Document:

Exhibit
10.4

[FORM
OF WARRANT]

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, OR SUPERGEN, INC. (THE “COMPANY”) RECEIVES AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) STATING THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SUCH ACT.

 

	
  No. R&R __

  	
   

  	
   

  
	
  September 24, 2002

  	
   

  	
  Right to Purchase ______

  
	
  Void After
  September 24, 2006

  	
   

  	
  Shares of Common Stock

  

 

SUPERGEN,
INC.

WARRANT

THIS CERTIFIES THAT, subject to the terms of this agreement, [RODMAN
& RENSHAW, INC.], (the “Holder”) is entitled to subscribe for and
purchase from SuperGen, Inc, a Delaware corporation (the “Company”), at the Warrant
Price defined in Section 2 herein, [118,000 in aggregate] fully paid and
non-assessable shares of the Company’s Common Stock (the “Common Stock”), such price
and such number of shares being subject to adjustment upon occurrence of the
contingencies set forth in this Warrant.

This Warrant is issued in connection with Rodman & Renshaw, Inc.’s
acting as placement agent for the issuance of shares by the Company pursuant to
a Securities Purchase Agreement dated September 23, 2002 between the Company
and the purchasers named therein (the “Purchase Agreement”).

This Warrant is
subject to the following terms and conditions:

1.     Term of Warrant.

This Warrant may be
exercised in whole or in part, at any time, and from time to time, after
issuance and prior to the first to occur of the following:

(a)   5:00 p.m., Pacific Standard Time, September
24, 2006; or

(b)   The consummation of any transaction or series
of transactions (collectively, the “Transaction”), including without
limitation, the sale, transfer or disposition of all or 

 

substantially all of the Company’s assets or the
merger of the Company with or into, or consolidation with, any other
corporation, whereby the holders of the Company’s voting securities prior to
the Transaction do not hold more than 50% of the voting securities of the
surviving entity following consummation of the Transaction (a “Change of
Control”).

2.     Warrant
Price and Method of Exercise.

(a)           The exercise price of this Warrant
(the “Warrant
Price”) shall equal $3:00 per share.

(b)           Except as provided in paragraph (c)
below, upon delivery of this Warrant (with the Notice of Exercise in the form
attached hereto as Exhibit A), together with cash payment
of the Warrant Price of the shares of Common Stock thereby purchased, at the
principal office of the Company or at such other office or agency as the
Company may designate by notice in writing to the holder hereof, the holder of
this Warrant shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased.

(c)           Anytime beginning one year from the
date of this Warrant, if a registration statement registering the resale of the
shares subject to this Warrant is not then effective, this Warrant shall also
be exercisable by means of a “cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of shares of Common Stock
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the average of the high and low trading prices
per share of Common Stock on the trading day preceding the date of such
election on the Nasdaq National Market, or such other market or exchange on
which the Common Stock is listed or quoted for trading on the date in question;

(B) =  the
Warrant Price of this Warrant; and

(X) = the number of shares of Common Stock issuable
upon exercise of this Warrant in accordance with the terms of this Warrant and
the Notice of Exercise.

(d)           All shares of Common Stock which may
be issued upon the exercise of this Warrant will, upon issuance, be fully paid
and non-assessable and free from all taxes, liens and charges with respect
thereto.

3.             Adjustment
of Purchase Price and Number of Shares; Limitation on Exercise.

The number and kind of
securities purchasable upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time in accordance with the
following provisions:

(a)           Reclassification,
Consolidation or Merger.  In case of
any reclassification or change of outstanding securities of the class issuable
upon exercise of this Warrant (other than as a result of a subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a Change of Control as provided in 

 

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Section 1(b)
hereof), the Company, or such successor corporation, as the case may be, shall
execute a new Warrant, providing that the holder of this Warrant shall have the
right to exercise such new Warrant and procure upon such exercise in lieu of
each share of Common Stock theretofore issuable upon exercise of this Warrant
the kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change, consolidation or merger by a
holder of one share of Common Stock. 
Such new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 3.  The provisions of this
subsection (a) shall similarly apply to successive reclassifications,
changes, consolidations and mergers.

