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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
EXCO Resources, Inc.
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(Name of Issuer)
Common Stock, par value $.02 per share
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(Title of Class of Securities)
269279 20 4
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(CUSIP Number)
William L. Boeing
Haynes and Boone, L.L.P.
901 Main Street, Suite 3100
Dallas, Texas 75202
(214) 651-5553
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 15, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. 269279-20-4 PAGE 2 OF 5 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Douglas H. Miller
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
SC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
5 [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
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SOLE VOTING POWER
7
NUMBER OF
481,171/(1)(2)/
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 0
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
481,171/(1)(2)/
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
481,171/(1)(2)/
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
7.2
_____% (voting, dispositive)/(1)(2)/
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TYPE OF REPORTING PERSON*
14
IN
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(1) The Reporting Person has acquired 75,000 shares of the Issuer's common
stock, par value $.02 per share (the "Common Stock"), for $6.00 per
share pursuant to the exercise of options granted under the Issuer's
1998 Stock Option Plan (the "Plan").
(2) The number reported does not include 16,500 shares of Common Stock
owned by The Miller's Children's Trust, a Trust created by the
Reporting Person. The Reporting Person is not the Trustee nor a
beneficiary of The Miller's Children's Trust. The percent of class was
calculated based on the total number of shares outstanding on September
15, 1998, taking into account the exercise of options granted under the
Plan.
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Item 1. Security and Issuer.
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(a) Title of Class of
Equity Securities: Common Stock
(b) Name of Issuer: EXCO Resources, Inc.
(c) Address of Issuer's
Principal Executive Offices:
5735 Pineland Drive, Suite 235
Dallas, Texas 75231
Item 2. Identity and Background.
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(a) Name: Douglas H. Miller
(b) Residence or
Business Address: 5735 Pineland Drive, Suite 235
Dallas, Texas 75231
(c) Principal Business: Present principal occupation or employment and
the name, principal business address of any
corporation in which such employment is
conducted: Chairman of the Board and Chief
Executive Officer of the Issuer at the address
above.
(d) Criminal Convictions during the past five years: None.
(e) Whether, during the past five years, he was a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
of a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to federal or
state securities laws or finding any violation with respect to such
laws: None.
(f) United States.
Item 3. Source and Amount of Funds or Other Consideration.
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The shares of Common Stock acquired by the Reporting Person
pursuant to the exercise of options granted under the Plan were
acquired with $450,000 in funds received pursuant to a promissory
note between the Issuer and the Reporting Person. The interest rate
paid under the promissory note is 6.8125% per annum subject to a
maximum usury ceiling. The Reporting Person may make interest-only
payments until the end of the term of the loan and no prepayment
penalty exists. The unpaid balance is due on September 15, 2001.
The 75,000 shares of Common Stock acquired with the funds are
pledged as collateral under a pledge agreement.
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Item 4. Purpose of the Transaction.
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The Reporting Person acquired 75,000 shares of Common Stock
pursuant to the exercise of 75,000 vested options issued to the
Reporting Person under the Plan. The Reporting Person was granted a
total of 300,000 options (the "Options") under the Plan. The
Options vest over four years with one quarter of the options
vesting annually. The exercise price of the options is $6.00 per
share.
Item 5. Interest in Securities of the Issuer.
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(a) and (b): See Items 7 through 11 on the cover page of this Amendment No.3 to
Schedule 13D.
(c) The only transaction by the Reporting Person which has occurred
since the filing of Amendment No.2 has been the acquisition of the
75,000 shares reported herein.
(d) Rights of others known by the undersigned to receive or direct the
receipt of dividends from, or the proceeds from the sale of, the
securities: None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
- ------- -------------------------------------------------------------
Respect to Securities of the Issuer.
------------------------------------
None.
Item 7. Material to be Filed as Exhibits.
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1. Promissory Note dated September 15, 1998 by and between Douglas
H. Miller, as maker, and EXCO Resources, Inc., as payee.
2. Pledge Agreement dated September 15, 1998 by and between Douglas
H. Miller, as pledgor, and EXCO Resources, Inc., as the secured
party.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 23, 1998.
