Exhibit 3.1
AMENDMENT NO. 2 TO
SIXTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CROSSTEX ENERGY, L.P.
This AMENDMENT NO. 2 TO SIXTH AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CROSSTEX ENERGY,
L.P. (this “Amendment No. 2”), is hereby adopted
effective as of January 1, 2007 by Crosstex Energy GP, LLC, a
Delaware limited liability company, the general partner of Crosstex
Energy GP, L.P., a Delaware limited partnership (the “General
Partner”), as general partner of Crosstex Energy, L.P., a
Delaware limited partnership (the “Partnership”).
Capitalized terms used but not defined herein are used as defined
in the Sixth Amended and Restated Agreement of Limited Partnership
of Crosstex Energy, L.P., dated as of March 23, 2007, as
amended by Amendment No. 1 to the Sixth Amended and Restated
Agreement of Limited Partnership, dated December 20, 2007 (the
“Partnership Agreement”).
WHEREAS , the General Partner
and the Limited Partners of the Partnership entered into the
Partnership Agreement; and
WHEREAS , acting pursuant to
the power and authority granted to it under Section 13.1(d) of
the Partnership Agreement, the General Partner has determined that
the following amendment to the Partnership Agreement does not
require the approval of any Limited Partner;
NOW THEREFORE , the General
Partner does hereby amend the Partnership Agreement as
follows:
Section 1. Amendment
.
(a) Section 1.1 is hereby
amended to add or amend and restate the following
definitions:
(i) “ Additional Book
Basis ” means the portion of any remaining Carrying Value
of an Adjusted Property that is attributable to positive
adjustments made to such Carrying Value as a result of Book-Up
Events. For purposes of determining the extent that Carrying Value
constitutes Additional Book Basis:
(a) Any
negative adjustment made to the Carrying Value of an Adjusted
Property as a result of either a Book-Down Event or a Book-Up Event
shall first be deemed to offset or decrease that portion of the
Carrying Value of such Adjusted Property that is attributable to
any prior positive adjustments made thereto pursuant to a Book-Up
Event or Book-Down Event.
(b) If
Carrying Value that constitutes Additional Book Basis is reduced as
a result of a Book-Down Event and the Carrying Value of other
property is increased as a result of such Book-Down Event, an
allocable portion of any such increase in Carrying Value shall be
treated as Additional Book Basis; provided , that the amount
treated as Additional Book Basis pursuant hereto as a result of
such Book-Down Event shall not exceed the amount by which the
Aggregate Remaining Net Positive Adjustments after such Book-Down
Event exceeds the remaining Additional Book Basis attributable to
all of the Partnership’s Adjusted Property after such
Book-Down Event (determined without regard to the application of
this clause (b) to such Book-Down Event).
(ii) “ Additional Book Basis
Derivative Items ” means any Book Basis Derivative Items
that are computed with reference to Additional Book Basis. To the
extent that the Additional Book Basis attributable to all of the
Partnership’s Adjusted Property as of the beginning of any
taxable period exceeds the Aggregate Remaining Net Positive
Adjustments as of the beginning of such period (the “
Excess Additional Book Basis ”), the Additional Book
Basis Derivative Items for such period shall be reduced by the
amount that bears the same ratio to the amount of Additional Book
Basis Derivative Items determined without regard to this sentence
as the Excess Additional Book Basis bears to the Additional Book
Basis as of the beginning of such period.
(iii) “ Adjusted
Property ” means any property the Carrying Value of which
has been adjusted pursuant to Section 5.5(d)(i) or
5.5(d)(ii).
(iv) “ Aggregate Remaining
Net Positive Adjustments ” means, as of the end of any
taxable period, the sum of the Remaining Net Positive Adjustments
of all the Partners.
(v) “ Book Basis Derivative
Items ” means any item of income, deduction, gain or loss
included in the determination of Net Income or Net Loss that is
computed with reference to the Carrying Value of an Adjusted
Property (e.g., depreciation, depletion, or gain or loss with
respect to an Adjusted Property).
(vi) “ Disposed of Adjusted
Property ” has the meaning assigned to such term in
Section 6.1(d)(xi)(B).
(vii) “ Net Positive
Adjustments ” means, with respect to any Partner, the
excess, if any, of the total positive adjustments over the total
negative adjustments made to the Capital Account of such Partner
pursuant to Book-Up Events and Book-Down Events.
(viii) “ Net Termination
Gain ” means, for any taxable year, the sum, if positive,
of all items of income, gain, loss or deduction recognized by the
Partnership (a) after the Liquidation Date or (b) upon
the sale, exchange or other
2
disposition of
all or substantially all of the assets of the Partnership Group,
taken as a whole, in a single transaction or a series of related
transactions (excluding any disposition to a member of the
Partnership Group). The items included in the determination of Net
Termination Gain shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain
or loss specially allocated under Section 6.1(d).
(ix) “ Net Termination
Loss ” means, for any taxable year, the sum, if negative,
of all items of income, gain, loss or deduction recognized by the
Partnership (a) after the Liquidation Date or (b) upon the
sale, exchange or other disposition of all or substantially all of
the assets of the Partnership Group, taken as a whole, in a single
transaction or a series of related transactions (excluding any
disposition to a member of the Partnership Group). The items
included in the determination of Net Termination Loss shall be
determined in accordance with Section 5.5(b) and shall not include
any items of income, gain or loss specially allocated under
Section 6.1(d).
(x) “ Remaining Net Positive
Adjustments ” means as of the end of any taxable period,
(i) with respect to the Unitholders holding Common Units,
Subordinated Units, Senior Subordinated Series C Units or
Senior Subordinated Series D Units, the excess of (a) the
Net Positive Adjustments of the Unitholders holding Common Units,
Subordinated Units, Senior Subordinated Series C Units or
Senior Subordinated Series D Units as of the end of such period
over (b) the sum of those Partners’ Share of Additional
Book Basis Derivative Ite
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