Document:

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                                                                    EXHIBIT 4.12

         NOMINEE HOLDER CERTIFICATION AND REQUEST FOR ADDITIONAL RIGHTS

To the Subscription Agent:

     The undersigned hereby certifies that it is a broker-dealer registered with
the Securities and Exchange Commission, a commercial bank or trust company, a
securities depository or participant therein, or a nominee therefor, holding of
record _______________ shares of Common Stock, par value $.02 per share ("Common
Stock"), of EXCO Resources, Inc. ("EXCO") on behalf of _______________
beneficial owners as of the close of business on May 22, 2001 (the "Record
Date"), for the offering by EXCO of an aggregate of 7,168,634 shares of 5%
convertible preferred stock (the "Convertible Preferred Stock") of EXCO pursuant
to transferable subscription rights (the "Rights") being distributed to record
holders of shares of Common Stock, all as described in the prospectus of EXCO
dated May 23, 2001 (the "Prospectus"), a copy of which the undersigned has
received. As stated in the Prospectus, one Right is being distributed for each
share of Common Stock held of record as of 5:00 p.m., New York time, on May 22,
2001. Accordingly, the undersigned requests that, upon surrender of its Rights
Certificate evidencing _______________ Rights, a Rights Certificate evidencing
_______________ Rights be issued. The undersigned further certifies that each
such beneficial owner is a bona fide beneficial owner of shares of Common Stock,
that such beneficial ownership is reflected on the undersigned's records and
that all shares of Common Stock which, to the undersigned's knowledge, are
beneficially owned by any such beneficial owner through the undersigned have
been aggregated in calculating the foregoing. The undersigned agrees to provide
EXCO or its designee with such additional information as EXCO deems necessary to
verify the foregoing.

                                            ------------------------------------
                                            Name of Record Holder

                                            By:
                                               ---------------------------------

                                               Name:
                                                    ----------------------------

                                               Title:
                                                     ---------------------------

                                               Address:
                                                       -------------------------

                                               Telephone Number:
                                                                ----------------

                                            Date:                         , 2001
                                                 -------------------------<PAGE>   1

                                                                    EXHIBIT 4.13

                                    FORM OF

                            STATEMENT OF DESIGNATION

                                       OF

                         5% CONVERTIBLE PREFERRED STOCK

                                       OF

                              EXCO RESOURCES, INC.

                        (PURSUANT TO SECTION 2.13 OF THE
                        TEXAS BUSINESS CORPORATION ACT)

     EXCO Resources, Inc., a Texas corporation (the "Company"), hereby certifies
that the following resolution was adopted by the Board of Directors of the
Company on June   , 2001:

     RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors of the Company by the provisions of the Restated Articles
of Incorporation of the Company (the "Articles of Incorporation"), there is
hereby created, out of the 10,000,000 shares of Preferred Stock, par value $0.01
per share, of the Company authorized in Article Fourth of the Articles of
Incorporation (the "Preferred Stock"), a series of the Preferred Stock
consisting of 7,168,634 shares, which series shall have the following powers,
designations, preferences and other rights, and the following qualifications,
limitations and restrictions (in addition to the powers, designations,
preferences and other rights, and the qualifications, limitations and
restrictions, set forth in the Articles of Incorporation that are applicable to
the Preferred Stock):

     SECTION 1. Definitions.  For purposes of this Statement of Designation, the
following definitions shall apply:

          "Arrearage" shall have the meaning ascribed to it in Section 4 herein.

          "Articles of Incorporation" shall mean the Company's Restated Articles
     of Incorporation.

          "Board of Directors" shall mean the Board of Directors of the Company
     or any authorized committee of the Board of Directors.

          "Business Day" shall mean any day other than a Saturday or a Sunday, a
     day on which banking institutions in New York, New York are authorized or
     required by law or executive order to remain closed, or a day on which the
     corporate trust office of the Transfer Agent is closed for business.

          "Code" shall have the meaning ascribed to it in Section 11 herein.

          "Common Stock" shall mean the Common Stock, par value $0.02 per share,
     of the Company.

          "Company" shall mean EXCO Resources, Inc., a Texas corporation.

          "Conversion Date" shall mean the date on which any shares of
     Convertible Preferred Stock are converted into shares of Common Stock.

          "Conversion Rate" shall have the meaning ascribed to it in Section 6
     herein.

          "Convertible Preferred Stock" shall mean the Company's 5% Convertible
     Preferred Stock, par value $0.01 per share.

          "Dividend Payment Date" shall have the meaning ascribed to it in
     Section 4 herein.

          "Dividend Rate" shall have the meaning ascribed to it in Section 4
     herein.

          "Exchange Act" shall have the meaning ascribed to it in Section 18
     herein.

