13D Filing: Fairfax Financial Holdings and Exco Resources Inc (XCO)

 

(b)         Except as described below, the numbers of Common Stock as to which each of the Reporting Persons has sole voting power, shared voting power, sole dispositive power and shared dispositive power is set forth in boxes 7, 8, 9 and 10, respectively, on the second part of the cover page to this Schedule 13D for each of the Reporting Persons, and such information is incorporated herein by reference.

 

To the best knowledge of the Reporting Persons, the following person beneficially owns the following amount of Common Stock and has sole voting power and sole dispositive power with respect to such Common Stock:

 

David Bonham

1,000

 

(c)          Except as described herein, none of the Reporting Persons, nor, to the best knowledge of the Reporting Persons, any person listed in Annex A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, AA, BB, CC, DD, EE, FF or GG beneficially owns, or has acquired or disposed of, any Common Stock during the last 60 days.

 

(d)         No person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of Common Stock held by the Reporting Persons other than each of the Reporting Persons.

 

(e)          Not applicable.

 

Item 6.                                                         Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

 

On March 15, 2017, EXCO entered into a series of agreements as described in the Current Report on Form 8-K filed by EXCO on that date (the Form 8-K, with capitalized terms used below not defined herein having the meanings ascribed to them in the Form 8-K), in connection with certain refinancing transactions. Pursuant to these refinancing transactions, EXCO issued to certain of the Reporting Persons warrants representing the right to purchase an aggregate 188,249,067 shares of Common Stock.

 

1.5 Lien Notes Offering

 

On March 15, 2017, EXCO entered into a Purchase Agreement, dated as of March 15, 2017 (the Note Purchase Agreement) by and among EXCO, the subsidiary guarantors named therein and certain of the Reporting Persons and other purchasers named therein (the Purchasers), pursuant to which EXCO issued for cash to the Purchasers $300.0 million in aggregate principal amount of 8.0% / 11.0% 1.5 Lien Senior Secured PIK Toggle Notes due 2022 (the 1.5 Lien Notes) in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The Note Purchase Agreement contains customary representations and warranties by EXCO and the Purchasers and customary indemnification obligations of EXCO and the subsidiary guarantors named therein to the Purchasers. In connection with the issuance of the 1.5 Lien Notes, certain of the Reporting Persons were issued the right to purchase an aggregate of 162,365,599 shares of EXCOs common stock, par value $0.001 per share, at an exercise price of $0.93 per share (representing a 33.3% premium to the trailing 30-day volume weighted average price of the Common Stock ending on February 28, 2017) (the Fairfax 1.5 Lien Notes Warrants).

 

Backstop Commitment Fee Election Letter

 

On March 15, 2017, EXCO issued the Commitment Parties, including certain of the Reporting Persons, as parties who agreed to backstop the offering of the 1.5 Lien Notes, a backstop commitment fee of 3% of the aggregate principal amount of the 1.5 Lien Notes in the form of either (i) warrants representing the right to purchase an aggregate 6,471,433 shares of Common Stock at an exercise price of $0.01 per share (with the per share value of the Common Stock based on $0.70, which was the 30 day volume weighted average price of the Common Stock ending on February 28, 2017) or (ii) an aggregate of approximately $4.5 million in cash. The backstop commitment fee was paid in connection with a Backstop Commitment Fee Election Letter and Preemptive Right (each, a Backstop Fee Letter) with each of the Commitment Parties, pursuant to which the Commitment Parties each made an election to receive the backstop fee in the form of Commitment Fee Warrants or cash. Certain of the Reporting Persons received the right to purchase an aggregate of 6,471,433  shares of EXCOs common stock, par value $0.001 per share, at an exercise price of $0.93 per share (representing a 33.3% premium to the trailing 30-day volume weighted average price of the Common Stock ending on February 28, 2017) (the Fairfax Commitment Fee Warrants).

 

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