(b)           Subdivision
or Combination of Shares.  If at any
time on or after the date of this Warrant the Company shall subdivide its
outstanding shares of Common Stock into a greater number of shares, or shall
pay a dividend with respect to its outstanding shares of Common Stock in shares
of Common Stock, the Warrant Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares
receivable upon exercise of the Warrant shall be proportionately increased;
and, conversely, if at any time on or after the date of this Warrant the
outstanding number of shares of Common Stock shall be combined into a smaller
number of shares, the Warrant Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares
receivable upon exercise of the Warrant shall be proportionately decreased.

(c)           Adjustment
of Number of Shares.  Upon each
adjustment in the Warrant Price, the number of Shares of Common Stock
purchasable hereunder shall be adjusted, to the nearest whole share, to the
product obtained by multiplying the number of Shares purchasable immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter.

4.             Notices.

(a)           Upon
any adjustment of the Warrant Price and increase or decrease in the number of
shares of Common Stock purchasable upon the exercise of this Warrant, then, and
in each such case, the Company, within thirty (30) days thereafter, shall give
written notice thereof to the registered Holder of this Warrant (the “Notice”).  The Notice shall be mailed to the address of
such holder as shown on the books of the Company, and shall state the Warrant
Price as adjusted and the increased or decreased number of shares purchasable
upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation of each.

(b)           The
Company shall send to the Holder at least twenty (20) days’ prior written
notice of the date when any change of control of which the Company has
knowledge shall take place.

(c)           Each
such written notice shall be given by first class mail, postage prepaid,
addressed to the Holder at the address as shown on the books of the Company for
the Holder.

5.             Investment
Letter.  Upon exercise or conversion
of this Warrant in accordance with the provisions hereof, if the Common Stock
issuable upon exercise of this Warrant is not 

 

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registered
as contemplated by Section 6 below, the Holder shall either (i) execute
and deliver to the Company an investment letter in the form attached to the
Notice of Exercise on Exhibit A, or (ii) deliver to the Company an opinion
of counsel for the Holder reasonably satisfactory to the Company, stating that
such exercise or conversion is exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the “Securities
Act”).

6.             Registration
Rights.  The Company shall include
the shares of Common Stock issued or issuable upon the exercise of this Warrant
in the S-3 Registration Statement that the Company shall file pursuant to that
certain Registration Rights Agreement dated September 23, 2002.

7.             Restrictions
on Transfer.  Certificates
representing any of the Common Stock acquired pursuant to the provisions of
this Warrant shall have endorsed thereon legends substantially in the following
form, as appropriate.

Unless such shares of Common Stock are registered under the Securities
Act and qualified (if necessary) under applicable state securities laws:

(a)           “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURI­TIES ACT OF 1933.  SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.”

(b)           Any
legend required to be placed thereon by any applicable state securities laws.

8.             Compliance
with Act.  The Holder, by acceptance
hereof, agrees that this Warrant and the Common Stock to be issued upon the
exercise or conversion hereof are being acquired solely for its own account and
not as a nominee for any other party and not with a view toward the resale or
distribution thereof and that it will not offer, sell or otherwise dispose of
this Warrant or any of the Common Stock to be issued upon the exercise or
conversion hereof except in accordance herewith and under circumstances which
will not result in a violation of the Securities Act or of applicable state
securities laws.

9.             Miscellaneous.

(a)           The
terms of this Warrant shall be binding upon and shall inure to the benefit of
any successors or assigns of the Company and of the holder or holders hereof
and of the Common Stock issued or issuable upon the exercise hereof.

(b)           No
holder of this Warrant, as such, shall be entitled to vote or receive dividends
or be deemed to be a stockholder of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the holder of
this Warrant, as such, any rights of a stockholder of the Company or any right
to vote, give or withhold consent to any 

 

-4-

 

corporate
action, receive notice of meetings, receive dividends or subscription rights,
or otherwise.

(c)           Receipt
of this Warrant by the holder hereof shall constitute acceptance of and
agreement to the foregoing terms and conditions.

(d)           The
Company will not, by amendment of its Restated Certificate of Incorporation or
through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.

(e)           Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or distribution, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like date
and tenor.

