under the Registration Rights Agreement and

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

          Section 3.09 MLP Status. Crosstex has, for each taxable year beginning after December 31,
2001, during which Crosstex was in existence, met the gross income requirements of Section
7704(c)(2) of the Internal Revenue Code of 1986, as amended.

          Section 3.10 Investment Company Status. Crosstex is not an “investment company” or a
company controlled by an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

          Section 3.11 Certain Fees. No fees or commissions are or will be payable by Crosstex to
brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or
the consummation of the transactions contemplated by this Agreement. Crosstex agrees that it will
indemnify and hold harmless each Purchaser from and against any and all claims, demands, or
liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by
Crosstex or alleged to have
been incurred by Crosstex in connection with the sale of the Purchased Units or the consummation of
the transactions contemplated by this Agreement.

          Section 3.12 No Side Agreements. There are no agreements by, among or between Crosstex or
any of its Affiliates, on the one hand, and any Purchaser or any of its Affiliates, on the other
hand, with respect to the transactions contemplated hereby other than the Basic Documents nor
promises or inducements for future transactions between or among any of such parties.

          Section 3.13 No Registration. Assuming the accuracy of the representations and warranties
of each Purchaser contained in Section 4.06, the issuance and sale of the Purchased Units pursuant
to this Agreement are exempt from registration requirements of the Securities Act.

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

          Section 3.15 Internal Accounting Controls. Crosstex and its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations,

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(ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and
to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Crosstex is not aware of any failures of such internal accounting
controls.

          Section 3.16 Form S-3 Eligibility. Crosstex is eligible to register the resale of its
Common Units for resale by the Purchasers under Form S-3 promulgated under the Securities Act.

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

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

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES AND COVENANTS

OF THE PURCHASERS

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

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

          Section 4.02 Authorization, Enforceability. Such Purchaser has all necessary legal power
and authority to enter into, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation by it of the transactions
contemplated hereby and thereby have been duly and validly authorized by all necessary legal
action, and no further consent or authorization of such Purchaser is required. This Agreement and
the Registration Rights Agreement have been duly executed and delivered by such Purchaser and
constitute legal, valid and binding obligations of such Purchaser; provided that, the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally

12

 

and by general principles of equity and except as the rights to indemnification may be limited by
applicable law (regardless of whether such enforceability is considered in a proceeding in equity
or at law).

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

          Section 4.04 Certain Fees. No fees or commissions are or will be payable by such Purchaser
to brokers, finders, or investment bankers with respect to the purchase of any of the Purchased
Units or the consummation of the transactions contemplated by this Agreement, except in the case of
the Fiduciary/Claymore MLP Opportunity Fund, a fee paid to A.G. Edwards & Sons, Inc. by such
Purchaser. Such Purchaser agrees, severally and not jointly with any other Purchaser, that it will
indemnify and hold harmless Crosstex from and against any and all claims, demands, or liabilities
for broker’s, finder’s, placement, or other similar fees or commissions incurred by such Purchaser
or alleged to have been incurred by such Purchaser in connection with the purchase of the Purchased
Units or the consummation of the transactions contemplated by this Agreement.

          Section 4.05 No Side Agreements. There are no other agreements by, among or between such
Purchaser and any of its Affiliates, on the one hand, and Crosstex or any of its Affiliates, on the
other hand, with respect to the transactions contemplated hereby other than the Basic Documents nor
promises or inducements for future transactions between or among any of such parties.

