Document:

exv10w1

 

Exhibit 10.1

Execution
Copy

SENIOR SUBORDINATED UNIT

PURCHASE
AGREEMENT

by and between

CROSSTEX ENERGY, L.P.

and

KAYNE ANDERSON MLP INVESTMENT COMPANY,

TORTOISE ENERGY CAPITAL CORPORATION

and

TORTOISE ENERGY INFRASTRUCTURE CORPORATION

 

 

Table of Contents

	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	     Section 1.01
	 	Definitions	 	 	1	 
	     Section 1.02
	 	Accounting Procedures and Interpretation	 	 	5	 
	ARTICLE II AGREEMENT TO SELL AND PURCHASE	 	 	5	 
	     Section 2.01
	 	Authorization of Sale of Senior Subordinated Units	 	 	5	 
	     Section 2.02
	 	Sale and Purchase	 	 	5	 
	     Section 2.03
	 	Closing	 	 	5	 
	     Section 2.04
	 	Conditions to the Closing	 	 	5	 
	     Section 2.05
	 	Crosstex Deliveries	 	 	6	 
	     Section 2.06
	 	Purchasers’ Deliveries	 	 	7	 
	     Section 2.07
	 	Price Per Unit	 	 	7	 
	     Section 2.08
	 	Lock-Up	 	 	7	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES RELATED TO CROSSTEX	 	 	7	 
	     Section 3.01
	 	Corporate Existence	 	 	7	 
	     Section 3.02
	 	Capitalization and Valid Issuance of Purchased Units	 	 	8	 
	     Section 3.03
	 	Crosstex SEC Documents	 	 	9	 
	     Section 3.04
	 	No Material Adverse Change	 	 	10	 
	     Section 3.05
	 	Litigation	 	 	10	 
	     Section 3.06
	 	No Conflicts	 	 	11	 
	     Section 3.07
	 	Authority	 	 	11	 
	     Section 3.08
	 	Approvals	 	 	11	 
	     Section 3.09
	 	MLP Status	 	 	12	 
	     Section 3.10
	 	Investment Company Status	 	 	12	 
	     Section 3.11
	 	Certain Fees	 	 	12	 
	     Section 3.12
	 	No Side Agreements	 	 	12	 
	     Section 3.13
	 	Material Agreements	 	 	12	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS	 	 	12	 
	     Section 4.01
	 	Existence	 	 	12	 
	     Section 4.02
	 	Authorization, Enforceability	 	 	13	 
	     Section 4.03
	 	No Breach	 	 	13	 
	     Section 4.04
	 	Certain Fees	 	 	13	 
	     Section 4.05
	 	No Side Agreements	 	 	13	 
	     Section 4.06
	 	Unregistered Securities	 	 	14	 
	ARTICLE V INDEMNIFICATION, COSTS AND EXPENSES	 	 	15	 
	     Section 5.01
	 	Indemnification by Crosstex	 	 	15	 
	     Section 5.02
	 	Indemnification by the Purchasers	 	 	15	 
	     Section 5.03
	 	Indemnification Procedure	 	 	15	 
	ARTICLE VI MISCELLANEOUS	 	 	16	 
	     Section 6.01
	 	Interpretation and Survival of Provisions	 	 	16	 
	     Section 6.02
	 	Survival of Provisions	 	 	17	 
	     Section 6.03
	 	No Waiver; Modifications in Writing	 	 	17	 
	     Section 6.04
	 	Binding Effect; Assignment	 	 	17	 
	     Section 6.05
	 	Non-Disclosure	 	 	18	 
	     Section 6.06
	 	Communications	 	 	18	 

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	     Section 6.07
	 	Removal of Legend	 	 	19	 
	     Section 6.08
	 	Entire Agreement	 	 	20	 
	     Section 6.09
	 	Governing Law	 	 	20	 
	     Section 6.10
	 	Execution in Counterparts	 	 	20	 
	     Section 6.11
	 	Termination	 	 	20	 

Exhibit A — Form of Registration Rights Agreement

Exhibit B — Form of Opinion of Crosstex Counsel

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SENIOR SUBORDIANTED UNIT PURCHASE AGREEMENT

     This SENIOR SUBORDINATED UNIT PURCHASE AGREEMENT, dated as of June 24, 2005 (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 finance a portion of its expansion projects through the sale of
$50,000,000 of Senior Subordinated Units to the Purchasers and the Purchasers desire to
collectively purchase $50,000,000 of Senior Subordinated Units from Crosstex in accordance with the
provisions of this Agreement.