(f)            This
Warrant shall be nontransferable, other than pursuant to (i) a transfer not
involving a change in beneficial ownership, (ii) a distribution without
consideration of the Warrant by the Holder to any of its partners, or retired
partners, or to the estate of any of its partners or retired partners, or if
the Holder is a limited liability company, to any of its members, former
members, or to the estate of any of its members or former members, (iii) any
transfer by any Holder to (A) any individual or entity controlled by, controlling,
or under common control with, such Holder or (B) any individual or entity with
respect to which such Holder (or any person controlled by, controlling, or
under common control with, such Holder) has the power to direct investment
decisions, and (iv) a transfer exempt from registration under the Securities
Act, upon the Company’s receipt of an opinion of counsel (which may be counsel
for the Company) satisfactory to the Company stating that such transfer is
exempt from the registration and prospectus delivery requirements of the
federal securities laws.

(g)           This
Warrant or any provision of this Warrant may be amended, waived, discharged or
terminated by a statement in writing signed by the Company and all holders/
transferee(s) representing at least fifty percent (50%) of the Common Stock
issuable upon exercise of all warrants issued to Rodman & Renshaw, Inc. and
its affiliates.

(h)           This
Warrant shall be governed by the laws of the State of Delaware.

[Signature
Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

Dated: September 24,
2002

 

	
   

  	
  SUPERGEN,
  INC.

  
	
   

  	
   

  
	
   

  	
  /s/ JOSEPH RUBINFELD

  
	
   

  	
  Dr.
  Joseph Rubinfeld

  
	
   

  	
  President
  and Chief Executive Officer

  

 

 

-6-

 

EXHIBIT A

NOTICE OF EXERCISE

TO:         SuperGen, Inc.

1.             The undersigned
hereby elects to purchase ___________ shares of the Common Stock of SUPERGEN,
INC. pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price of such shares in full, together with all
applicable transfer taxes, if any.

[1.            The undersigned
hereby elects cashless exercise to purchase _________ shares of Common Stock of
SUPERGEN, INC. pursuant to Section 2(c) of the attached Warrant.  The number of shares to be issued pursuant
to this exercise shall be determined by reference to the formula in
Section 2(c) of the Warrant.]

2.             Please issue a
certificate or certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

3.             The undersigned
represents that the aforesaid shares of Common Stock are being acquired for the
account of the undersigned for investment and not with a view to, or for resale
in connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares.  In support thereof, the undersigned has
executed the Investment Representation Statement attached hereto as
Exhibit A.

 

	
   

  	
  Signature
  of Holder

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

 

 

 

EXHIBIT A TO NOTICE OF EXERCISE

SUPERGEN, INC.

WARRANT EXERCISE

INVESTMENT REPRESENTATION STATEMENT

 

	
  PURCHASER

  	
  :

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COMPANY

  	
  :

  	
  SuperGen, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECURITY

  	
  :

  	
  Common Stock

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NUMBER OF SHARES

  	
  :

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE

  	
  :

  	
  ,

  	
   

  	
   

  	
   

  

In connection with the
purchase of the above-listed Securities, I, the Purchaser, represent to the
Company the following:

(a)           I am an accredited
investor within the meaning of Rule 501 under the Securities Act of 1933,
as amended (the “Securities Act”) and have such knowledge and experience in
financial and business matters that I am capable of evaluating the merits and
risks of the purchase of the Securities.

(b)           I am aware of the
Company’s business affairs and financial condition, and have acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Securities.  In
making my decision to acquire the Securities, I am not relying on
representations of any officer, director, stockholder or agent of the
Company.  I am purchasing these
Securities for my own account for investment purposes only and not with a view
to, or for the resale in connection with, any “distribution” thereof for
purposes of the Securities Act.

(c)           I understand that
the Securities have not been registered under the Securities Act in reliance
upon a specific exemption therefrom, and that reliance by the Company on such
an exemption is predicated in part on the representations set forth in this
letter.

(d)           I further understand
that the Securities must be held indefinitely unless subse­quently registered
under the Securities Act or unless an exemption from registration is otherwise
available.  In addition, I understand
that the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel for the Purchaser
satisfactory to the Company or unless the Company receives a no-action letter
from the Securities and Exchange Commission.

(e)           I am familiar with
the provisions of Rule 144, promulgated under the Securities Act, which,
in substance, permits limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer thereof (or from an affiliate
of such issuer), in a non-public offering subject to the satisfaction of
certain conditions, including, among other things:  (1) the resale 

 

-8-

 

occurring not less than one year after the later of
the date the securities were sold by the Com­pany or the date they were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of an affiliate, or of a non-affiliate who has held the securities less
than two years, (2) the availability of certain public information about
the Company, (3) the sale being made through a broker in an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934), and (4) the
amount of securities being sold during any three month period not exceeding the
specified limitations stated therein, if applicable.