          Section 4.06 Unregistered Securities. Such Purchaser represents that:

          (a) Investment. The Purchased Units are being acquired for its own account or the account
of clients for whom it exercises investment discretion, not as a nominee, and with no intention of
distributing the Purchased Units or any part thereof, and that Purchaser has no present intention
of selling or granting any participation in or otherwise distributing the same in any transaction
in violation of the securities laws of the United States or any state, without prejudice, however,
to such Purchaser’s right at all times to (subject to such Purchaser’s agreement contained in
Section 4.07 hereof) sell or otherwise dispose of all or any part of the Purchased Units
under a registration statement under the Securities Act and applicable state securities laws or
under an exemption from such registration available thereunder (including, without limitation, if
available, Rule 144 promulgated thereunder). If such Purchaser should in the future decide to
dispose of any of the Purchased Units, such Purchaser understands and

13

 

agrees (a) that it may do so
only in compliance with the Securities Act and applicable state securities law, as then in effect,
which may include a sale contemplated by any registration statement pursuant to which such
securities are being offered, and (b) that stop-transfer instructions to that effect will be in
effect with respect to such securities subject to withdrawal thereof as described in Section
6.07(b).

          (b) Nature of Purchasers. Such Purchaser represents and warrants to, and covenants and agrees with, Crosstex that, (a) it
is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the
Commission pursuant to the Securities Act and (b) by reason of its business and financial
experience it has such knowledge, sophistication and experience in making similar investments and
in business and financial matters generally so as to be capable of evaluating the merits and risks
of the prospective investment in the Purchased Units, is able to bear the economic risk of such
investment and, at the present time, would be able to afford a complete loss of such investment.

          (c) Receipt of Information; Authorization. Such Purchaser acknowledges that it has (a) had
access to Crosstex’s periodic filings with the Commission, including Crosstex’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports filed on Form 8-K and (b) been
provided a reasonable opportunity to ask questions of and receive answers from Representatives of
Crosstex regarding such matters sufficient to enable such Purchaser to evaluate the risks and
merits of purchasing the Purchased Units and consummating the transactions contemplated by the
Basic Documents.

          (d) Legend. It is understood that the certificates evidencing the Purchased Units will
bear the following legend: “These securities have not been registered under the Securities Act of
1933, as amended. They may not be sold or offered for sale in the absence of a registration
statement in effect with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless sold pursuant to Rule
144 of such Act.” The securities may be pledged in connection with a bona fide margin account or
other loan secured by such securities.

          Section 4.07 Lock-Up. Such Purchaser agrees that from and after Closing it will not sell
any of the Purchased Units or the Common Units into which such Purchased Units convert prior to the
Lock-up Date.

ARTICLE V

INDEMNIFICATION, COSTS AND EXPENSES

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

14

 

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

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

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

15

 

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

ARTICLE VI

MISCELLANEOUS

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

          Section 6.02 Survival of Provisions. The representations and warranties set forth in
Sections 3.02, 3.07, 3.08, 3.10, 3.11, 4.04 and
4.06 hereunder shall survive the execution and delivery of this Agreement indefinitely, and
the other representations and warranties set forth herein shall survive for a period of twelve (12)
months following the Closing Date regardless of any investigation made by or on behalf of Crosstex
or the Purchasers. The covenants made in this Agreement or any other Basic Document shall survive
the Closing of the transactions described herein and remain operative and in full force and effect
regardless of acceptance of any of the Purchased Units and payment therefor and repayment,
conversion, exercise or repurchase thereof. All indemnification obligations of Crosstex and the
Purchasers and the provisions of Article V shall remain operative and in full force and effect
unless such obligations are expressly terminated in a writing referencing that individual Section,
regardless of any purported general termination of this Agreement.

          Section 6.03 No Waiver; Modifications in Writing.

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

16

 

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

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

          Section 6.04 Binding Effect; Assignment.

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

          (b) Assignment of Purchased Units. All or any portion of Purchased Units purchased
pursuant to this Agreement may be sold, assigned or pledged by such Purchaser, subject to
compliance with applicable securities laws, Sections 4.06 and 4.07 herein and the
Registration Rights Agreement.

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

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

17

 

with all laws or rules and regulations of the Commission,
NASDAQ or other Governmental Authority.

