<PAGE> 1
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TYLER CORPORATION
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
902184 10 0
(CUSIP Number)
Richmond Partners, Ltd.
Louis A. Waters, General Partner
10375 Richmond Avenue, Suite 1615
Houston, Texas 77042
(713) 780-3591
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
September 10, 1997
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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 [ ].
Check the following box if a fee is being paid with this statement
[x]. (A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7).
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).
Page 1 of 6 Pages
<PAGE> 2
CUSIP NO. 902184 10 0 Page 2 of 6 Pages
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1 Name of Reporting Person Richmond
S.S. or I.R.S. Identification No. of Above Partners, Ltd.
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2 Check the Appropriate Box if a Member of a Group (a) [ ]
(See Instructions) (b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions) - WC - BK -
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5 Check if Disclosure of Legal Proceedings is [ ]
Required Pursuant to Items 2(d) or 2(e)
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6 Citizenship or Place of Organization Texas, U.S.A.
- --------------------------------------------------------------------------------
Number of Shares
Beneficially Owned by 7 Sole Voting Power 4,000,00*
Each Reporting Person
With --------------------------------------------
8 Shared Voting Power -0-
--------------------------------------------
9 Sole Dispositive Power 4,000,00*
--------------------------------------------
10 Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each 4,000,00*
Reporting Person
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 16 2/3%
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) PN
- --------------------------------------------------------------------------------
- ---------------------------
* Includes 2,000,000 shares of Common Stock and the Stock Purchase
Warrant exercisable for 2,000,000 shares of Common Stock.
<PAGE> 3
CUSIP NO. 902184 10 0 Page 3 of 6 Pages
- --------------------------------------------------------------------------------
1 Name of Reporting Person Louis A. Waters
S.S. or I.R.S. Identification No. of Above
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(See Instructions) (b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) - AF -
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is [ ]
Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization U.S.A.
- --------------------------------------------------------------------------------
Number of Shares
Beneficially Owned by 7 Sole Voting Power 4,000,00*
Each Reporting Person
With --------------------------------------------
8 Shared Voting Power -0-
--------------------------------------------
9 Sole Dispositive Power 4,000,00*
--------------------------------------------
10 Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each 4,000,00*
Reporting Person
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 16 2/3%
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
- ---------------------------
* Includes 2,000,000 shares of Common Stock and the Stock Purchase
Warrant exercisable for 2,000,000 shares of Common Stock.
<PAGE> 4
CUSIP NO. 902184 10 0 Page 4 of 6 Pages
The following statement of information ("Statement") is being filed by
Richmond Partners, Ltd. and Louis A. Waters pursuant to SEC Rule 13d-1 under the
Securities Exchange Act of 1934, as amended. This Statement is being filed as a
result of the acquisition by Richmond Partners, Ltd. of beneficial ownership of
(i) 2,000,000 shares of the Common Stock of Tyler Corporation and (ii) a Stock
Purchase Warrant immediately exercisable for 2,000,000 shares of the Common
Stock of Tyler Corporation at an exercise price of $2.50. Louis A. Waters is
filing this Statement jointly with Richmond Partners, Ltd. because he is its
sole General Partner.
ITEM 1. SECURITY AND ISSUER.
The class of securities to which this Statement relates is the common
stock, par value $.01 per share (the "Common Stock"), of Tyler Corporation, a
Delaware corporation ("Tyler"), whose principal business address is 2121 San
Jacinto Street, Suite 3200, Dallas, Texas 75201.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is filed by Richmond Partners, Ltd., a Texas limited
partnership ("Richmond Partners"), and Louis A. Waters. Mr. Waters' business
address is 10375 Richmond Avenue, Suite 1615, Houston, Texas 77042. Mr. Waters'
principal occupation is managing his investments. Mr. Waters is a director of
Tyler.
Mr. Waters also serves as the sole General Partner of Richmond
Partners, whose principal business purpose is to acquire properties and
securities for investment purposes. Richmond Partners directly holds 100% of
the securities to which this Statement relates. The principal business address
of Richmond Partners is 10375 Richmond Avenue, Suite 1615, Houston, Texas 77042.