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          "Fair Market Value" of publicly traded shares of Common Stock as of a
     particular date shall mean the average of the last reported sale prices as
     reported on the Nasdaq National Market of the National Association of
     Securities Dealers, Inc. Automated Quotation System, or such other exchange
     or trading system on which the Common Stock is then traded, for 30
     consecutive Business Days commencing 45 days before such date. If the
     Common Stock is not listed or admitted to trading or quoted on any national
     securities exchange or quotation system, "Fair Market Value" shall be the
     average of the average of the closing bid and asked prices of the Common
     Stock for such 30 consecutive Business Days as furnished by two members of
     the National Association of Securities Dealers, Inc. selected by the
     Company for that purpose. If the Common Stock is not traded in a manner
     such that the quotations referred to above are available,"Fair Market
     Value" shall be deemed to be the fair market value per share of the Common
     Stock as determined by the Board of Directors in the good faith exercise of
     its reasonable business judgment.

          "Issue Date" shall mean the date that shares of Convertible Preferred
     Stock are first issued by the Company.

          "Junior Securities" shall mean any capital stock of the Company other
     than the Convertible Preferred Stock, any Parity Securities or any Senior
     Securities.

          "Mandatory Conversion" shall have the meaning ascribed to it in
     Section 6 herein.

          "Mandatory Conversion Date" shall have the meaning ascribed to it in
     Section 6 herein.

          "Optional Conversion" shall have the meaning ascribed to it in Section
     6 herein.

          "Parity Securities" shall mean any class or series of capital stock of
     the Company authorized after the Issue Date which is entitled to receive
     assets upon liquidation, dissolution or winding up of the affairs of the
     Company on a parity with the Convertible Preferred Stock.

          "Person" shall mean an individual, partnership, corporation, limited
     liability company, incorporated organization, trust or joint venture, or a
     governmental agency or political subdivision thereof.

          "Preferred Stock" shall mean the Preferred Stock, par value $0.01 per
     share, of the Company.

          "Registered Holders" shall have the meaning ascribed to it in Section
     4 herein.

          "Senior Securities" shall mean any class or series of capital stock of
     the Company authorized after the Issue Date ranking senior to the
     Convertible Preferred Stock in respect of the right to participate in any
     distribution upon liquidation, dissolution or winding up of the affairs of
     the Company.

          "Stated Value" shall mean $21.00 per share.

          "TBCA" shall have the meaning ascribed to it in Section 12 herein.

          "Transfer Agent" shall mean Continental Stock Transfer & Trust Company
     until any redesignation is made, if at all, pursuant to Section 17.

     SECTION 2. Designation and Amount.  The shares of such series shall be
designated as "5% Convertible Preferred Stock" and the authorized number of
shares constituting such series shall be 7,168,634.

     SECTION 3. Ranking.  For the purposes of determining whether any dividend
will be paid, and whether there will be any distribution of assets upon
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the Convertible Preferred Stock will rank:

          (a) junior to all of the Company's existing and future indebtedness
     and other obligations;

          (b) senior to the Common Stock; and

          (c) senior to any other classes of our common stock or series of
     preferred stock that the Company may establish after the issuance of the
     Convertible Preferred Stock.

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     SECTION 4. Dividends.

     (a) General.  The holders of shares of Convertible Preferred Stock shall be
entitled to receive dividends at a rate of 5% of the Stated Value per annum (the
"Dividend Rate"), which dividends shall be fully cumulative and paid quarterly
in arrears in cash, in four equal installments on March 31, June 30, September
30 and December 31 of each year (commencing September 30, 2001), or if any such
date is not a Business Day, the Business Day next following such day (each such
date, regardless of whether any dividends have been paid or declared and set
aside for payment on such date, the "Dividend Payment Date"), to holders of
record (the "Registered Holders") as they appear on the stock record books of
the Company on the fifteenth day prior to the relevant Dividend Payment Date.
Dividends shall be paid only when, as and if declared by the Board of Directors
out of funds at the time legally available for the payment of dividends.
Dividends shall begin to accumulate on outstanding shares of Convertible
Preferred Stock from the Issue Date and shall be deemed to accumulate from day
to day whether or not declared until paid. Dividends shall accumulate on the
basis of a 360-day year consisting of twelve 30-day months (four 90-day
quarters) and the actual number of days elapsed in the period for which the
dividend is payable.