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

	 	(a)	 	If to Lehman Brothers MLP Opportunity Fund L.P.:

399 Park Avenue, 9th Floor

New York, New York 10022

Attention: Michael J. Cannon

Facsimile: (646) 758-4208

Internet electronic mail: mcannon2@lehman.com

If to ING Investment Management LLC, as Agent:

ING Investment Management LLC

5780 Powers Ferry Road NW, Suite 300

Atlanta, GA 30327-4349

Attention: Ryan Simmons

Facsimile: 770-690-5471

Internet Electronic Mail: ryan.simmons@inginvestment.com

If to Citigroup Global Markets Inc.:

Citigroup Global Markets Inc.

390 Greenwich Street, 3rd Floor

New York, NY 10013

Attention: Brendan O’Dea

Facsimile: (212) 723 8085

Internet Electronic Mail: brendan.odea@citigroup.com

If to Tortoise Energy Infrastructure Corporation or Tortoise Energy Capital
Corporation:

Tortoise Energy Infrastructure Corporation / Tortoise Energy Capital
Corporation

18

 

10801 Mastin Blvd, Suite 222

Overland Park, Kansas 66210

Attn: Terry Matlack

Facsimile: 913-981-1021

Internet Electronic Mail: tmatlack@tortoiseadvisors.com

If to Fiduciary/Claymore MLP Opportunity Fund:

Fiduciary Asset Management, LLC

8112 Maryland Avenue, Suite 400

Saint Louis, MP 63105-3700

Attention: James J. Cunnane, Jr.

Facsimile: 314-446-6707

Internet Electronic Mail: jcunnance@famco.com

with a copy to:

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, Texas 77002

Attention: Dan Fleckman

Facsimile: (713) 615-5859

Internet electronic mail: dfleckman@velaw.com

	 	(b)	 	If to Crosstex:

Crosstex Energy, L.P.

2501 Cedar Springs

Dallas, Texas 75201

Attention: Barry E. Davis

Facsimile: (214) 953-9500

Internet electronic mail: barry.davis@crosstexenergy.com

with a copy to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Attention: Doug Rayburn

Facsimile: (214) 661-4634

Internet electronic mail: doug.rayburn@bakerbotts.com

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

19

 

facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.

          Section 6.07 Removal of Legend.

          (a) Each Purchaser may request Crosstex to remove the legend described in Section
4.06(d) from the certificates evidencing the Purchased Units by submitting to Crosstex such
certificates, together with an opinion of counsel to the effect that such legend is no longer
required under the Securities Act or applicable state laws, as the case may be. Crosstex shall
cooperate with such Purchaser to effect the removal of such legend.

          (b) Certificates evidencing Common Units acquired by any Purchaser upon conversion of the
Purchased Units shall not contain any legend (including the legend set forth in Section 4.06(d)),
(i) while a registration statement covering the resale of such security is effective under the
Securities Act, or (ii) following any sale of such Common Units pursuant to Rule 144, or (iii) if
such Common Units are eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). Crosstex agrees that following the date
that such registration statement is declared effective by the Commission, or at such time as such
legend is no longer required under this Section 6.07(b), it will, as promptly as practicable
following the delivery by a Purchaser to Crosstex or Crosstex’s transfer agent of a certificate
representing Common Units issued with a restrictive legend, instruct Crosstex’s transfer agent to,
or deliver or cause to be delivered to such Purchaser a certificate representing such Common Units
that is free from all restrictive and other legends. While a registration statement covering the
resale of such security is effective or at any time after removal of any such restrictive legend,
Crosstex shall withdraw any and all stop-transfer instructions with respect to such security.
Notwithstanding anything in this Agreement or any other Basic Document to the contrary, Crosstex
may not make any notation on its records or give instructions to any transfer agent of Crosstex
that enlarge the restrictions on transfer set forth in this Section.

          Section 6.08 Entire Agreement. This Agreement, the other Basic Documents and the other
agreements and documents referred to herein are intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than those set forth or
referred to herein or the other Basic Documents with respect to the rights granted by Crosstex or
any of its Affiliates or the Purchasers or any of their Affiliates set forth herein or therein.
This Agreement, the other Basic Documents and the other agreements and documents referred to herein
or therein supersede all prior agreements and understandings between the parties with respect to
such subject matter.