(f)            I further
understand that at the time I wish to sell the Securities there may be no
public market upon which to make such a sale, and that, even if such a public
market exists, the Company may not be satisfying the current public information
requirements of Rule 144, and that, in such event, I would be precluded
from selling the Securities under Rule 144 even if the one-year minimum
holding period had been satisfied.

(g)           I further understand
that in the event all of the applicable requirements of Rule 144 are not
satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rule 144 is not exclusive, the Staff
of the SEC has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers
or sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.

 

	
   

  	
  Signature
  of Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

 

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Exhibit 10.4    
  

OMNIBUS AGREEMENT  

among  

CROSSTEX ENERGY HOLDINGS INC.  

CROSSTEX ENERGY GP, LLC  

CROSSTEX ENERGY GP, L.P.  

CROSSTEX ENERGY SERVICES, LTD.  

and  

CROSSTEX ENERGY, L.P.  

 
 

OMNIBUS AGREEMENT    
  

        THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the Closing Date by and among Crosstex Energy Holdings Inc., a Delaware corporation
("Crosstex Energy Holdings"), Crosstex Energy GP, LLC, a Delaware limited liability company ("Crosstex GP"), Crosstex Energy GP, L.P., a Delaware limited partnership (the "General Partner"), Crosstex
Energy Services, Ltd., a Delaware limited partnership (the "Operating Partnership"), and Crosstex Energy, L.P., a Delaware limited partnership (the "Partnership"). 

 
 

R E C I T A L S:    
  

        Crosstex Energy Holdings, Crosstex GP, the Partnership, the Operating Partnership and the General Partner desire by their execution of this Agreement to evidence
their understanding, (i) as more fully set forth in Article II of this Agreement, with respect to (a) those business opportunities that Crosstex Energy Entities (as defined
herein) will not pursue during the term of this Agreement unless each of
the Partnership and the Operating Partnership has declined to engage in such business opportunity for its own account and (b) the procedures whereby such business opportunities are to be
offered to the Partnership and the Operating Partnership and accepted or declined and (ii) as more fully set forth in Article III of this Agreement, with respect to the maximum amount to
be paid by the Partnership to the General Partner and its Affiliates for general and administrative services in the one year period following the date hereof. 

        In
consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows: 

 
 

ARTICLE I
  Definitions    
  

        1.1  Definitions. (a) Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement. 

        (b)  As
used in this Agreement, the following terms shall have the respective meanings set forth below: 

        "Affiliate" has the meaning assigned to such term in the Partnership Agreement. 

        "Agreement" means this Omnibus Agreement, as it may be amended, modified, or supplemented from time to time in accordance with
Section 4.5 hereof. 

        "Allocated General and Administrative Expenses" means expenses associated with centralized corporate functions including general and
administrative services and including, but not limited to, certain management, engineering, legal, accounting, finance, information technology, insurance, human resource, administration of employee
benefit plans and other shared corporate services; provided, however, that Allocated General and Administrative Expenses shall not include the direct
operating and maintenance expenses associated with the operation of the assets of the Partnership. 

        "Change of Control" has the meaning assigned to such term in Section 2.4. 

        "Closing Date" means the date of the closing of the Partnership's initial public offering of Common Units. 

        "Common Units" has the meaning assigned to such term in the Partnership Agreement. 

        "Conflicts Committee" has the meaning assigned to such term in the Partnership Agreement. 

        "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of Voting Securities, by contract or otherwise. 

 

        "Crosstex Energy Entities" means Crosstex Energy Holdings and any Person controlled, directly or indirectly, by Crosstex Energy Holdings
other than the Partnership Group. 

        "Crosstex Energy Holdings" has the meaning assigned to such term in the preamble to this Agreement. 

        "Crosstex GP" has the meaning assigned to such term in the preamble to this Agreement. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "General Partner" has the meaning assigned to such term in the preamble to this Agreement. 

        "Group Member" means a member of the Partnership Group. 

        "Initial Offering" has the meaning assigned to such term in the Partnership Agreement. 

        "Management" means collectively those individuals who are listed as executive officers of Crosstex GP in the final prospectus relating to
the Initial Offering. 

        "Offer" has the meaning assigned to such term in Section 2.3. 