/s/ DOUGLAS H. MILLER
----------------------------------------
DOUGLAS H. MILLER
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EXHIBIT 1
PROMISSORY NOTE
$450,000.00 Dallas, Texas September 15, 1998
FOR VALUE RECEIVED, the undersigned, Douglas H. Miller ("Maker")
unconditionally promises to pay to the order of EXCO Resources, Inc., a Texas
corporation ("Payee"), at 5735 Pineland, Suite 235, Dallas, Texas 75231 or at
such other address given to Maker by Payee, the principal sum of Four Hundred
Fifty Thousand and no/100 Dollars ($450,000.00), in lawful money of the United
States of America, together with interest (calculated on the basis of a 365 or
366-day year, as appropriate), on the unpaid principal balance from day-to-day
remaining, computed from the date of advance until maturity at the rate per
annum which shall from day-to-day be equal to the lesser of (a) the Maximum
Rate, or (b) 6.8125 percent. If at any time and from time to time the rate of
interest calculated pursuant to item (b) above would exceed the Maximum Rate,
thereby causing the interest payable hereon to be limited to the Maximum Rate,
then any subsequent reduction in the rate specified in item (b) above shall not
reduce the rate of interest hereon below the Maximum Rate until the total amount
of interest accrued hereon from and after the date of the first advance
hereunder equals the amount of interest which would have accrued hereon if the
rate specified in item (b) above had at all times been in effect.
The term "Maximum Rate," as used herein, shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
or from time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note. To the extent that Article
5069-1.04, Title 79, Texas Revised Civil Statutes, 1925, as amended, is relevant
to any holder of this Note for the purposes of determining the Maximum Rate, the
Payee hereby notifies Maker that the "applicable rate ceiling" shall be the
"indicated rate ceiling" referred to in Article 5069-1.04(a)(1) from time to
time in effect, as limited by Article 5069-1.04(b); provided, however, that to
the extent permitted by applicable law, Payee reserves the right to change the
"applicable rate ceiling" from time to time by further notice and disclosure to
Maker; and, provided further, that the "Maximum Rate" for purposes of this Note
shall not be limited to the applicable rate ceiling under Article 5069-1.04 if
federal laws or other state laws now or hereafter in effect and applicable to
this Note (and the interest contracted for, charged and collected hereunder)
shall permit a higher rate of interest.
The principal of and interest upon this Note shall be due and payable as
follows:
(a) Interest, computed as aforesaid, shall be due and payable annually on
each yearly anniversary date of the Note as it accrues, beginning on
September 15, 1999, and thereafter, on September 15, 2000 and at maturity;
and
(b) The entire unpaid principal balance of this Note shall be due and
payable in full on September 15, 2001, unless sooner demanded.
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All past-due principal and, to the extent permitted by applicable law,
past-due interest upon this Note shall bear interest at the Maximum Rate or, if
no Maximum Rate is established by applicable law, then at the rate 18% per
annum.
Maker and each surety, endorser, guarantor and other party ever liable for
payment of any sums of money payable on this Note, jointly and severally waive
presentment, protest, notice of protest and non-payment, or other notice of
default, notice of acceleration and intention to accelerate, and agree that
their liability under this Note shall not be affected by any renewal or
extension in the time of payment hereof, or in any indulgences, or by any
release or change in any security for the payment of this Note, and hereby
consent to any and all renewals, extensions, indulgences, releases or changes,
regardless of the number of such renewals, extensions, indulgences, releases or
changes.
Maker shall be personally liable, and Payee shall have recourse against
Maker, in an amount not greater than 40% of the principal amount due hereunder
and accrued but unpaid interest thereon. This Note is secured by, among other
things, a Pledge Agreement (hereinafter so called) dated of even date herewith
from Maker to Payee, covering certain shares of Common Stock of Payee issued in
the name of Maker, as more fully described therein (the "Property").
No waiver by Payee of any of its rights or remedies hereunder or under any
other document evidencing or securing this Note or otherwise shall be considered
a waiver of any other subsequent right or remedy of Payee; no delay or omission
in the exercise or enforcement by Payee of any rights or remedies shall ever be
construed as a waiver of any right or remedy of Payee; and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Payee.
Maker reserves the right to prepay the outstanding principal balance of
this Note, in whole or in part, at any time and from time to time, without
premium or penalty. Any such prepayment shall be made together with payment of
interest accrued on the amount of principal being prepaid through the date of
such prepayment, and shall be applied to the installments of principal due
hereunder in the inverse order of maturity.