          Section 6.09 Governing Law. This Agreement will be construed in accordance with and
governed by the laws of the State of Texas without regard to principles of conflicts of laws.

          Section 6.10 Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of

20

 

which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

21

 

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

	 	 	 	 	 	 	 
	 	 	CROSSTEX ENERGY, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CROSSTEX ENERGY GP, L.P.

(its General Partner)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CROSSTEX ENERGY GP, LLC

(its General Partner)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William W. Davis	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	William W. Davis,	 	 
	 

	 	 	 	Executive Vice President and Chief Financial
Officer	 	 

[Signature Page to Purchase Agreement]

 

	 	 	 	 	 	 	 
	 	 	LEHMAN BROTHERS MLP OPPORTUNITY FUND L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Lehman Brothers MLP Opportunity Associates L.P.,

its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Lehman Brothers MLP Opportunity Associates

L.L.C., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Cannon	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Michael J. Cannon	 	 
	 

	 	 	 	Title: Managing Director	 	 

[Signature Page to Purchase Agreement]

 

	 	 	 	 	 
	 	TORTOISE ENERGY INFRASTRUCTURE
CORPORATION  
TORTOISE ENERGY CAPITAL CORPORATION
 	 
	 	By:  	     /s/ Terry Matlack
 	 
	 	 	Name:  	Terry Matlack 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

[Signature Page to Purchase Agreement]

 

 

	 	 	 	 	 
	 	FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND

 	 
	 	By:  	/s/ James J. Cunnane, Jr.
 	 
	 	 	Name:  	James J. Cunnane, Jr. 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Purchase Agreement]

 

	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS, INC.

 	 
	 	By:  	/s/ Bret Engelkemier
 	 
	 	 	   Name:  	Bret Engelkemier 	 
	 	 	   Title:  	Managing Director 	 
	 

	 	 	 	 	 

[Signature Page to Purchase Agreement]

 

	 	 	 	 	 
	 	ING LIFE INSURANCE AND ANNUITY COMPANY

ING USA ANNUITY AND LIFE INSURANCE COMPANY

RELIASTAR LIFE INSURANCE COMPANY

SECURITY LIFE OF DENVER INSURANCE COMPANY

 	 
	 	By:  	ING Investment Management LLC, as Agent
 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	    /s/ Chris Lyons
 	 
	 	 	Name:  	Chris Lyons 	 
	 	 	Title:  	Senior Vice President 	 
	 

[Signature Page to Purchase Agreement]

 

Schedule A

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocated	 
	Purchaser	 	Purchased Units	 	 	Purchase Price	 
	Lehman Brothers MLP Opportunity Fund L.P.
	 	 	968,835	 	 	$	25,000,012.11	 
	ING Life Insurance and Annuity Company
	 	 	441,789	 	 	$	11,400,011.72	 
	ING USA Annuity and Life Insurance Company
	 	 	263,523	 	 	$	6,800,000.19	 
	ReliaStar Life Insurance Company
	 	 	77,507	 	 	$	2,000,006.13	 
	Security Life of Denver Insurance Company
	 	 	186,016	 	 	$	4,799,994.07	 
	Citigroup Global Markets Inc.
	 	 	775,068	 	 	$	20,000,009.69	 
	Tortoise Energy Infrastructure Corporation
	 	 	193,767	 	 	$	5,000,002.42	 
	Tortoise Energy Capital Corporation
	 	 	581,301	 	 	$	15,000,007.27	 
	Fiduciary/Claymore MLP Opportunity Fund
	 	 	387,534	 	 	$	10,000,004.84	 
	 
	 	 	 	 	 	 
	Total
	 	 	3,875,340	 	 	$	100,000,048.43	 
	 
	 	 	 	 	 	 

Schedule A

 

Exhibit A – Form of Registration Rights Agreement

See Attached

See Exhibit 4.1 to this Current Report on Form 8-K.