     (b) Accumulation.  Dividends on the Convertible Preferred Stock shall be
cumulative, and from and after any Dividend Payment Date on which any dividend
that has accumulated or been deemed to have accumulated through such date has
not been paid in full, additional dividends shall accumulate in respect of the
amount of such unpaid dividends (the "Arrearage") at 7% of the Dividend Rate.
Such additional dividends in respect of any Arrearage shall be deemed to
accumulate from day to day whether or not declared until the Arrearage is paid,
shall be calculated as of such successive Dividend Payment Date, and shall
constitute an additional Arrearage from and after any Dividend Payment Date to
the extent not paid on such Dividend Payment Date. References in any Section
herein to dividends that have accumulated or that have been deemed to have
accumulated with respect to the Convertible Preferred Stock shall include the
amount, if any, of any Arrearage together with any dividends accumulated or
deemed to have accumulated on such Arrearage pursuant to this Section 4(b).
Additional dividends in respect of any Arrearage may be declared and paid at any
time, in whole or in part, without reference to any regular Dividend Payment
Date, to Registered Holders as they appear on the stock record books of the
Company on such record date as may be fixed by the Board of Directors (which
record date shall be no less than 10 days prior to the corresponding payment
date). Dividends in respect of any Arrearage shall be paid in cash.

     (c) Method of Payment.  Dividends paid on the shares of Convertible
Preferred Stock in an amount less than the total amount of such dividends at the
time accumulated and payable on all outstanding shares of Convertible Preferred
Stock shall be allocated pro rata on a share-by-share basis among all such
shares then outstanding. Dividends that are declared and paid in an amount less
than the full amount of dividends accumulated on the Convertible Preferred Stock
(and on any Arrearage) shall be applied first to the earliest dividend which has
not theretofore been paid. All cash payments of dividends on the shares of
Convertible Preferred Stock shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.

     (d) Restrictions on Dividends.  So long as any shares of the Convertible
Preferred Stock are outstanding, the Board of Directors shall not declare, and
the Company shall not pay or set apart for payment, any dividend or other
payments on any Junior Securities or Parity Securities or make any payment on
account of, or set apart for payment, money for a sinking or other similar fund
for, the repurchase, redemption or other retirement of, any Junior Securities or
Parity Securities or any warrants, rights or options exercisable for or
convertible into any Junior Securities or Parity Securities (other than the
repurchase, redemption or other retirement of debentures or other debt
securities that are convertible or exchangeable into any Junior Securities or
Parity Securities), or make any distribution in respect of the Junior Securities
or Parity Securities, either directly or indirectly, whether in cash,
obligations or shares of the Company or other property (other than distributions
or dividends in Junior Securities or Parity Securities to the holders of the
Junior Securities or Parity Securities, respectively, or any payment of cash to
settle fractional shares that might otherwise be issuable upon Junior Securities
or Parity Securities in
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respect of stock dividends, stock splits and the like), and shall not permit any
corporation or other entity directly or indirectly controlled by the Company to
purchase or redeem any Junior Securities or Parity Securities or any warrants,
rights, calls or options exercisable for or convertible into any Junior
Securities or Parity Securities (other than the repurchase, redemption or other
retirement of debentures or other debt securities that are convertible or
exchangeable into any Junior Securities or Parity Securities or the repurchase,
redemption or other retirement of Junior Securities or Parity Securities in
exchange for Junior Securities or Parity Securities, respectively) unless prior
to or concurrently with such declaration, payment, setting apart for payment,
repurchase, redemption or other retirement or distribution, as the case may be,
all accumulated and unpaid dividends on shares of the Convertible Preferred
Stock not paid on the dates provided for in paragraph (a) of Section 4 hereof
(including Arrearages and accumulated dividends thereon) shall have been paid,
except that when dividends are not paid in full as aforesaid upon the shares of
Convertible Preferred Stock, all dividends declared on the Convertible Preferred
Stock and any series of Parity Securities shall be declared and paid pro rata so
that the amount of dividends so declared and paid on Convertible Preferred Stock
and such series of Parity Securities shall in all cases bear to each other the
same ratio that accumulated dividends (including interest accrued on or
additional dividends accumulated in respect of such accumulated dividends) on
the shares of Convertible Preferred Stock and such Parity Securities bear to
each other.

     SECTION 5. Liquidation Preference.

     (a) General.  In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, the holders of the
shares of Convertible Preferred Stock then outstanding shall be entitled to
receive out of the assets of the Company available for distribution to its
shareholders, whether such assets are capital or surplus of any nature, an
amount per share equal to the sum of (i) the unpaid dividends, if any,
accumulated or deemed to have accumulated thereon to the date of final
distribution to such holders, whether or not such dividends are declared; and
(ii) the Stated Value thereof, before any payment shall be made or any assets
distributed to the holders of any Junior Securities. After any such payment in
full, the holders of Convertible Preferred Stock shall not, as such, be entitled
to any further participation in any distribution of assets of the Company.

     (b) Parity Securities.  All the assets of the Company available for
distribution to shareholders after the liquidation preferences of any Senior
Securities shall be distributed ratably (in proportion to the full distributable
amounts to which holders of Convertible Preferred Stock and Parity Securities,
if any, are respectively entitled upon such dissolution, liquidation or winding
up) among the holders of the then-outstanding shares of Convertible Preferred
Stock and Parity Securities, if any, when such assets are not sufficient to pay
in full the aggregate amounts payable thereon.