        "Operating Partnership" has the meaning assigned to such term in the preamble to this Agreement. 

        "Partnership" has the meaning assigned to such term in the preamble to this Agreement. 

        "Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the Closing Date,
as such agreement is in effect on the Closing Date, to which reference is hereby made for all purposes of this Agreement. No amendment or modification to the Partnership Agreement subsequent to the
Closing Date shall be given effect for the purposes of this Agreement unless consented to by each of the parties to this Agreement. 

        "Partnership Group" means the Partnership, the Operating Partnership and any Subsidiary of any such entity, treated as a single
consolidated entity. 

        "Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity. 

        "Restricted Business" has the meaning assigned to such term in Section 2.1. 

        "Subsidiary" has the meaning assigned to such term in the Partnership Agreement. 

        "Voting Securities" means securities of any class of Person entitling the holders thereof to vote on a regular basis in the election of
members of the board of directors or other governing body of such Person. 

        "Yorktown Funds" means Yorktown Energy Partners IV, L.P., Yorktown Energy Partners V, L.P. and any other investment fund sponsored by or
managed by Yorktown Partners, LLC, including any fund formed subsequent to the Closing Date. 

 
 

ARTICLE II
  Business Opportunities    
  

        2.1  Restricted Businesses.    For so long as the General Partner (or any Affiliate of Crosstex Energy Holdings) is
a general partner of the Partnership, each of the Crosstex Energy Entities shall be prohibited from engaging in the business of gathering, transmitting, treating, processing and marketing of natural
gas (the "Restricted Business"). 

2

 

        2.2  Permitted Exceptions.    Notwithstanding any provision of Section 2.1 to the contrary, a Crosstex Energy
Entity may pursue an opportunity to purchase or invest in, and may ultimately purchase, own and/or operate, a Restricted Business under the following circumstances: 

        (a)  The
Restricted Business was engaged in by a Crosstex Energy Entity on the date of this Agreement; provided, however, that any future acquisitions or opportunities
related to such Restricted Business shall be subject to the procedures set forth in Section 2.3. 

        (b)  The
Crosstex Energy Entity first offers the Partnership the opportunity to pursue such opportunity and the board of directors of Crosstex GP (with the approval of the
Conflicts Committee) has elected not to cause a Group Member to pursue such opportunity or acquisition in accordance with the procedures set forth in Section 2.3. 

        (c)  The
fair market value of the assets that comprise the Restricted Business represents less than a majority of the fair market value of the business being considered for
purchase or investment, in the reasonable belief of majority of the board of directors of Crosstex Energy Holdings; provided that the Crosstex Energy Entity subsequently offers the Partnership the
opportunity to purchase the assets that comprise the Restricted Business in accordance with the procedures set forth in Section 2.3 and the board of directors of Crosstex GP, with the approval
of the Conflicts Committee, has elected not to cause a Group Member to pursue such opportunity or acquisition. 

        2.3  Procedures.    (a) In the event that a Crosstex Energy Entity becomes aware of an opportunity to
purchase a Restricted Business, then as soon as practicable, such Crosstex Energy Entity shall notify the Partnership of such opportunity and deliver to Crosstex GP all information prepared by or on
behalf of such Crosstex Energy Entity relating to such potential purchase. As soon as practicable, but in any event within 30 days after receipt of such notification and information, Crosstex
GP, on behalf of the Partnership, shall notify the Crosstex Energy Entity that either (i) Crosstex GP, on behalf of the Partnership, has elected, with the approval of the Conflicts Committee,
not to cause a Group Member to pursue the opportunity to acquire such Restricted Business, or (ii) Crosstex GP, on behalf of the Partnership, has elected to cause a Group Member to pursue the
opportunity to acquire such Restricted Business. If, at any time, Crosstex GP abandons such opportunity (as evidenced in writing by Crosstex GP following the request of the Crosstex Energy Entity),
the Crosstex Energy Entity may pursue such opportunity. Any Restricted Business which is permitted to be purchased by a Crosstex Energy Entity must be so purchased (i) within 12 months
of the time the Crosstex Energy Entity becomes able to pursue such acquisition in accordance with the provisions of this Section 2.3 and (ii) on terms not materially more favorable to
the Crosstex Energy Entity than were offered to the Partnership. If either of these conditions are not satisfied, the opportunity must be reoffered to the Partnership in accordance with this
Section 2.3(a). 