Exhibit A

 

Exhibit B – Form of Opinion of Crosstex Counsel

     Capitalized terms used but not defined herein have the meanings assigned to such terms in the
Senior Subordinated Series D Unit Purchase Agreement (the “Purchase Agreement”). Crosstex
shall furnish to the Purchasers at the Closing an opinion of Baker Botts L.L.P., counsel for
Crosstex, addressed to the Purchasers and dated the Closing Date in form satisfactory to Vinson &
Elkins L.L.P., counsel for the Purchasers, and the Purchasers, stating that:

          (i) Each of Crosstex and its “significant subsidiaries” that are organized under the laws of
the States of Delaware or Texas (the “Crosstex Subsidiaries,” and, collectively with
Crosstex, the “Crosstex Entities”) has been duly formed and is validly existing and in good
standing under the laws of the jurisdiction of its formation with all necessary, partnership or
limited liability company power and authority to own, lease, use or operate its respective
properties and to carry on its business as its business is now conducted as described in Crosstex’s
Annual Report on Form 10-K for the period ended December 31, 2006 (the “Annual Report”).
Each of the Crosstex Entities is duly qualified or registered for the transaction of business and
in good standing as a foreign limited partnership or limited liability company, as applicable, in
each of the jurisdictions set forth in Exhibit A to such opinion.

          (ii) As of the date hereof, and prior to the sale and issuance of the Purchased Units as
contemplated by the Purchase Agreement, the issued and outstanding limited partner interests of
Crosstex consist of 21,982,039 Common Units, 4,668,000 Subordinated Units, 12,829,650 Senior
Subordinated Series C Units and the Incentive Distribution Rights, as defined in the Partnership
Agreement. The only issued and outstanding general partner interests of Crosstex are the interests
of the General Partners described in the Partnership Agreement. All outstanding Common
Units, Subordinated Units, Senior Subordinated Series C Units and Incentive Distribution Rights and
the limited partner interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement and are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited
Partnership Act (“Delaware LP Act”)).

          (iii) To our knowledge, except as described in the Annual Report and except for options
granted pursuant to the Crosstex Energy GP, LLC Long-Term Incentive Plan, there are no outstanding
or authorized (i) options, warrants, preemptive rights, subscriptions, calls, or other rights,
convertible or exchangeable securities, agreements, claims or commitments of any character
obligating any Crosstex Entity to issue, transfer or sell any partnership interests or other equity
interest in, any Crosstex Entity or securities convertible into or exchangeable for such
partnership interests, (ii) obligations of any Crosstex Entity to repurchase, redeem or otherwise
acquire any partnership interests or equity interests of any Crosstex Entity or any such securities
or agreements listed in clause (i) of this sentence or (iii) voting trusts or similar agreements to
which any Crosstex Entity is a party with respect to the voting of the equity interests of any
Crosstex Entity. To our knowledge, none of the offering or sale of the Purchased Units or the
registration of the Common Units underlying the Purchased Units pursuant to the Registration Rights
Agreement, all as contemplated by the Purchase Agreement, gives rise to any rights for or relating
to the registration of any Common Units or other securities of Crosstex

Exhibit B - Page 1

 

other than those rights granted to the General Partner or any of its Affiliates (as such term
is defined in the Partnership Agreement) under Section 7.12 of the Partnership Agreement.

          (iv) Crosstex owns of record, directly or indirectly, all of the issued and outstanding equity
interests of each of the Crosstex Subsidiaries, free and clear of any Liens (A) in respect of which
a financing statement under the Uniform Commercial Code naming any of the Crosstex Entities as
debtor is on file in the office of the Secretary of State of Delaware or the office of the
Secretary of State of Texas, (B) otherwise known to us, without independent investigation, other
than those created by or arising under the Delaware LP Act, the Texas Revised Limited Partnership
Act (the “Texas LP Act”) or the Delaware Limited Liability Company Act (the “Delaware
LLC Act”), or (C) except for such Liens as may be imposed under the Crosstex Credit Facility or
the Crosstex Master Shelf Agreement, and all such ownership interests have been duly authorized,
validly issued and are fully paid (to the extent required in the organizational documents of the
Crosstex Subsidiaries, as applicable) and non-assessable (except as such nonassessability may be
affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act,
Sections 18-607 and 18-804 of the Delaware LLC Act or Sections 3.03, 5.02 and 6.07 of the Texas LP
Act, as applicable).