     (c) Merger Not A Liquidation.  Neither a consolidation nor a merger of the
Company with or into any other Person or Persons, nor a sale, conveyance, lease,
exchange or transfer of all or part of the Company's assets for cash, securities
or other property to a Person or Persons shall be deemed to be a liquidation,
dissolution or winding up of the Company for purposes of this Section 5, but the
holders of shares of Convertible Preferred Stock shall nevertheless be entitled
from and after any such consolidation, merger or sale, conveyance, lease,
exchange or transfer of all or part of the Company's assets to the rights
provided by this Section 5 following any such transaction. Notice of any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
stating the payment date or dates when, and the place or places where, the
amounts distributable to each shareholder of Convertible Preferred Stock in such
circumstances shall be payable, shall be given by first-class mail, postage
prepaid, mailed not less than 30 days prior to any payment date stated therein,
to holders of record as they appear on the stock record books of the Company as
of the date such notices are first mailed.

     SECTION 6. Conversion.  The holders of the Convertible Preferred Stock will
have the following rights with respect to the conversion of the Convertible
Preferred Stock into shares of Common Stock:

          (a) Optional Conversion.  Subject to and in compliance with the
     provisions of this Section 6, each share of Convertible Preferred Stock
     may, at the option of the holder, be converted at any time into fully-paid
     and nonassessable shares of Common Stock (an "Optional Conversion") at the
     rate of
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     one share of Common Stock for each share of Convertible Preferred Stock so
     converted, subject to adjustment as provided in this Section 6 (as so
     adjusted, the "Conversion Rate").

          (b) Mandatory Conversion.  Effective at 5:00 p.m., New York time, on
                 , 2003 (the "Mandatory Conversion Date"), each outstanding
     share of Convertible Preferred Stock shall be automatically converted into
     a number of shares of Common Stock determined by the Conversion Rate then
     in effect (a"Mandatory Conversion") without any further action by the
     holders of such shares and whether or not the certificates representing
     such shares are surrendered to the Company or its Transfer Agent; provided,
     however, that the Company will not be obligated to issue certificates
     evidencing the shares of Common Stock issuable upon such conversion unless
     and until the certificates evidencing such shares of Convertible Preferred
     Stock are either delivered to the Company or its Transfer Agent as provided
     in Section 6(c) below or the holder notifies the Company or the Transfer
     Agent that such certificates have been lost, stolen or destroyed and
     executes an agreement satisfactory to the Company to indemnify the Company
     from any loss incurred by it in connection with such certificates.

          (c) Mechanics of Conversion.  Each holder of Convertible Preferred
     Stock who desires or is obligated to convert the same into shares of Common
     Stock pursuant to this Section 6 will surrender the certificate or
     certificates therefor, duly endorsed, at the principal office of the
     Company or any Transfer Agent for the Convertible Preferred Stock, or the
     holder will notify the Company or the Transfer Agent that such certificates
     have been lost, stolen or destroyed and execute an agreement satisfactory
     to the Company to indemnify the Company from any loss incurred by it in
     connection with such certificates, and will give written notice to the
     Company at such office that such holder elects or is obligated to convert
     the same. Such notice will state the number of shares of Convertible
     Preferred Stock being converted and will specify the name or names (with
     address or addresses) in which a certificate or certificates evidencing
     shares of Common Stock are to be issued. Thereupon, the Company will
     promptly issue and deliver at such office to such holder a certificate or
     certificates for the number of shares of Common Stock which equals the
     number of shares of Common Stock to which such holder is entitled under the
     then-effective Conversion Rate, together with a cash adjustment in respect
     of any fraction of a share of Common Stock as provided in Section 6(i). In
     the event that there shall have been surrendered a certificate or
     certificates representing Convertible Preferred Stock, only part of which
     are to be converted, the Company will promptly issue and deliver, in the
     manner set forth in the preceding sentence, a new certificate or
     certificates representing the number of shares of Convertible Preferred
     Stock which shall not have been converted. In addition, upon any such
     conversion the holder of the shares of Convertible Preferred Stock being
     converted who held such shares of Convertible Preferred Stock at 5:00 p.m.,
     New York time, on any Dividend Record Date shall be paid all accrued but
     unpaid dividends on the shares of Convertible Preferred Stock being
     converted (whether or not authorized or declared) in cash on or before the
     fifth Business Day after, in the case of a Mandatory Conversion, the
     Mandatory Conversion Date, and, in the case of an Optional Conversion, the
     Business Day on which such surrender of shares of Convertible Preferred
     Stock occurs or the date on which an agreement regarding lost, stolen or
     destroyed shares is accepted by the Company. In addition, upon any such
     conversion the holder of the shares of Convertible Preferred Stock being
     converted who held such shares of Convertible Preferred Stock at 5:00 p.m.,
     New York time, on any Dividend Record Date shall be paid all accrued but
     unpaid dividends on the shares of Convertible Preferred Stock being
     converted (whether or not authorized or declared), such amount of dividends
     being determined as of the last preceding Dividend Record Date prior to the
     Conversion Date, in cash on or before the fifth Business Day after, in the
     case of a Mandatory Conversion, the Mandatory Conversion Date, and, in the
     case of an Optional Conversion, the Business Day on which such surrender of
     shares of Convertible Preferred Stock occurs or the date on which an
     agreement regarding lost, stolen or destroyed shares is accepted by the
     Company. Such conversion will be deemed to have been made at the close of
     business on the date of such surrender of the certificates representing the
     share of Convertible Preferred Stock to be converted in the event of a
     conversion pursuant to Section 6(a) hereof or, in the case of a Mandatory
     Conversion, on the Mandatory Conversion Date, and the Person entitled to
     receive the shares of Common Stock issuable
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     upon such conversion will be treated for all purposes as the record holder
     of such shares of Common Stock on such date.