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

     “Anniversary Date” means 180 days from the Closing Date.

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

     “Business Day” means any day other than a Saturday, Sunday, or a legal holiday for commercial
banks in Houston, Texas.

     “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.

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     “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 Third Amended and Restated Credit Agreement dated as of
March 31, 2005, by and among Crosstex, Crosstex Energy Services, L.P. and the lenders named
therein.

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

     “Crosstex Master Shelf Agreement” means the Amended and Restated Senior Secured Notes Master
Shelf Agreement, dated as of March 31, 2005 among Crosstex Energy, L.P., Crosstex Energy Services,
L.P., Prudential Investment Management, Inc. and certain other parties, as amended by the Letter
Amendment No. 1 to the Master Shelf Agreement, dated June 22, 2005.

     “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 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.

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

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     “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 subdivisions 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 interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the common law, statute or
contract, and whether such obligation or claim is fixed or contingent, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purpose of this Agreement, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person in a transaction intended to create a financing.

     “NASDAQ” means the NASDAQ National Market.

     “Non-Disclosure Agreement” means the non-disclosure agreement between Crosstex and the Kayne
Anderson MLP Investment Company dated April 30, 2005 and the non-disclosure agreement between
Crosstex and Tortoise Energy Capital Corporation dated April 29, 2005, collectively.

     “Partnership Agreement” means the Third 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 Units, Subordinated Units
(as defined in the Partnership Agreement) and Incentive Distribution Rights (as defined in the
Partnership Agreement).

     “Permits” means, with respect to Crosstex or any of its Subsidiaries, any licenses, permits,
variances, consents, authorizations, waivers, grants, franchises, concessions,

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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.

     “Person” means any individual, corporation, company, voluntary association, partnership, joint
venture, trust, limited liability company, unincorporated organization or 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 $50,000,000.

     “Purchased Units” means the number of Senior Subordinated Units set forth on Schedule A hereto with respect to each Purchaser.

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

     “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, 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 Unit Price” shall have the meaning specified in Section 2.07.

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

     “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; or (ii) at least a majority
of the outstanding equity interest having by the terms thereof ordinary voting power to elect a
majority of the board of directors or similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity interest of any other class or classes of
such corporation or other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or controlled by such Person or one
or more of its Subsidiaries.

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     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 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, and each Purchaser 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 portion of the 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 June 24,
2005 (such date, the “Closing Date”), at the offices of Vinson & Elkins, L.L.P., First City Tower,
1001 Fannin, Houston, Texas 77002.

     Section 2.04 Conditions to the Closing.

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

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

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

               (iii) a notification form and supporting documentation, if any, related to the Common Units
issuable on conversion of the Purchased Units shall have been filed with the NASDAQ.

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

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

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

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

          (c) Crosstex’s Conditions. The obligation of Crosstex to consummate the sale of the
Purchased Units to each Purchaser shall be subject to the satisfaction on or prior to the Closing
Date of the condition (which may be waived by Crosstex in writing, in whole or in part, to the
extent permitted by applicable Law) that the representations and warranties of such Purchaser
contained in this Agreement shall be true and correct in all material respects at and as of the
Closing Date (except that representations made as of a specific date shall be required to be true
and correct as of such date only).

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

          (a) A certificate or certificates representing the Purchased Units (bearing the legend set
forth in Section 4.05(e)) 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) A certificate of the Secretary of State of the State of Delaware, dated a recent date,
that Crosstex is in good standing;

          (c) A cross-receipt executed by Crosstex and delivered to the Purchasers certifying that it
has received the Purchase Price as of the Closing Date;

          (d) 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; and

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

     Section 2.06 Purchasers’ Deliveries

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          (a) Payment to Crosstex of the Purchase Price hereto by wire transfer of immediately available
funds to an account designated by Crosstex in writing;

          (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 2.07 Price Per Unit. The amount per Senior Subordinated Unit that each Purchaser
will pay to Crosstex to purchase the Purchased Units (the “Senior Subordinated Unit Price”)
shall be equal to the quotient of $50,000,000 divided by 1,495,410 units.