          (v) The Purchased Units to be issued and sold to the Purchasers by Crosstex pursuant to the
Purchase Agreement and the Common Units underlying such Purchased Units, and the limited partner
interests represented thereby, have been duly authorized under the Partnership Agreement and when
issued and delivered to the Purchasers against payment therefor in accordance with the terms of the
Purchase Agreement, will be validly issued, fully paid (to the extent required by the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by matters described
in Sections 17-303, 17-607 and 17-804of the Delaware LP Act).

          (vi) None of the offering, issuance and sale by Crosstex of the Purchased Units, the
conversion of the Purchased Units into Common Units pursuant to the terms of the Partnership
Agreement, or the execution, delivery and performance of the Purchase Agreement and Registration
Rights Agreement (A) constitutes or will constitute a violation of the Partnership Agreement or
other organizational documents of any of the Crosstex Entities, (B) 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 an event), any agreement filed or incorporated by reference as an
exhibit to the Annual Report or (C) results or will result in any violation of the Delaware LP Act,
the Delaware LLC Act, or U.S. federal law, which in the case of clauses (B) or (C) would be
reasonably likely to have a Crosstex Material Adverse Effect; provided, however,
that no opinion is expressed pursuant to this paragraph (vi) with respect to federal or state
securities or anti-fraud statutes, rules or regulations.

          (vii) Each of the Purchase Agreement, Registration Rights Agreement and Partnership Agreement
has been duly authorized and validly executed and delivered on behalf of Crosstex or Crosstex
Energy GP, L.P. party thereto, and is enforceable against such entity except as the enforceability
thereof may be limited by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws from time to time in effect affecting creditors’ rights
and remedies generally and by general principles of equity (regardless of whether such principles
are considered in a proceeding in equity or at law) and (B) public policy,

Exhibit B - Page 2

 

applicable law relating to fiduciary duties and indemnification and an implied covenant of
good faith and fair dealing.

          (viii) Except for the approvals required by the Commission in connection with Crosstex’s
obligations under the Registration Rights Agreement, no authorization, consent, approval, waiver,
license, qualification or filing with any U.S. federal or Delaware court, governmental agency or
body having jurisdiction over the Crosstex Entities or any of their respective properties is
required for the issuance and sale by Crosstex of the Purchased Units, the execution, delivery and
performance of each of the Purchase Agreement and Registration Rights or the consummation of the
transactions contemplated by the Purchase Agreement and Registration Rights Agreement, except those
that have been obtained or as may be required under state securities or “Blue Sky” laws, as to
which we do not express any opinion.

          (ix) To our knowledge, there is no action, suit, proceeding or investigation pending against
the Crosstex Entities before any court or governmental agency that questions the validity of the
Purchase Agreement, Partnership Agreement or the Registration Rights Agreement, or the right of
Crosstex to enter into any of the foregoing agreements.

          (x) Crosstex is not an “investment company” within the meaning of the Investment Company Act
of 1940, as amended.

          (xi) The Common Units issuable upon conversion of the Purchased Units and the limited partner
interests represented thereby have been duly authorized by Crosstex pursuant to the Partnership
Agreement and, upon issuance in accordance with the terms of Senior Subordinated Series D Units and
the Partnership Agreement, will be validly issued, fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Section 17-303, 17-607 and 17-804of the Delaware LP Act).

          (xii) Assuming the accuracy of the representations and warranties of each Purchaser contained
in the Purchase Agreement, the issuance and sale of the Purchased Units pursuant to the Purchase
Agreement is exempt from registration requirements of the Securities Act of 1933, as amended.

Exhibit B - Page 3

 

Exhibit C – Form of

Sixth Amended and Restated Agreement of Limited Partnership

See Attached

See Exhibit 3.1 to this Current Report on Form 8-K.

Exhibit C

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