          (d) Adjustment for Changes in Common Stock.  If the Company at any
     time or from time to time after the Issue Date (i) pays a dividend in or
     makes a distribution in shares of Common Stock; (ii) subdivides its
     outstanding shares of Common Stock; or (iii) combines its outstanding
     shares of Common Stock into a smaller number of shares, the Conversion Rate
     in effect immediately prior thereto shall be adjusted so that the holder of
     a share of Convertible Preferred Stock thereafter surrendered for
     conversion shall be entitled to receive the number of shares of Common
     Stock which it would have owned or have been entitled to receive after the
     happening of any of the events described above had such share of
     Convertible Preferred Stock been converted on or immediately prior to the
     record date for such dividend or the effective date of such subdivision,
     combination or reclassification, as the case may be.

          (e) Adjustments for Other Dividends and Distributions.  If the Company
     at any time or from time to time after the Issue Date makes, or fixes a
     record date for the determination of holders of Common Stock entitled to
     receive, a dividend or other distribution payable in securities of the
     Company other than shares of Common Stock, in each such event provision
     will be made so that the holders of the Convertible Preferred Stock will
     receive upon conversion thereof, in addition to the number of shares of
     Common Stock receivable thereupon, the amount of the other securities of
     the Company which they would have received had their Convertible Preferred
     Stock been converted into Common Stock on the date of such event and had
     they thereafter, during the period from the date of such event to and
     including the Conversion Date, retained such securities receivable by them
     as aforesaid during such period, subject to all other adjustments called
     for during such period under this Section 6(e) with respect to the rights
     of the holders of the Convertible Preferred Stock or with respect to such
     other securities by their terms.

          (f) General.  An adjustment made pursuant to this Section 6 shall
     become effective immediately after the record date (in the case of a
     dividend or distribution in shares of capital stock) and shall become
     effective immediately after the effective date (in the case of a
     subdivision, combination or reclassification). No adjustment in accordance
     with this Section 6 shall be required unless such adjustment would require
     an increase or decrease in the Conversion Rate of at least 1.0%; provided,
     however, that any adjustments which by reason of this clause are not
     required to be made shall be carried forward and taken into account in any
     subsequent adjustment. Any calculations under this Section 6 shall be made
     to the nearest one-thousandth of a share.

          (g) Notices of Record Date.  Upon (1) any taking by the Company of a
     record of the holders of any class of securities for the purpose of
     determining the holders thereof who are entitled to receive any dividend or
     other distribution (other than in connection with the declaration and
     payment or regular quarterly dividends in cash on the Convertible Preferred
     Stock), or (2) any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company,
     any merger or consolidation of the Company with or into any other
     corporation, or any voluntary or involuntary dissolution, liquidation or
     winding up of the Company, the Company will cause to be mailed to each
     holder of Convertible Preferred Stock, at such holder's address as it
     appears on the stock record books of the Company, at least twenty (20) days
     prior to the record date specified therein a notice specifying (1) the date
     on which any such record is to be taken for the purpose of such dividend or
     distribution and a description of such dividend or distribution, (2) the
     date on which any such reorganization, reclassification, transfer,
     consolidation, merger, dissolution, liquidation or winding up is expected
     to become effective, and (3) the date, if any, that is to be fixed as to
     when the holders of record of Common Stock (or other securities) will be
     entitled to exchange their shares of Common Stock (or other securities) for
     securities or other property deliverable upon such reorganization,
     reclassification, transfer, consolidation, merger, dissolution, liquidation
     or winding up (but no failure to mail such notice or any defect therein or
     in the mailing thereof shall affect the validity of the corporate action
     required to be specified in such notice).

