LETTER AMENDMENT NO. 1 TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

Exhibit 10.2
EXECUTION VERSION

LETTER AMENDMENT NO. 1

to

AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT

As of March 30, 2007

Ladies and Gentlemen:

     We refer to the Amended and Restated Note Purchase Agreement, dated as of March 31, 2005, as amended as of June 22, 2005, November 1, 2005, March 13, 2006 and June 29, 2006, and as Amended and Restated as of July 25, 2006 (as so amended and restated, the “Agreement” ), among Crosstex Energy, L.P., a Delaware limited partnership (the “Company” ), on one hand, and each of you (the “Purchasers” ), on the other hand. Unless otherwise defined in this Letter Amendment No. 1 to Amended and Restated Note Purchase Agreement (this “ Amendment ”), the terms defined in the Agreement shall be used herein as therein defined.

     The Company desires to make certain amendments to the Agreement as hereinafter provided. Subject to the terms and conditions specified herein, the Purchasers signing this Amendment have indicated their willingness to make such amendments as more particularly set forth herein.

     Accordingly, subject to satisfaction of the conditions set forth in paragraph 5 hereof, and in reliance on the representations and warranties of the Company set forth in paragraph 4 hereof, the Purchasers signing this Amendment hereby agree with the Company to amend the Agreement as provided in paragraphs 1 through 3 below effective as of the Amendment No. 1 Effective Date (as defined in paragraph 5 below).

      1. Amendment to Paragraph 5R. Excess Leverage Fee. Paragraph 5R of the Agreement is amended in its entirety to read as follows:

     5R. Excess Leverage Fee and Interest Rate Increase.

     5R(1). Excess Leverage Fee. If the Leverage Ratio as of the end of any fiscal quarter set forth below is greater than the amount specified for such fiscal quarter, then for such fiscal quarter the Company agrees to pay to the holders of the Notes, in addition to the interest accruing on the Notes and in addition to any increase in such rate of interest that may result from the provisions of paragraph 5R(2), a fee (the “Excess Leverage Fee” ), payable in arrears on or

before the 45 ^th day after the end of such fiscal quarter, equal to the product of (i) the percentage set forth below for such fiscal quarter and range, multiplied by (ii) the daily average outstanding principal balance of the Notes during such fiscal quarter. The payment of the Excess Leverage Fee shall not constitute a waiver of any Default or Event of Default.

     5R(2). Interest Rate Increase. Notwithstanding the provisions of paragraph 1A, 1B, 1C, 1D, 1E or 1F of this Agreement or the terms contained in any Note, if at any time during an Acquisition Adjustment Period the Leverage Ratio is greater than 5.25 to 1.00, then, in addition to any Excess Leverage Fee that may be payable pursuant to paragraph 5R(1), the rate of interest on each Note shall be increased by adding 0.25% to the rate of interest set forth in such Note. The payment of interest at such increased rate shall not constitute a waiver of any Default or Event of Default and the increased rate of interest on each Note resulting from any such increase shall be considered to be the coupon rate for such Note for the purposes of determining the Default Rate.

      2. Amendment to Paragraph 6A(3). Leverage Ratios. Paragraph 6A(3) of the Agreement is amended in its entirety to read as follows:

     6A(3). Leverage Ratios.

     (a) If no Unsecured Note Indebtedness is outstanding on the applicable date of determination, the Company shall not, as of the end of any fiscal quarter, permit the Leverage Ratio for the Company and its Subsidiaries on a Consolidated basis to be greater than (i) 5.25 to 1.00 for any fiscal quarter ending during the period commencing on June 29, 2006 and ending December 31, 2007, (ii) 5.00 to 1.00 for any fiscal quarter ending March 31, 2008 through September 30, 2008, (iii) 4.75 to 1.00 for the fiscal quarters ending December 31, 2008 and March 31, 2009, and (iv) 4.50 to 1.00 for any fiscal quarter ending thereafter; provided, however, that during an Acquisition Adjustment Period, the maximum permitted Leverage Ratio shall be increased by 0.50 to 1.00 from the otherwise applicable ratio set forth above.

     (b) If any Unsecured Note Indebtedness is incurred or outstanding on the applicable date of determination, the Company shall not, as of the end of any fiscal quarter, permit the Leverage Ratio (calculated in accordance with paragraph 6C(2)(xi)) for the Company and its Subsidiaries on a Consolidated basis to be greater than 5.25 to 1.00 on the date any Unsecured Note Indebtedness is incurred and on the last day of any fiscal quarter ending thereafter; provided, however, that during an Acquisition Adjustment Period, the maximum permitted Leverage Ratio shall be increased by 0.50 to 1.00 from the otherwise applicable ratio set forth above.

     (c) If any Unsecured Note Indebtedness is incurred or outstanding on the applicable date of determination, the Company shall not, as of the end of any fiscal quarter, permit the Senior Leverage Ratio (calculated in accordance with paragraph 6C(2)(xi)) for the Company and its Subsidiaries on a Consolidated basis to be greater than 4.25 to 1.0 on the date any Unsecured Note Indebtedness is incurred and on the last day of any fiscal quarter ending thereafter; provided, however, that during an Acquisition Adjustment Period, the maximum permitted Senior Leverage Ratio shall be increased by 0.50 to 1.00 from the otherwise applicable ratio set forth above.

      3. Amendment to Paragraph 10B. Other Terms. Paragraph 10B of the Agreement is amended by adding the following definitions thereto in appropriate alphabetical order:

     “ Senior Leverage Ratio ” means, for the Company and its Subsidiaries on a Consolidated basis, as of the end of any fiscal quarter, the ratio of (a) Funded Debt (excluding the Unsecured Note Indebtedness) for the Company and its Subsidiaries on a Consolidated basis as of the end of such fiscal quarter to (b) EBITDA for the four fiscal quarters then ended.

     “ Unsecured Note Indebtedness ” means Debt permitted under paragraph 6C(2)(xi).

      4. Representations and Warranties. In order to induce the Purchasers to enter into this Amendment, the Company hereby represents and warrants as follows:

     (a) The execution, delivery and performance by the Company and the Guarantors of this Amendment, the Agreement, as amended hereby, and each of documents described in paragraph 5 hereof to which each is a party, have in each case been duly authorized by all necessary limited liability company, limited partnership or other organizational action and do not and will not (i) contravene the terms of the Company Partnership Agreement or the partnership or limited liability company agreement or certificate of formation (or other organizational documents) of the General Partner, the Company or any of their Subsidiaries, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any contractual obligation to which the General Partner, the Company or any of their Subsidiaries is a party and which could subject any holder of Notes to any liability, (iii) conflict with or result in any breach or contravention of any order, injunction, writ or decree of any

governmental authority binding on the General Partner, the Company, any of their Subsidiaries or their respective properties, (iv) violate any applicable law binding on or affecting the General Partner, the Company or any of their Subsidiaries, or (v) adversely affect the enforceability of any Lien of the Security Documents.

     (b) Each of the representations and warranties contained in paragraph 8 of the Agreement is true and correct in all material respects on and as of the date hereof, and will be true and correct in all material respects immediately upon, and as of the date of, the effectiveness of this Amendment in each case except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

     (c) On and as of the date hereof, and after giving effect to this Amendment, no Default or Event of Default exists under the Agreement.

     (d) No Governmental Action is required for the due execution, delivery or performance by the