Regardless of any provision contained in this Note or any other document
executed or delivered in connection therewith, Payee shall never be deemed to
have contracted for or be entitled to receive, collect or apply as interest on
this Note, any amount in excess of the Maximum Rate, and, in the event that
Payee ever receives, collects or applies as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of this Note, and, if the principal balance of this
Note is paid in full, any remaining excess shall forthwith be paid to Maker. In
determining whether or not the interest paid or payable under any specific
contingency exceeds the highest Maximum Rate, Maker and Payee shall, to the
maximum extent permitted under applicable law, (i) characterize any non-
principal payment (other than payments which are expressly designated as
interest payments hereunder) as an expense or fee rather than as interest, (ii)
exclude voluntary pre-payments and the effect thereof, and (iii) spread the
total amount of interest throughout the entire contemplated term of this Note so
that the interest rate is uniform throughout such term; provided, that if this
Note is paid and performed in full prior to the end of the full contemplated
term hereof, and if the interest received for the actual period of existence
thereof exceeds the Maximum Rate, if any, Payee or any holder hereof shall
refund to
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Maker the amount of such excess, or credit the amount of such excess against the
aggregate unpaid principal balance of all advances made by the Payee or any
holder hereof under this Note at the time in question.
This Note is being executed and delivered, and is intended to be performed
in the State of Texas. Except to the extent that the laws of the United States
may apply to the terms hereof, the substantive laws of the State of Texas shall
govern the validity, construction, enforcement and interpretation of this Note.
In the event of a dispute involving this Note or any other instruments executed
in connection herewith, the undersigned irrevocably agrees that venue for such
dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas.
MAKER:
/s/ DOUGLAS H. MILLER
----------------------
Douglas H. Miller
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<PAGE>
EXHIBIT 2
Pledge Agreement Date: September 15, 1998
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SECURED PARTY: PLEDGOR/DEBTOR:
EXCO Resources, Inc. Douglas H. Miller
c/o Chief Executive Officer Glenshannon Circle
5735 Pineland Dr., Suite 235 Dallas, Texas 752
Dallas, Dallas County, Texas 75219
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A. SECURITY INTEREST. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor/Debtor (hereinafter referred
to as "Pledgor") pledges, assigns and grants to EXCO Resources, Inc., a Texas
corporation ("EXCO"), a security interest and lien in the Collateral
(hereinafter defined) to secure the payment and the performance of the
Obligation (hereinafter defined).
B. COLLATERAL. The security interest is granted in the following collateral
(the "Collateral"):
1. SPECIFIC INVESTMENT PROPERTY/SECURITIES: 75,000 shares of common stock
of EXCO, together with all investment property and/or securities hereafter
delivered to and accepted by EXCO, in its sole discretion, in substitution
therefor or in addition thereto.
2. All additions, substitutes and replacements for and proceeds of the
above Collateral (including all income and benefits resulting from any of the
above, such as dividends payable or distributable in cash, property or stock;
interest, premium and principal payments; redemption proceeds and subscription
rights; and shares or other proceeds of conversions or splits of any securities
in the Collateral). Any investment property and/or securities received by
Pledgor, which shall comprise such additions, substitutes and replacements for,
or proceeds of, the Collateral, shall be held in trust for EXCO and shall be
delivered immediately to EXCO. Any cash proceeds shall be held in trust for EXCO
and upon request shall be delivered immediately to EXCO.
C. OBLIGATION. The following obligations ("Obligation") are secured by this
Agreement: (a) All debt, obligations and liabilities of Pledgor to EXCO under
that certain Promissory Note (herein so called) made by Pledgor to EXCO dated on
even date herewith, now existing or hereafter arising; (b) All costs incurred by
EXCO to obtain, preserve, perfect and enforce this agreement and maintain,
preserve, collect and enforce the Collateral; (c) Interest on the amounts below
determined in accordance with applicable agreements between EXCO and Pledgor;
(d) All expenses of the EXCO, including fees and expenses of the EXCO's counsel,
incident to the enforcement of payment of the Obligation by any action or
participation in, or in connection with a case or proceeding under the
Bankruptcy Code, or any successor statute thereto.
D. PLEDGOR'S WARRANTIES. Pledgor hereby represents and warrants to EXCO as
follows:
1. FINANCING STATEMENTS. Except as may be noted by schedule attached
hereto and incorporated herein by reference, no financing statement covering the
Collateral is or will be on file in any public office, except the financing
statements relating to this security interest, and no security interest, other
than the one herein created, has attached or been perfected in the Collateral or
any part thereof.