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          (i) Fractional Shares.  No fractional shares of Common Stock will be
     issued upon conversion of Convertible Preferred Stock. All shares of Common
     Stock (including fractions thereof) issuable upon conversion of more than
     one share of Convertible Preferred Stock by a holder thereof will be
     aggregated for purposes of determining whether the conversion would result
     in the issuance of any fractional shares. If, after the aforementioned
     aggregation, the conversion would result in the issuance of any fractional
     share, the Company will, in lieu of issuing any fractional share, pay cash
     equal to the product of such fraction multiplied by the Common Stock's Fair
     Market Value on the date of conversion.

          (j) Reservation of Stock Issuable Upon Conversion.  The Company will
     at all times reserve and keep available out of its authorized but unissued
     shares of Common Stock, solely for the purpose of effecting the conversion
     of the shares of the Convertible Preferred Stock, such number of its shares
     of Common Stock as will from time to time be sufficient to effect the
     conversion of all outstanding shares of Convertible Preferred Stock. If at
     any time the number of authorized but unissued shares of Common Stock is
     not sufficient to effect the conversion of all then outstanding shares of
     Convertible Preferred Stock, the Company will take such corporate action as
     may, in the opinion of its counsel, be necessary to increase its authorized
     but unissued shares of Common Stock to such number of shares as will be
     sufficient for such purpose.

          (k) Payment of Taxes.  The Company will pay all taxes (other than
     taxes based upon income) and other governmental charges that may be imposed
     with respect to the issuance or delivery of shares of Common Stock upon
     conversion of shares of Convertible Preferred Stock. The Company shall not,
     however, be required to pay any tax or other charge imposed in connection
     with any transfer involved in the issuance or delivery of shares of Common
     Stock in a name other than that in which the shares of Convertible
     Preferred Stock so converted were registered and shall not be required to
     make such issuance or delivery unless and until the person entitled to such
     issuance or delivery has paid to the Company the amount of any such tax or
     has established, to the satisfaction of the Company, that such tax has been
     paid or is not payable.

     SECTION 7. Voting Rights.

     (a) So long as any shares of the Convertible Preferred Stock are
outstanding, (i) each share of Convertible Preferred Stock shall entitle the
holder thereof to vote on all matters voted on by holders of Common Stock; and
(ii) the shares of Convertible Preferred Stock shall vote together with shares
of Common Stock as a single class. Each share of Convertible Preferred Stock
will entitle the holder to the number of votes per share equal to the full
number of shares of Common Stock into which each share of Convertible Preferred
Stock is convertible on the record date for such vote.

     (b) Without the affirmative vote of the holders of a majority of the
outstanding shares of Convertible Preferred Stock, the Company shall not
authorize, create or issue, or reclassify any authorized stock of the Company
into, or increase the authorized amount of, (i) any Senior Securities or Parity
Securities or (ii) any class or series of capital stock or any security
convertible into or exercisable or exchangeable for any class or series of
capital stock, redeemable mandatorily or redeemable at the option of the holders
thereof.

     (c) Without the affirmative vote of the holders of at least a majority of
the outstanding shares of Convertible Preferred Stock, the Company shall not (i)
increase or decrease the aggregate number of authorized shares of such class or
series; (ii) increase or decrease the par value of the shares of such class,
including changing shares having a par value into shares without par value, or
shares without par value into shares with par value; (iii) effect an exchange,
reclassification, or cancellation of all or part of the shares of such class or
series; (iv) effect an exchange, or create a right of exchange, of all or any
part of the shares of another class into the shares of such class or series; (v)
change the designations, preferences, limitations, or relative rights of the
shares of such class or series, (vi) change the shares of such class or series,
whether with or without par value, into the same or a different number of
shares, either with or without par value, of the same class or series or another
class or series; (vii) create a new class or series of shares having rights and
preferences equal, prior, or superior to the shares of such class or series, or
                                        7
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increase the rights and preferences of any class or series having rights and
preferences equal, prior, or superior to the shares of such class or series, or
increase the rights and preferences of any class or series having rights or
preferences later or inferior to the shares of such class or series in such a
manner as to become equal, prior, or superior to the shares of such class or
series; (viii) divide the shares of such class into series and fix and determine
the designation of such series and the variations in the relative rights and
preferences between the shares of such series; or (ix) cancel or otherwise
affect dividends on the shares of such class or series which had accrued but had
not been declared. Such vote or consent shall be taken in accordance with the
procedures specified in paragraph 7(d) below.

     (d) The foregoing rights of shareholders of Convertible Preferred Stock to
take any actions as provided in this Section 7 may be exercised at any annual
meeting of shareholders or at a special meeting of shareholders held for such
purpose as hereinafter provided or at any adjournment thereof.

     (e) The Company shall not enter into any agreement or issue any security
that prohibits, conflicts or is inconsistent with, or would be breached by, the
Company's performance of its obligations hereunder.