        (b)  In
the event that a Crosstex Energy Entity acquires a Restricted Business as part of a larger transaction in accordance with Section 2.2(c), then not later than
30 days after the consummation of the acquisition, such Crosstex Energy Entity shall notify Crosstex GP of such purchase and offer the Partnership the opportunity to purchase the Restricted
Business constituting a portion of such purchase and deliver to Crosstex GP all information prepared by or on behalf of or in the possession of such Crosstex Energy Entity relating to the Restricted
Business. As soon as practicable, but in any event within 60 days after receipt of such notification, Crosstex GP shall notify the Crosstex Energy Entity that either (i) Crosstex GP has
elected, with the approval of the Conflicts Committee, not to cause a Group Member to purchase such Restricted Business, in which event the Crosstex Energy Entity shall be forever free to continue to
engage in such particular Restricted Business; provided, however, that any future acquisitions or opportunities related to such particular Restricted Business shall be subject to the procedures set
forth in this Section 2.3, or (ii) Crosstex GP has elected to cause a Group 

3

 

Member to purchase such Restricted Business, in which event the following procedures shall be followed: 

        (i)    Within
30 days of receipt of the notice from Crosstex GP that Crosstex GP has elected to cause a Group Member to purchase the Restricted Business, the Crosstex
Energy Entity shall submit a good faith offer to Crosstex GP to sell the Restricted Business (the "Offer") to any Group Member on the terms and for the consideration stated in the Offer. 

        (ii)  After
receipt of such Offer by Crosstex GP, the Crosstex Energy Entity and Crosstex GP shall negotiate in good faith the terms on which the Restricted Business will be
sold to a Group Member. The Crosstex Energy Entity shall provide all information concerning the business, operations and finances of such Restricted Business as may be reasonably requested by Crosstex
GP. 

        (iii)  If
the Crosstex Energy Entity and Crosstex GP agree on such terms within 60 days after receipt by Crosstex GP of the Offer, a Group Member shall purchase the
Restricted Business on such terms as soon as commercially practicable after such agreement has been reached. 

        (iv)  If
the Crosstex Energy Entity and Crosstex GP are unable to agree on the terms of a sale during the 60-day period after receipt by Crosstex GP of the Offer,
the Crosstex Energy Entity and Crosstex GP will engage an independent investment banking firm with a national reputation to determine the fair market value of the Restricted Business. In determining
the fair market value of the Restricted Business, the investment banking firm will have access to the proposed sale and purchase values for the Offer submitted by the Crosstex Energy Entity and
Crosstex GP, respectively. Such investment banking firm will determine the value of the Restricted Business within 30 days and furnish the Crosstex Energy Entity and Crosstex GP with its
opinion of such value. The fees and expenses of the investment banking firm's appraisal will be split equally between the Crosstex Energy Entity and the Partnership Group. Upon receipt of such
opinion, Crosstex GP will have the option, but not the obligation, subject to the approval of the Conflicts Committee, to: 

        (v)  (A)
cause a Group Member to purchase the Restricted Business in accordance with the following process: 

        (1)  if
the valuation of the investment banking firm is in the range between the proposed sale/purchase values of the Crosstex Energy Entity and Crosstex GP, a Group Member
will have the right to purchase the Restricted Business at the valuation submitted by the investment banking firm; 

        (2)  if
the valuation of the investment banking firm is less than the proposed purchase value submitted by Crosstex GP, a Group Member will have the right to purchase the
Restricted Business at the valuation submitted by the investment banking firm; and 

        (3)  if
the valuation of the investment banking firm is greater than the proposed sale value submitted by the Crosstex Energy Entity, a Group Member will have the right to
purchase the Restricted Business for the amount submitted by the Crosstex Energy Entity; or 

        (B)  decline
to purchase such Restricted Business, in which event the Crosstex Energy Entity forever will be free to continue to own and operate the assets and business
comprising such particular Restricted Business; provided, however, that any future acquisitions or opportunities related to such particular Restricted Business shall be subject to the procedures set
forth in this Section 2.3. 