2. OWNERSHIP. Pledgor owns the Collateral free from any setoff, claim,
restriction, lien, security interest or encumbrance except liens for taxes not
yet due and payable and the security interest hereunder.
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<PAGE>
3. POWER AND AUTHORITY. Pledgor has full power and authority to make this
Agreement, and all necessary consents and approvals of any persons, entities,
governmental or regulatory authorities and securities exchanges have been
obtained to effectuate the validity of this Agreement.
E. PLEDGOR'S COVENANTS. Until full payment and performance of all of the
Obligation, unless EXCO otherwise consents in writing:
1. OBLIGATION AND THIS AGREEMENT. Pledgor shall perform all of its
agreements herein.
2. OWNERSHIP OF COLLATERAL. Pledgor shall defend the Collateral against
all claims and demands of all persons at any time claiming any interest therein
adverse to EXCO. Pledgor shall keep the Collateral free from all liens and
security interests except those for taxes not yet due and payable and the
security interest hereby created.
3. EXCO'S COSTS. Pledgor shall pay all costs necessary to obtain,
preserve, perfect, defend and enforce the security interest created by this
Agreement, collect the Obligation, and preserve, defend, enforce and collect the
Collateral, including but not limited to taxes, assessments, reasonable
attorney's fees, legal expenses and expenses of sales. Whether the Collateral is
or is not in EXCO's possession, and without any obligation to do so and without
waiving Pledgor's default for failure to make any such payment, EXCO at its
option may pay any such costs and expenses and discharge encumbrances on the
Collateral, and such payments shall be a part of the Obligation and bear
interest at the rate set out in the Obligation. Pledgor agrees to reimburse EXCO
on demand for any costs so incurred.
4. INFORMATION AND INSPECTION. Pledgor shall (i) promptly furnish EXCO
any information with respect to the Collateral requested by EXCO; (ii) allow
EXCO or its representatives to inspect and copy, or furnish EXCO or its
representatives with copies of, all records relating to the Collateral and the
Obligation; and (iii) promptly furnish EXCO or its representatives with any
other information EXCO may reasonably request regarding the Obligation.
5. ADDITIONAL DOCUMENTS. Pledgor shall sign and deliver any papers
furnished by EXCO which are necessary or desirable in the judgment of EXCO to
obtain, maintain and perfect the security interest hereunder and to enable EXCO
to comply with any federal or state law in order to obtain or perfect EXCO's
interest in the Collateral or to obtain proceeds of the Collateral.
6. NOTICE OF CHANGES. Pledgor shall notify EXCO immediately of (i) any
material change in the Collateral, (ii) a change in Pledgor's residence or
location, or (iii) a material change in any matter warranted or represented by
Pledgor in this Agreement.
7. POSSESSION OF COLLATERAL. Pledgor shall deliver all investment
securities and other instruments and documents which are a part of the
Collateral and in Pledgor's possession to EXCO immediately upon request, or if
hereafter acquired, immediately following acquisition, in a form suitable for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures appropriately guaranteed in form and
substance suitable to EXCO.
8. CHANGE OF NAME/STATUS. Pledgor shall not change its name, change its
corporate status, use any trade name or engage in any business not reasonably
related to its business as presently conducted, except with prior written notice
to the EXCO.
9. POWER OF ATTORNEY. Pledgor appoints EXCO and any officer thereof as
Pledgor's attorney-in-fact with full power in Pledgor's name and on Pledgor's
behalf to do every act which Pledgor is obligated to do or may be required to do
hereunder; however, nothing in this paragraph shall be construed to obligate
EXCO to take any action hereunder nor shall EXCO be liable to Pledgor for
failure to take any action hereunder. This appointment shall be deemed a power
coupled with an interest and shall not be terminable as long as the Obligation
is outstanding and shall not terminate on the disability or incompetence of
Pledgor. Without limiting the generality of the foregoing, EXCO shall have the
right and power to receive, indorse and collect all checks and other orders for
the payment of money made payable to Pledgor representing any dividend, interest
payment or other distribution payable in respect of the Collateral or any part
thereof.
10. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extensions of or any
other indulgence with respect to the Obligation or any part thereof, no
modification of the document(s) evidencing the Obligation, no release of any
security, no release of any person (including any maker, indorser, guarantor or
surety) liable on the Obligation, no delay in enforcement of payment, and no
delay or omission or lack of diligence or care in exercising any right or power
with respect to the Obligation or any security therefor or guaranty thereof or
under this Agreement shall in any manner impair or affect the rights of EXCO
under any law,
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<PAGE>
hereunder, or under any other agreement pertaining to the Collateral. EXCO need
not file suit or assert a claim for any part of the Obligation before
foreclosing or otherwise realizing upon the Collateral.