     SECTION 8. Exclusion of Other Rights.  Except as may otherwise be required
by law, the shares of Convertible Preferred Stock shall not have any preferences
or relative, participating, option or other special rights, other than those
specifically set forth in this Statement of Designation. The shares of
Convertible Preferred Stock shall have no preemptive or redemption rights
pursuant to this Statement of Designation.

     SECTION 9. Reissuance.  Shares of the Convertible Preferred Stock acquired
by the Company by conversion or otherwise will be deemed authorized but unissued
shares of preferred stock that is undesignated as to series and may be
redesignated and reissued as part of any series of preferred stock, but not as
the Convertible Preferred Stock.

     SECTION 10. Reorganization, Reclassification, Merger, Consolidation, or
Disposition of Assets.  In the event the Company is a party to:

          (a) any reclassification or change of outstanding shares of Common
     Stock issuable upon conversion of shares of Convertible Preferred Stock
     (other than a change in par value, or from par value to no par value, or
     from no par value to par value, or as a result of a subdivision or
     combination of the Common Stock),

          (b) any consolidation or merger other than a merger in which the
     Company is the continuing corporation and which does not result in any
     reclassification, conversion, exchange or cancellation of, or change (other
     than a change in name, or par value, or from par value to no par value, or
     from no par value to par value, or as a result of a subdivision or
     combination of the Common Stock) in, outstanding shares of Common Stock or

          (c) any sale or conveyance of all or substantially all of the property
     or business of the Company as an entirety (including, in the case of any of
     the foregoing events, any statutory exchange of securities with another
     corporation), pursuant to which the Common Stock is converted into the
     right to receive other securities, cash or other property, then lawful
     provisions shall be made as part of the terms of such transaction whereby
     each share of Convertible Preferred Stock then outstanding shall be
     convertible into the kind and amount of shares of stock and other
     securities, cash and other property receivable upon such consolidation,
     merger, sale, conveyance, reclassification, change or statutory exchange by
     a holder of the number of shares of Common Stock into which such share of
     Convertible Preferred Stock was convertible immediately prior to such
     consolidation, merger, sale, conveyance, reclassification, change or
     statutory exchange.

     In any such event, effective provision shall be made (and it shall be a
     condition precedent to any such consolidation, merger, sale, conveyance,
     reclassification, change or statutory exchange that effective provision be
     made), in the articles or certificate of incorporation or other constituent
     document of the resulting or surviving corporation or other corporation
     issuing or delivering such shares of stock, other securities, cash or other
     property or otherwise, so that the provisions set forth herein for the
     protection of the conversion rights of the Convertible Preferred Stock
     shall thereafter be applicable, as nearly as

                                        8
<PAGE>   9

     reasonably may be, to any such other shares of stock and other securities,
     cash or other property deliverable upon conversion of Convertible Preferred
     Stock remaining outstanding or other convertible stock or securities
     received by the holders of Convertible Preferred Stock in place thereof,
     and any such resulting or surviving corporation or other corporation
     issuing or delivering such shares of stock, other securities, cash or other
     property shall expressly assume the obligation to deliver, upon the
     exercise of the conversion privilege, such shares of stock, other
     securities, cash or other property as the holders of shares of Convertible
     Preferred Stock remaining outstanding, or other convertible stock or
     securities received by the holders of shares of Convertible Preferred Stock
     in place thereof, shall be entitled to receive, pursuant to the provisions
     hereof, and to make provision for the protection of the conversion right as
     above provided. In case shares of stock, other securities, cash or other
     property are deliverable upon conversion as aforesaid, then all references
     to shares of Common Stock in this Section 10 shall be deemed to apply, so
     far as provided and as nearly as is reasonable, to any such shares, other
     securities, cash or other property. The provisions of this Section 10 shall
     similarly apply to successive consolidations, mergers, sales, conveyances,
     reclassifications, changes or statutory exchanges.

     SECTION 11. Dividend Received Deduction.  The Company shall treat dividends
on the Convertible Preferred Stock as dividends for federal income tax purposes,
to the extent of the Company's current and accumulated earnings and profits (as
determined for federal income tax purposes). In addition, the Company covenants
not to take any action voluntarily that could reasonably be expected to cause
such dividends on the Convertible Preferred Stock to fail to be eligible for the
dividends received deduction in the case of a corporate holder pursuant to
Section 243 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code").

     SECTION 12. Prohibition on Action by Written Consent.  Any action by the
holders of shares of Convertible Preferred Stock shall be taken at any annual or
special meeting of such holders of Convertible Preferred Stock of the Company
and may not be taken without a meeting by written consent.

     SECTION 13. Identical Rights.  Each share of the Convertible Preferred
Stock shall have the same relative rights and preferences as, and shall be
identical in all respects with, all other shares of the Convertible Preferred
Stock.