        2.4  Termination.    The provisions of Article II may be terminated by any of the Crosstex Energy Entities
upon or at any time after a "Change of Control" of Crosstex Energy Holdings, Crosstex GP or the General Partner by written notice to the Partnership. A Change of Control of Crosstex Energy 

4

 

Holdings, Crosstex GP or the General Partner shall be deemed to have occurred upon the occurrence of one or more of the following events: (a) any sale, lease, exchange, or other transfer (in
one transaction or a series of related transactions) of all or substantially all of the assets of Crosstex Energy Holdings, Crosstex GP or the General Partner to any other Person unless immediately
following such sale, lease, exchange, or other transfer such assets are owned, directly or indirectly, by the Crosstex Energy Entities, the Yorktown Funds or Management; (b) the consolidation
or merger of Crosstex Energy Holdings, Crosstex GP or the General Partner with or into another Person pursuant to a transaction in which the outstanding Voting Stock of Crosstex Energy Holdings,
Crosstex GP or the General Partner is changed into or exchanged for cash, securities, or other property, other than any such transaction where (i) the outstanding Voting Stock of Crosstex
Energy Holdings, Crosstex GP or the General Partner is changed into or exchanged for Voting Stock of the surviving corporation or its parent and (ii) the holders of the Voting Stock of Crosstex
Energy Holdings, Crosstex GP or the General Partner immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Stock of the surviving Person or its
parent immediately after such transaction; and (c) a "person" or "group" (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or becoming the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then outstanding Voting Stock of Crosstex Energy Holdings, Crosstex GP or the
General Partner, other than (i) in a merger or consolidation that would not constitute a Change of Control under clause (b) above and (ii) the Yorktown Funds or Management. 

        2.5  Scope of Prohibition.    Except as provided in this Article II and the Partnership Agreement, each
Crosstex Energy Entity shall be free to engage in any business activity whatsoever, including those that may be in direct competition with any Group Member. In addition, each Yorktown Fund will be
free to own or engage in any business activity whatsoever, including those that may be in direct competition with any Group Member. 

        2.6  Enforcement.    The Crosstex Energy Entities agree and acknowledge that the Partnership Group does not have an
adequate remedy at law for the breach by the Crosstex Energy Entities of their covenants and agreements set forth in this Article II, and that any breach by the Crosstex Energy Entities of
their covenants and agreements set forth in this Article II would result in irreparable injury to the Partnership Group. The Crosstex Energy Entities further agree and acknowledge that any
Group Member may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the Crosstex Energy Entities from such breach, and consent
to the issuance of injunctive relief under this Agreement. 

 
 

ARTICLE III
  Services    
  

        3.1  General and Administrative Reimbursement.    The amount for which the General Partner or its Affiliates shall
be entitled to reimbursement from the Partnership pursuant to Sections 7.4(b) and 7.6(c) of the
Partnership Agreement for Allocated General and Administrative Expenses shall not exceed $6.0 million in the aggregate in the 12 months following the date of this Agreement;  provided further,
that such reimbursement cap will not apply to the cost of any third party legal, accounting or advisory services received, or the
direct expenses of the General Partner and its Affiliates incurred, in connection with acquisition or business development opportunities evaluated on behalf of the Partnership. 

 
 

ARTICLE IV
  Miscellaneous    
  

        4.1  Choice of Law; Submission to Jurisdiction.    This Agreement shall be subject to and governed by the laws of
the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each
party hereby 

5

 

submits to the jurisdiction of the state and federal courts in the State of Delaware and to venue in Wilmington, Delaware. 

        4.2  Notice.    All notices or requests or consents provided for or permitted to be given pursuant to this Agreement
must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by
delivering such notice in person or by telecopier or telegram to such party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier
shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices to be sent to a party pursuant to this Agreement shall be sent to or made at the address set forth below such party's signature to this Agreement, or at
such other address as such party may stipulate to the other parties in the manner provided in this Section 4.2. 

        4.3  Entire Agreement.    This Agreement constitutes the entire agreement of the parties relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein. 

        4.4  Effect of Waiver or Consent.    No waiver or consent, express or implied, by any party to or of any breach or
default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by
such Person of the same or any other obligations of such Person hereunder. Failure on the part of a party to complain of any act of any Person or to declare any Person in default, irrespective of how
long such failure continues, shall not constitute a waiver by such party of its rights hereunder until the applicable statute of limitations period has run. 