     Section 2.08 Lock-Up. Each Purchaser agrees that from and after Closing it will not sell
any of the Purchased Units prior to the Anniversary Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATED TO CROSSTEX

     Crosstex represents and warrants to each Purchaser as follows:

     Section 3.01 Corporate 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.

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          (a) As of the date of this Agreement, prior to the sale and issuance of the Purchased Units as
contemplated hereby, the issued and outstanding limited partner interests of Crosstex consist of
8,798,919 Common Units, 9,334,000 Subordinated 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 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”)).

          (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. None of the
offering or sale of the Senior Subordinated Units or the registration of the Common Units
underlying the Senior Subordinated Units pursuant to the Registration Rights Agreement, all as
contemplated by this Agreement, gives rise to any rights for or relating to the registration of any
Common Units or other securities of the Partnership 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.

          (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 17-607 of the Delaware LP Act, Section 18-607 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
Sections12:1327 and 12:1328 of the Louisiana Limited Liability Company Act) and free of preemptive
rights, with no personal liability attaching to the

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ownership thereof, 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 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. At the Closing the notification form and
supporting documentation, if any, related to the Common Units to be issued on conversion of the
Purchased Units will have been filed with the NASDAQ.

     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 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 and

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

     Section 3.05 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 (individually or in the
aggregate) (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) would be reasonably likely to
result in a Crosstex Material Adverse Effect.

     Section 3.06 No Conflicts. 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 or
approval, 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. 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

10

 

rights to indemnification may
be limited by applicable law. No approval from the holders of the Common and/or the Subordinated
Units is required in connection with Crosstex’s issuance and sale of the Purchased Units to the
Purchasers.

     Section 3.08 Approvals. Except for the approvals required by the Commission in connection
with any registration statement filed under the Registration Rights Agreement, 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” 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 transaction 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 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 the Purchasers or any of their 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 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.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

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

11

 

     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
and by general principles of equity and except as the rights to indemnification may be limited
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 or
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 and could not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the
financial condition or prospects of such Purchaser.

     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 transaction contemplated by this Agreement. Such Purchaser agrees
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 the
Purchasers and any of their 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.

12

 

     Section 4.06 Unregistered Securities. Such Purchaser represents that:

          (a) Investment. The Purchased Units are being acquired for its own account, not as a
nominee or agent, 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 2.08 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 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.

          (b) Nature of Purchasers. Each 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 Securities and Exchange 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. Each 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, (b) had access to
information regarding the proposed Construction Project and its potential effect on Crosstex’s
operations and financial results and (c) 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, offered for sale, pledged or hypothecated 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.”

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

13

 

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 Crosstex contained herein,
provided such claim for indemnification relating to a breach of a representation or warranty is
made prior to the expiration of such representation or warranty.

     Section 5.02 Indemnification by the Purchasers. Each Purchaser agrees 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 the representations and warranties is made prior to the expiration of such
representations and warranties.

     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

14

 

defense or settlement of such asserted liability;
provided, however, that the Indemnified Party shall be entitled (i) at its expense,
to participate in the defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense and employ counsel
or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying
Party and counsel to the Indemnified Party shall have concluded that there may be reasonable
defenses available to the Indemnified Party that are 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,
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, 3.11, 3.12, 4.04, 4.05 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.

15

 

     Section 6.03 No Waiver; Modifications in Writing.

          (a) Delay. No failure or delay on the part of any party in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power, or remedy preclude any other or further exercise thereof or the exercise of 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 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, Section 2.08 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 not be transferred by such Purchaser without the written consent
of Crosstex.

     Section 6.05 Non-Disclosure. Notwithstanding anything herein to the contrary, the
Non-Disclosure Agreement shall remain in full force and effect regardless of any termination of
this Agreement.