     SECTION 14. Amendments.  Any provision of these terms of the Convertible
Preferred Stock may be amended, modified or waived if and only if holders of a
majority of the then-issued and outstanding shares of Convertible Preferred
Stock have consented or by an affirmative vote to such amendment, modification
or waiver of any such provision of this Statement of Designation and upon
obtaining of such affirmative vote, such amendment, modification or waiver shall
be binding on all holders of the Convertible Preferred Stock.

     SECTION 15. Severability of Provisions.  Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.

     SECTION 16. Certificates.  So long as any shares of the Convertible
Preferred Stock are outstanding, there shall be set forth on the face or back of
each stock certificate issued by the Company the following legend:

          Reference is made to Article Fourth of the Restated Articles of
     Incorporation, as amended, which is filed with the Secretary of State of
     Texas and sets forth the powers, designations, preferences and relative,
     participating, optional or other special rights of each class of capital
     stock or series thereof and the qualifications, limitations or restrictions
     of such preferences and/or rights.

                                        9
<PAGE>   10

          The Company will furnish without charge to each shareholder who so
     requests a statement of the powers, designations, preferences and relative,
     participating, optional, or other special rights of each class of stock or
     series thereof and the qualifications, limitations or restrictions of such
     preferences and/or rights. Such request may be made to the Company or to
     the Transfer Agent.

     SECTION 17. Transfer Agent.  The Company has initially appointed the
Transfer Agent to act as the paying agent and conversion agent for the
Convertible Preferred Stock. At any time, the Company may terminate the
appointment of any Transfer Agent and appoint additional or other paying agents
and conversion agents, provided that until the Convertible Preferred Stock has
been delivered to the Company for cancellation, or moneys sufficient to pay the
Arrearage, if any, on the Convertible Preferred Stock have been made available
for payment and either paid or returned to the Company as provided in this
Statement of Designation, the Company will maintain an office or agency in New
York, New York for surrender of Convertible Preferred Stock for conversion. All
moneys deposited with any paying agent or held by the Company in trust for the
payment of the any dividends on any shares of the Convertible Preferred Stock
that remain unclaimed at the end of two years after this payment has become due
and payable will be repaid to the Company or released from such trust to the
Company, and the holder of those shares of the Convertible Preferred Stock will
only be entitled to look to the Company for payment.

     SECTION 18. Reports.  So long as any shares of the Convertible Preferred
Stock are outstanding, the Company will furnish to holders of the then
outstanding shares of Convertible Preferred Stock:

          (a) all quarterly and annual financial information that would be
     required to be contained in a filing by the Company with the Securities and
     Exchange Commission on Forms 10-Q and 10-K under the Securities Exchange
     Act of 1934 (the "Exchange Act"), and, with respect to the annual
     information only, a report by the Company's certified independent
     accountants, and

          (b) all information that would be required to be contained in a
     current report filed by the Company with the Securities and Exchange
     Commission on Form 8-K under the Exchange Act.

     In the event the Company files any of these reports with the SEC, the
     Company will only be required to furnish the reports to holders who request
     a copy of such reports. Unless prohibited by the SEC, the Company will make
     the reports publicly available.

     SECTION 19. Notices.  Any notice referred to herein shall be in writing
and, unless first-class mail shall be specifically permitted for such notices
under the terms hereof, shall be delivered personally, by telecopier, or by
registered or certified mail, postage prepaid, and shall be deemed to have been
given upon personal delivery thereof, upon transmittal of such notice by
telecopy (with confirmation of receipt by telecopy or telex) or seventy-two (72)
hours after transmittal by registered or certified mail, postage prepaid,
addressed as follows:

          (a) if to the Company:

           EXCO Resources, Inc.
           Attention: General Counsel
           6500 Greenville Avenue,
           Suite 600, LB 17
           Dallas, Texas 75206

          (b) if to a holder of the Convertible Preferred Stock, to such holder
     at the address of such holder as listed in the stock record books of the
     Company (which may include the records of any Transfer Agent for the
     Convertible Preferred Stock); or

          (c) to such other address as the Company or such holder, as the case
     may be, shall have designated by notice given in accordance with the
     foregoing.

                                        10
<PAGE>   11

     SECTION 20. Headings of Subdivisions.  The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.

                  [Remainder of Page Intentionally Left Blank]

                                        11
<PAGE>   12

     IN WITNESS WHEREOF, the Company has caused this Statement of Designation to
be signed by T.W. Eubank, its President, and attested by Richard Miller, its
Secretary, this           day of June, 2001.

                                            EXCO RESOURCES, INC.

                                            By:
                                                --------------------------------
                                                T.W. Eubank
                                                President

Attested:

By:
    ------------------------------------
    Richard Miller
    Secretary

                                        12

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