11. WAIVERS BY PLEDGOR. Pledgor waives notice of the creation, advance,
increase, existence, extension or renewal of, and of any indulgence with respect
to, the Obligation; waives presentment, demand, notice of dishonor, and protest;
waives notice of the amount of the Obligation outstanding at any time, notice of
any change in financial condition of any person liable for the Obligation or any
part thereof, notice of any Event of Default, and all other notices respecting
the Obligation; and agrees that maturity of the Obligation and any part thereof
may be accelerated, extended or renewed one or more times by EXCO in its
discretion, without notice to Pledgor. Pledgor further waives any right of
subrogation or to enforce any right of action against any other pledgor until
the Obligation is paid in full.
F. RIGHTS AND POWERS OF EXCO.
1. GENERAL. EXCO, before or after default, without liability to Pledgor
may: take control of proceeds, including stock received as dividends or by
reason of stock splits; release the Collateral in its possession to any Pledgor,
temporarily or otherwise; require additional Collateral from the Company; reject
as unsatisfactory any property hereafter offered by Pledgor as Collateral; take
control of funds generated by the Collateral, such as cash dividends, interest
and proceeds, and use same to reduce any part of the Obligation and exercise all
other rights which an owner of such Collateral may exercise, except the right to
vote or dispose of the Collateral before an Event of Default; and at any time
transfer any of the Collateral or evidence thereof into its own name or that of
its nominee. EXCO shall not be liable for failure to collect any account or
instruments, or for any act or omission on the part of EXCO, its officers,
agents or employees, except for its or their own willful misconduct or gross
negligence. The foregoing rights and powers of EXCO will be in addition to, and
not a limitation upon, any rights and powers of EXCO given by law, elsewhere in
this Agreement, or otherwise.
2. CONVERTIBLE COLLATERAL. EXCO may present for conversion any Collateral
which is convertible into any other instrument or investment security or a
combination thereof with cash, but EXCO shall not have any duty to present for
conversion any Collateral unless it shall have received from Pledgor detailed
written instructions to that effect at a time reasonably far in advance of the
final conversion date to make such conversion possible.
G. DEFAULT.
1. EVENT OF DEFAULT. An event of default ("Event of Default") under this
Agreement shall occur if an event of default occurs under the Promissory Note
(as it may be renewed, extended, amended, or restated).
2. RIGHTS AND REMEDIES. If any event of default shall occur, then, in
each and every such case, EXCO may, without (a) presentment, demand, or protest,
(b) notice of default, dishonor, demand, non-payment, or protest, (c) notice of
intent to accelerate all or any part of the Obligation, (d) notice of
acceleration of all or any part of the Obligation, or (e) notice of any other
kind, all of which Pledgor hereby expressly waives (except for any notice
required under this Agreement, any other loan document concerning the Obligation
or which may not be waived under applicable law), at any time thereafter
exercise and/or enforce any of the following rights and remedies, at EXCO's
option:
i. ACCELERATION. The Obligation shall, at EXCO's option, become
immediately due and payable, and the obligation, if any, of EXCO to permit
further borrowings under the Obligation shall at EXCO's option immediately cease
and terminate.
ii. LIQUIDATION OF COLLATERAL. Upon 20 days written to notice to
Pledgor (and if such event of default has not been cured), sell, or instruct any
Agent or Broker to sell, all or any part of the Collateral in a public or
private sale, direct any Agent or Broker to liquidate all or any part of the
Collateral and deliver all proceeds thereof to EXCO, and apply all proceeds to
the payment of any or all of the Obligation in such order and manner as EXCO
shall, in its discretion, choose.
iii. UNIFORM COMMERCIAL CODE. Upon 20 days written to notice to
Pledgor (and if such Event of Default has not been cured), all of the rights,
powers and remedies of a secured creditor under the Uniform Commercial Code
("UCC") as adopted in the jurisdiction to which EXCO is subject under this
Agreement.
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<PAGE>
iv. CANCELLATION OF SHARES. EXCO may cancel the Collateral on its
stock transfer books at a value equal to the closing price on the Nasdaq Stock
Market or other securities market on which shares of EXCO's Common Stock is then
traded on the date of cancellation.