     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:

16

 

	 	(a)	 	If to Kayne Anderson MLP Investment Company:

1800 Avenue of the Stars, 2nd Floor

Los Angeles, California 90067

Attention: David Shladovsky

Facsimile: (310) 284-6490

and

1100 Louisiana, Ste. 4550

Houston, Texas 77002

Attention: Kevin McCarthy

Facsimile: (713) 655-7359

with a copy to:

Vinson & Elkins L.L.P.

1001 Fannin St., Suite 2300

Houston, Texas 77002

Attention: Dan A. Fleckman

Facsimile: (713) 615-5859

	 	(b)	 	If to Tortoise Energy Capital Corporation or Tortoise Energy
Infrastructure Corporation:

20802 Mastin Blvd., Suite 222

Overland Park, Kansas 66210

Attention: David Schulte

Facsimile: (913) 345-2763

with a copy to:

Blackwell Sanders Peper Martin LLP

4801 Main Street, Suite 1000

Kansas City, MO 64112

Attention: Stephen F. Carman

Facsimile: (816) 983-8080

	 	(c)	 	If to Crosstex:

Crosstex Energy, L.P.

2501 Cedar Springs

Dallas, Texas 75201

Attention: Barry E. Davis

Facsimile: (214) 953-9500

17

 

with a copy to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Attention: Doug Rayburn

Facsimile: (214) 661-4634

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 mail, return receipt requested, or
regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt
when delivered to an air courier guaranteeing overnight delivery.

     Section 6.07 Removal of Legend. Each Purchaser may request Crosstex to remove the legend
described in Section 4.06(e) 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.

     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 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 6.11 Termination. In the event that any of the conditions to a party’s obligation
to close specified in Section 2.04 is not satisfied at or prior to the Closing Date, such party may
terminate this Agreement. In the event of any such termination of this Agreement, this Agreement
shall forthwith become null and void. In the event of such termination, there shall be no
liability on the part of any party hereto; provided that nothing herein shall relieve any party
from any liability or obligation with respect to any willful breach of this Agreement.

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

18

 

     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
	 
	 	 	 	 
	 	 	KAYNE ANDERSON MLP INVESTMENT COMPANY
	 
	 	 	 	 
	 

	 	By:	 	/s/ DAVID SHLADOVSKY
	 

	 	 	 	 
	 

	 	 	 	David Shladovsky
	 

	 	 	 	Secretary and Chief Compliance Officer
	 
	 	 	 	 
	 	 	TORTOISE ENERGY CAPITAL CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	/s/ ZACHARY A. HAMEL
	 

	 	 	 	 
	 

	 	 	 	Name: Zachary A. Hamel
	 

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 	 	TORTOISE ENERGY INFRASTRUCTURE CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	/s/ ZACHARY A. HAMEL
	 

	 	 	 	 
	 

	 	 	 	Name: Zachary A. Hamel
	 

	 	 	 	Title: Secretary

[Signature Page to Purchase Agreement]

 

 

Schedule A

	 	 	 	 	 
	 	 	Number of	 
	Purchaser	 	Purchased Units	 
	Kayne Anderson MLP Investment Company
	 	 	1,046,787	 
	Tortoise Energy Capital Corporation
	 	 	288,614	 
	Tortoise Energy Infrastructure Corporation
	 	 	160,009	 
	 
	 	 	 
	Total
	 	 	1,495,410	 
	 
	 	 	 

Schedule A - Page 1

 

 

Exhibit A – Form of Registration Rights Agreement

See Attached

Exhibit A - Page 1

 

 

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 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, stating that:

          (i) Each of Crosstex and its “significant subsidiaries” that are organized under the laws of
the States of Delaware or Texas (collectively, 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, 2004 (the
“Annual Report”) and Crosstex’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005
(the “10-Q”). 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 this 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 8,798,919 Common Units, 9,334,000 Subordinated 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 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 and 17-607 of the Delaware Revised Uniform Limited
Partnership Act (“Delaware LP Act”)).

          (iii) To our knowledge, except as described in the Annual Report and 10-Q, 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 other than those rights
granted to the General Partner or any of its

Exhibit B - Page 1

 

 

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 and 17-607 of the Delaware LP Act or Sections 3.03, 5.03 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 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 and 17-607 of the Delaware
LP Act).