Neither Mr. Waters nor Richmond Partners has ever been convicted in a
criminal proceeding. During the last five years, neither Mr. Waters nor
Richmond Partners has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
been subject to 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. Mr. Waters
is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Effective July 3, 1997, Richmond Partners, Ltd. entered into that
certain Purchase Agreement by and between Richmond Partners and Tyler (the
"Purchase Agreement"), under which Richmond Partners agreed to purchase from
Tyler on the closing date (i) 2,000,000 shares of Common Stock and (ii) a Stock
Purchase Warrant immediately exercisable for an additional 2,000,000 shares of
Common Stock at $2.50 per share. The aggregate purchase price under the
Purchase Agreement was $3,500,000. The closing date under the Purchase
Agreement was September 10, 1997.
Richmond Partners funded approximately $1,750,000 of the purchase
price under the Purchase Agreement from the proceeds obtained through a private
placement of its securities in a negotiated transaction not involving a public
offering and the remainder of the purchase price through a bank loan in the
original principal amount of $1,750,000 from a commercial bank in the ordinary
course of business.
<PAGE> 5
CUSIP NO. 902184 10 0 Page 5 of 6 Pages
No funds or other consideration were otherwise obtained for the
purpose of acquiring, holding, trading or voting the securities, and neither
Richmond Partners nor Mr. Waters, except for the transactions described herein,
have made any prior acquisitions of the Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the acquisition by Richmond Partners of the shares of
Common Stock to which this Statement relates is for investment purposes.
The number of shares of Common Stock acquired by Richmond Partners
does not constitute a majority of the outstanding shares of Common Stock and is
insufficient to permit it to exercise control over Tyler. In addition, Mr.
Waters' position as a director of Tyler is insufficient to permit him to
exercise control over Tyler.
Mr. Waters, in his capacity as a director of Tyler, expects to
propose that the Board of Directors explore the alternatives that might be
available to Tyler with respect to strategic planning for the future business
operations of the company. It is expected that such alternatives may involve
acquisitions or the disposition of material assets by Tyler. But there are
presently no specific plans, proposals, agreements or arrangements agreed to
among the directors of Tyler regarding such matters.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The aggregate number of shares of Common Stock outstanding is
20,007,921 shares, as of August 12, 1997. Richmond Partners is the beneficial
owner of 4,000,000 shares of Common Stock, which is comprised of (i) 2,000,000
shares of Common Stock, and (ii) a Stock Purchase Warrant exercisable for
2,000,000 shares of Common Stock. Such shares were acquired by Richmond
Partners in the transactions described in Item 3 above. Mr. Waters is the sole
General Partner of Richmond Partners, and as such, is also the beneficial owner
of such shares of Common Stock, which represent 16 2/3% of the total number of
shares of Common Stock issued and outstanding.
(b) Mr. Waters, in his capacity as the sole General Partner of
Richmond Partners, retains the sole voting and investment power with respect to
all of the Common Stock described in Item 5(a), above. However, Mr. Waters'
pecuniary interest in such Common Stock is less than all of Richmond Partners'
holdings.
(c) All the securities described in Item 5(a) above were acquired
in the transactions described in Item 3 above within the past sixty (60) days.
(d) Other than the stock pledge described in Item 6, no other
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, the securities described
herein as being beneficially owned by Richmond Partners and Mr. Waters.
(e) Not applicable.
<PAGE> 6
CUSIP NO. 902184 10 0 Page 6 of 6 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
As described in Item 2, above, Mr. Waters is the sole General Partner
of Richmond Partners and, as such, he has the sole voting and investment power
with respect to the securities to which this Statement relates. Subject to the
following sentence, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between Mr. Waters or Richmond Partners and
any other person with respect to any securities of Tyler, including but not
limited to transfer or voting of any of the securities, finders' fees, joint
ventures, loan or option agreements, puts or calls, guarantees of profits,
division of profits or loss, whether giving or withholding of proxies. A total
of 2,000,000 shares of the Common Stock held by Richmond Partners is pledged to
a commercial bank to secure the indebtedness of Richmond Partners described in
Item 3, above; none of the securities that are the subject of this Statement is
otherwise subject to a contingency, the occurrence of which would give another
person voting power or investment power over such securities.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following instruments, which relate to the borrowing of funds to
finance the acquisition as disclosed in Item 3, above, are filed as exhibits to
this Statement:
Exhibit "A" - Agreement in Writing in Accordance with SEC Rule
13d-1(f)(1)(iii).
