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): March 23, 2007
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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(State or Other Jurisdiction of
Incorporation or Organization)
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(Commission File
Number)
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(I.R.S. Employer Identification No.) |
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2501 CEDAR SPRINGS
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DALLAS, TEXAS
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75201 |
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(Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (214) 953-9500
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Senior Subordinated Series D Unit Purchase Agreement
On March 23, 2007, Crosstex Energy, L.P. (the “Partnership”) entered into a privately
negotiated Senior Subordinated Series D Unit Purchase Agreement (the “Purchase Agreement”) with
Lehman Brothers MLP Opportunity Fund L.P., four entities managed by ING Investment Management, LLC,
Tortoise Energy Infrastructure Corporation, Tortoise Energy Capital Corporation, Fiduciary/Claymore
MLP Opportunity Fund and Citigroup Global Markets, Inc. (collectively, the “Purchasers”) to issue
and sell an aggregate of 3,875,340 senior subordinated Series D units representing limited partner
interests of the Partnership (the “Senior Subordinated Series D Units”) for a purchase price of
$25.80 per unit. The purchase price was negotiated by the Partnership and the Purchasers in an
arms-length negotiation based on the recent average trading price of the Common Units, as defined below. The price
took into account that holders of the securities will not receive cash distributions for two years
and the securities’ lack of liquidity during that period. Net proceeds to the Partnership from the
private placement, including the general partner’s proportionate capital contribution and expenses
associated with the sale, are expected to be approximately $102 million. The Purchase Agreement
was entered into primarily to fund previously announced projects and operations. The transaction
closed on March 23, 2007.
The Senior Subordinated Series D Units issued to the Purchasers under the Purchase Agreement
will automatically convert into common units representing limited partner interests of the
Partnership (the “Common Units”) on the first date on or after March 23, 2009 that conversion is
permitted by the Partnership’s partnership agreement at a ratio of one Common Unit for each Senior
Subordinated Series D Unit, subject to adjustment depending on the achievement of financial metrics
in the fourth quarter of 2008. The Senior Subordinated Series D Units will not be entitled to
distributions of available cash from the Partnership until such date.
Each of the Purchasers has agreed not to sell any of the Senior Subordinated Series D Units
acquired under the Purchase Agreement until the expiration of 90 days from the closing of the
purchase.
Registration Rights Agreement
On March 23, 2007, the Partnership also entered into a Registration Rights Agreement with the
Purchasers relating to the registered resale of the Common Units issuable upon conversion of the
Senior Subordinated Series D Units. Pursuant to the Registration Rights Agreement, the Partnership
has agreed to file a shelf registration statement prior to March 23, 2008 for the resale of the
Common Units into which the Senior Subordinated Series D Units will convert and to use commercially
reasonable efforts to cause the shelf registration statement to be declared effective by the
Securities and Exchange Commission no later than March 23, 2009.
Amendment to Partnership Agreement
In connection with the issuance of the Senior Subordinated Series D Units, Crosstex Energy GP,
LLC, the general partner of the general partner of the Partnership, entered into the
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Sixth Amended and Restated Agreement of Limited Partnership of the Partnership, which provides
for the rights and obligations of the Senior Subordinated Series D Units.
The descriptions of the Purchase Agreement, Registration Rights Agreement and the Sixth
Amended and Restated Agreement of Limited Partnership above do not purport to be complete and are
qualified in their entirety by reference to the complete text of the Purchase Agreement, the
Registration Rights Agreement and the Sixth Amended and Restated Agreement of Limited Partnership,
copies of which are filed as Exhibits to this Current Report on Form 8-K and are incorporated
herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
On March 23, 2007, the Partnership entered into a privately negotiated Purchase Agreement with
the Purchasers to issue and sell 3,875,340 Senior Subordinated Series D Units. Pursuant to the
terms of the Purchase Agreement, the Senior Subordinated Series D Units were issued and sold by the
Partnership on March 23, 2007 in a private transaction exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended. For additional information about the Purchase
Agreement, see Item 1.01 of this Current Report on Form 8-K, which is incorporated in this Item
3.02 by reference.
Item 3.03 Material Modification to Rights of Security Holders.
On March 23, 2007, the Partnership entered into a Registration Rights Agreement with the
Purchasers relating to the registered resale of the Common Units issuable upon conversion of the
Senior Subordinated Series D Units purchased pursuant to the Purchase Agreement. For additional
information about the Registration Rights Agreement, see Item 1.01 of this Current Report on Form
8-K, which is incorporated in this Item 3.03 by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On March 23, 2007, in connection with the transactions described in Items 1.01 and 3.02 above,
Crosstex Energy GP, LLC, the general partner of the general partner of the Partnership, entered
into the Sixth Amended and Restated Agreement of Limited Partnership. For additional information
about the Sixth Amended and Restated Agreement of Limited Partnership, see Item 1.01 of this
Current Report on Form 8-K, which is incorporated in this Item 5.03 by reference. The Sixth
Amended and Restated Agreement of Limited Partnership is filed as an Exhibit to this Current Report
on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On March 26, 2007, the Partnership issued a press release announcing that it had entered into
and closed the Purchase Agreement with the Purchasers. 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 are deemed to be
furnished and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of
1934, as amended.
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