Pledgor specifically understands and agrees that any sale by EXCO of all or part
of the Collateral pursuant to the terms of this Agreement may be effected by
EXCO at times and in manners which could result in the proceeds of such sale as
being significantly and materially less than might have been received if such
sale had occurred at different times or in different manners, and Pledgor
hereby releases EXCO and its officers and representatives from and against any
and all obligations and liabilities arising out of or related to the timing or
manner of any such sale.
If, in the opinion of EXCO, there is any question that a public sale or
distribution of any Collateral will violate any state or federal securities law,
EXCO may offer and sell such Collateral in a transaction exempt from
registration under federal securities law, and any such sale made in good faith
by EXCO shall be deemed "commercially reasonable."
H. GENERAL.
1. PARTIES BOUND. EXCO's rights hereunder shall inure to the benefit of
its successors and assigns, and in the event of any assignment or transfer of
any of the Obligation or the Collateral, EXCO thereafter shall be fully
discharged from any responsibility with respect to the Collateral so assigned or
transferred, but EXCO shall retain all rights and powers hereby given with
respect to any of the Obligation or the Collateral not so assigned or
transferred. All representations, warranties and agreements of Pledgor if more
than one are joint and several and all shall be binding upon the personal
representatives, heirs, successors and assigns of Pledgor.
2. WAIVER. No delay of EXCO in exercising any power or right shall
operate as a waiver thereof; nor shall any single or partial exercise of any
power or right preclude other or further exercise thereof or the exercise of any
other power or right. No waiver by EXCO of any right hereunder or of any default
by Pledgor shall be binding upon EXCO unless in writing, and no failure by EXCO
to exercise any power or right hereunder or waiver of any default by Pledgor
shall operate as a waiver of any other or further exercise of such right or
power or of any further default. Each right, power and remedy of EXCO as
provided for herein or in any of the loan documents related to the Obligation,
or which shall now or hereafter exist at law or in equity or by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other such right, power or remedy. The exercise or beginning of the exercise by
EXCO of any one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by EXCO of any or all other such rights,
powers or remedies.
3. AGREEMENT CONTINUING. This Agreement shall constitute a continuing
agreement.
4. DEFINITIONS. Unless the context indicates otherwise, definitions in
the UCC apply to words and phrases in this Agreement; if UCC definitions
conflict, Article 8 and/or 9 definitions apply.
5. NOTICE. Notice shall be deemed reasonable if mailed postage prepaid at
least 5 days before the related action (or if the UCC elsewhere specifies a
longer period, such longer period) to the address of Pledgor given above. Each
notice, request and demand shall be deemed given or made, if sent by mail, upon
the earlier of the date of receipt or five (5) days after deposit in the U.S.
Mail, first class postage prepaid, or if sent by any other means, upon delivery.
6. MODIFICATIONS. No provision hereof shall be modified or limited except
by a written agreement expressly referring hereto and to the provisions so
modified or limited and signed by Pledgor and EXCO. The provisions of this
Agreement shall not be modified or limited by course of conduct or usage of
trade.
7. PARTIAL INVALIDITY. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision herein, and the invalidity or unenforceability of any
provision of any loan document related to the Obligation to any person or
circumstance shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.
8. APPLICABLE LAW AND VENUE. This Agreement has been delivered in the
State of Texas and shall be construed in accordance with the laws of that State.
It is performable by Pledgor in Dallas, Dallas County, Texas and Pledgor
expressly waives any objection as to venue in any such location. Wherever
possible each provision of this Agreement shall be interpreted in such
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manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Agreement.
9. FINANCING STATEMENT. To the extent permitted by applicable law, a
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.
10. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
i. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE
COUNTY OF DALLAS, TEXAS AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
ii. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION
SHALL BE DEEMED TO (i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT,
AGREEMENT OR DOCUMENT; OR (ii) BE A WAIVER BY EXCO OF THE PROTECTION AFFORDED TO
IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii)
LIMIT THE RIGHT OF EXCO HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT
NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. EXCO MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
I. NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above
written.
SECURED PARTY: PLEDGOR/DEBTOR:
EXCO RESOURCES, INC.
By: /s/ DOUGLAS H. MILLER /s/ DOUGLAS H. MILLER
----------------------------------- --------------------------------------
Chief Executive Officer Douglas H. Miller
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