        4.5  Amendment or Modification.    This Agreement may be amended or modified from time to time only by the written
agreement of all the parties hereto; provided, however, that the Partnership and the Operating Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or
modification of this Agreement that, in the reasonable discretion of the General Partner, will adversely affect the holders of Common Units. Each such instrument shall be reduced to writing and shall
be designated on its face an "Amendment" or an "Addendum" to this Agreement. 

        4.6  Assignment.    No party shall have the right to assign its rights or obligations under this Agreement without
the consent of the other parties hereto. 

        4.7  Counterparts.    This Agreement may be executed in any number of counterparts with the same effect as if all
signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. 

        4.8  Severability.    If any provision of this Agreement or the application thereof to any Person or circumstance
shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. 

        4.9  Gender, Parts, Articles and Sections.    Whenever the context requires, the gender of all words used in this
Agreement shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. All references to Article numbers and Section numbers refer to Articles
and Sections of this Agreement, unless the context otherwise requires. 

        4.10 Further Assurances.    In connection with this Agreement and all transactions contemplated by this Agreement,
each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, 

6

 

carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions. 

        4.11 Withholding or Granting of Consent.    Each party may, with respect to any consent or approval that it is
entitled to grant pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled discretion, with or without cause, and subject to such conditions as it shall deem
appropriate. 

        4.12 U.S. Currency.    All sums and amounts payable to or to be payable pursuant to the provisions of this
Agreement shall be payable in coin or currency of the United States of America that, at the time of payment, is legal tender for the payment of public and private debts in the United States of
America. 

        4.13 Laws and Regulations.    Notwithstanding any provision of this Agreement to the contrary, no party to this
Agreement shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such party to be in violation of any applicable law, statute, rule or
regulation. 

        4.14 Negotiation of Rights of Crosstex Energy Holdings, Limited Partners, Assignees, and Third Parties.    The
provisions of this Agreement are enforceable solely by the parties to this Agreement, and no shareholder of Crosstex Energy Holdings and no limited partner, member, assignee or other Person of the
Partnership or the Operating Partnership shall have the right, separate and apart from Crosstex Energy Holdings, the Partnership or the Operating Partnership, to enforce any provision of this
Agreement or to compel any party to this Agreement to comply with the terms of this Agreement. 

[Remainder of This Page Intentionally Left Blank.]

7

 

        IN
WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Closing Date. 

	

 	
 	
CROSSTEX ENERGY HOLDINGS INC.
	

 	
 	

By:	

	 	 	 	Name:	 
	 	 	 	Title:	 
	

 	
 	

Address for Notice:
	

 	
 	

2501 Cedar Springs, Suite 600

Dallas, Texas 75201
	

 	
 	
CROSSTEX ENERGY GP, LLC
	

 	
 	

By:	

	 	 	 	Name:	 
	 	 	 	Title:	 
	

 	
 	

Address for Notice:
	

 	
 	

2501 Cedar Springs, Suite 600

Dallas, Texas 75201
	

 	
 	
CROSSTEX ENERGY GP, L.P.
	

 	
 	

By:	

Crosstex Energy GP, LLC, its

general partner
	

 	
 	

 	

By:	

	 	 	 	 	Name:
	 	 	 	 	Title:
	

 	
 	

Address for Notice:
	

 	
 	

2501 Cedar Springs, Suite 600

Dallas, Texas 75201

8

 

	

 	
 	
CROSSTEX ENERGY SERVICES, LTD.
	

 	
 	

By:	

Crosstex Energy Services GP, LLC, its

general partner
	

 	
 	

 	

By:	

	 	 	 	 	Name:
	 	 	 	 	Title:
	

 	
 	

Address for Notice:
	

 	
 	

2501 Cedar Springs, Suite 600

Dallas, Texas 75201
	

 	
 	
CROSSTEX ENERGY, L.P.
	

 	
 	

By:	

Crosstex Energy GP, L.P., its

General Partner
	

 	
 	

 	

By:	

Crosstex Energy GP, LLC, its

general partner
	

 	
 	

 	

 	

By:	

	 	 	 	 	 	Name:
	 	 	 	 	 	Title:
	

 	
 	

Address for Notice:
	

 	
 	

2501 Cedar Springs, Suite 600

Dallas, Texas 75201

9

QuickLinks

Exhibit 10.4

OMNIBUS AGREEMENT

R E C I T A L S

ARTICLE I Definitions

ARTICLE II Business Opportunities

ARTICLE III Services

ARTICLE IV Miscellaneous

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