          (vi) None of the offering, issuance and sale by Crosstex of the Purchased Units 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, applicable law relating
to fiduciary duties and indemnification and an implied covenant of good faith and fair dealing.

Exhibit B - Page 2

 

 

          (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.

Exhibit B - Page 3<PAGE>

                                                                   EXHIBIT 10.17

                          LINE OF CREDIT AUTHORIZATION

Borrower: Broadview Media, Inc.   Lender: Terry Myhre
          4455 W. 77th Street             Minnesota School of Business
          Edina, MN  55435                1401 W. 76th Street
                                          Richfield, MN  55423
                                          Phone: 612-861-2000
                                          Fax: 612-861-5548
                                          E-mail: tmyhre@msbcollege.edu

LOAN TYPE. This is a Fixed Rate Nondisclosable Revolving Line of Credit Loan to
a Corporation for $300,000.00 due on April 30, 2006. The reference rate ("Prime
Rate" or successor rate as published daily in the Wall Street Journal-Midwest
Edition, currently 4.00%) is added to a margin of 1.5%, resulting in a fixed
rate of 5.5%. This is an unsecured renewal loan. The Board of Directors at the
July 18th, 2003 meeting authorized this line of credit.

PRIMARY PURPOSE. The Primary Purpose of this loan is for: Business Purposes.

SPECIFIC PURPOSE. The specific purpose of this loan is: An Express Revolving
Line of Credit.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $300,000.00 at the request of
the borrower.

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED JULY 24, 2003.

BORROWER:                                    LENDER:

BROADVIEW MEDIA, INC.                        TERRY MYHRE

BY: /S/ MARK WHITE                       BY: /S/ TERRY MYHRE
----------------------------                 ----------------------------------
MARK WHITE/CHIEF OPERATING OFFICER           TERRY MYHRE/MN SCHOOL OF BUSINESS

BY: /S/ H. MICHAEL BLAIR
----------------------------------------
H. MICHAEL BLAIR/CHIEF FINANCIAL OFFICER

<PAGE>

                                                                   EXHIBIT 10.17

                                PROMISSORY NOTE

BORROWER: Broadview Media, Inc.     LENDER: Terry Myhre
          4455 W. 77th Street               Minnesota School of Business
          Edina, MN  55435                  1401 W. 76th Street
                                            Richfield, MN  55423
                                            Phone: 612-861-2000
                                            Fax: 612-861-5548
                                            E-mail: tmyhre@msbcollege.edu

PRINCIPAL AMOUNT: $300,000.00  INITIAL RATE: 5.5%  DATE OF NOTE: July 24, 2003

PROMISE TO PAY. Broadview Media, Inc. ("Borrower") promises to pay to Terry
Myhre ("Lender"), or order, in lawful money of the United States of America, the
principal amount of Three Hundred Thousand & 00/100 Dollars ($300,000.00) or so
much as may be outstanding, together with interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated from the date of
each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on April 30,2006. In addition, Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning September 15, 2003, with all subsequent interest
payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to accrued
unpaid interest, then to principal, and any remaining amount to any unpaid
collection costs and late charges. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.

FIXED INTEREST RATE.  The Interest rate on this Note is fixed.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

      PAYMENT DEFAULT. Borrower fails to make any payment when due under this
Note.

      OTHER DEFAULTS. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

      FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note or the
related documents is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time
thereafter.

      INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver for
any part of Borrower's property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.

<PAGE>

      CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity of reasonableness of the claim which is the basis of the
creditor or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.

      EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note. In the event of a
death, Lender, at its option, may, but shall not be required to, permit the
Guarantor's estate to assume unconditionally the obligations arising under the
guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of
Default.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's reasonable
attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,
including reasonable attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.

GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Minnesota. This Note
has been accepted by Lender in the State of Minnesota.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.

SECTION DISCLOSURE. This loan is made under Minnesota Statutes, Section 47.59.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

BROADVIEW MEDIA, INC.

BY: /S/ MARK WHITE                         BY: /S/ TERRY MYHRE
    ----------------------------------         -------------------------------
    MARK WHITE/CHIEF OPERATING OFFICER         TERRY MYHRE/MN SCHOOL OF BUSINESS

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