UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 2010
CROSSTEX ENERGY, L.P.
(Exact name of registrant as specified in its charter)
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| DELAWARE |
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000-50067 |
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16-1616605 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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2501 CEDAR SPRINGS
DALLAS, TEXAS
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75201 |
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(Zip Code) |
Registrant’s telephone number, including area code: (214) 953-9500
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| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.01. |
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Entry Into a Material Definitive Agreement. |
On January 6, 2010, Crosstex Energy, L.P. (the “Partnership”) entered into a
privately-negotiated Series A Convertible Preferred Unit Purchase Agreement (the “Purchase
Agreement”) with GSO Crosstex Holdings LLC (the “Purchaser”) to issue and sell an aggregate of
14,705,882 Series A Convertible Preferred Units representing limited partner interests of the
Partnership (the “Series A Preferred Units”) for a cash purchase price of $8.50 per Series A
Preferred Unit (the “Issue Price”), resulting in total gross proceeds of approximately $125
million. The Issue Price was negotiated by the Partnership and the Purchaser in an arms-length
negotiation based on the recent average trading price of the common units representing limited
partner interests of the Partnership (the “Common Units”). The transaction is expected to close
prior to the end of January 2010.
As of January 6, 2010, the volume weighted average trading price per unit for the
Partnership’s Common Units on the NASDAQ Global Select Market, calculated over the trailing
30-day period, was $7.11. Net proceeds to the Partnership, including the general partner’s
proportionate capital contribution and after deduction of the fees and expenses related to the
private placement, including a 3% commission paid to the
Purchaser, are
expected to be approximately $123.5 million. Proceeds from the private placement will be used to
pay down approximately $123.5 million of the Partnership’s outstanding debt.
The Purchase Agreement contains representations, warranties, covenants and indemnities that
are customary for private placements by public companies. Affiliates of the Purchaser have
guaranteed the obligations of the Purchaser under the Purchase Agreement.
The Series A Preferred Units are priced at $8.50 per unit and are convertible into Common
Units on a one-for-one basis, subject to certain adjustments. The Purchaser may convert the Series
A Preferred Units at any time, and the Partnership may convert the Series A Preferred Units after
three years if certain conditions are met. The Purchaser will receive a quarterly distribution,
which will be the greater of $0.2125 per Series A Preferred Unit, or the amount of the quarterly
distribution paid to holders of Common Units, subject to certain adjustments. Such quarterly
distribution per Common Unit may be paid in cash, in additional Series A Preferred Units issued in
kind or any combination thereof. The Purchaser also will receive a seat on the Board of Directors
of Crosstex Energy GP, LLC, the general partner of the general partner of the Partnership,
expanding the size of Crosstex Energy GP, LLC’s Board of Directors from seven to eight members.
The
foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the complete text of the
Purchase Agreement, a copy of which is filed as an Exhibit to this
Current Report on Form 8-K and is incorporated herein by reference.
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| Item 7.01. |
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Regulation FD Disclosure. |
On January 7, 2010, the Partnership issued a press release announcing that it has entered into
the Purchase Agreement with the Purchaser. A copy of the press release is furnished as an Exhibit
to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the
information set forth in this Item 7.01 and in the attached Exhibit 99.1 shall be deemed to be
“furnished” and not be deemed to be “filed” for purposes of the Securities and Exchange Act of
1934, as amended.
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| Item 9.01. |
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Financial Statements and Exhibits. |
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| EXHIBIT |
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| NUMBER |
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DESCRIPTION |
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10.1
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Series A Convertible Preferred Unit Purchase
Agreement, dated as of January 6, 2010, by and
between Crosstex Energy, L.P. and GSO Crosstex
Holdings LLC. |
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99.1
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Press release dated January 7, 2010. |