Exhibit "B" - Promissory Note, by Richmond Partners, as Maker, in the
original principal amount of $1,750,000, dated September 10, 1997.
Exhibit "C" - Security Agreement - Pledge, by Richmond Partners, as
Debtor, dated September 10, 1997.
Exhibit "D" - Specific Guaranty, by Louis A. Waters, as Guarantor,
dated September 10, 1997.
ITEM 8. SIGNATURE.
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this Statement is true, complete
and correct.
Dated: September 18, 1997
RICHMOND PARTNERS, LTD.
By: /s/ LOUIS A. WATERS
---------------------------------
Louis A. Waters, General Partner
/s/ Louis A. Waters
------------------------------------
Louis A. Waters, Individually
<PAGE> 1
EXHIBIT "A"
Agreement in Writing in Accordance with SEC Rule 13d-1(f)(1)(iii)
The undersigned hereby agree:
1. that each of them is responsible for the timely filing of Form
13D and any amendments thereto with regard to Tyler Corporation,
and for the completeness and accuracy of the information concerning
each of them that is contained therein; and,
2. such Form 13D identifies each of the undersigned, contains the
required information with regard to each of the undersigned, and is
filed on behalf of each of the undersigned.
Dated: September 18, 1997.
RICHMOND PARTNERS, LTD.
By: /s/ LOUIS A. WATERS
--------------------------------
Louis A. Waters, General Partner
/s/ LOUIS A. WATERS
-----------------------------------
Louis A. Waters, Individually
<PAGE> 1
EXHIBIT "B"
PROMISSORY NOTE
$1,750,000.00 HOUSTON, TEXAS SEPTEMBER 10, 1997
FOR VALUE RECEIVED, RICHMOND PARTNERS, LTD., a Texas limited
partnership ("MAKER"), promises to pay to the order of _______________________
("Payee"), at its banking house in the City of __________________ in lawful
money of the United States of America, the sum of ONE MILLION SEVEN HUNDRED
FIFTY THOUSAND AND NO/100 DOLLARS ($1,750,000.00), together with interest on
the unpaid principal balance hereof from time to time outstanding until
maturity at a rate per annum equal to the Prime Rate (as hereinafter defined)
from time to time in effect (the Prime Rate from time to time in effect is
herein referred to as the "Stated Rate"); provided, however, in no event shall
interest on this note ever be charged or paid at a rate greater than the
maximum non-usurious rate permitted by applicable federal or Texas law from
time to time in effect, whichever shall permit the higher lawful rate (the
"Highest Lawful Rate").
If at any time or times the Stated Rate would exceed the Highest Lawful
Rate but for the limitation set forth above, the rate of interest to accrue
on the unpaid principal balance of this note during all such times shall be
limited to the Highest Lawful Rate, but any subsequent reduction in the Stated
Rate due to reductions in the Prime Rate shall not become effective to reduce
the interest rate payable below the Highest Lawful Rate until the total amount
of interest accrued on the unpaid balance of this note equals the total amount
of interest which would have accrued if the Stated Rate had at all times been
in effect.
If, at maturity or final payment of this note, the total amount of
interest paid or accrued under the foregoing provisions is less than the total
amount of interest which would have accrued if the Stated Rate had at all times
been in effect, then Maker agrees to pay to Payee, to the extent allowed by law,
an amount equal to the difference between (a) the lesser of (i) the amount of
interest which would have accrued on this note if the Highest Lawful Rate had
at all times been in effect, or (ii) the amount of interest which would have
accrued if the Stated Rate had at all times been in effect, and (b) the amount
of interest accrued in accordance with the other provisions of this note:
Interest shall be computed on the basis of the actual number of days
elapsed in a year composed of 360 days; however, if such computation would
cause the Stated Rate to exceed the Highest Lawful Rate, interest shall be
computed on the basis of a year composed of 365 or 366 days, as the case may
be. At all such times, if any, as Texas law shall establish the Highest Lawful
Rate, the Highest Lawful Rate shall be the "indicated rate ceiling" (as defined
in Tex. Rev. Civ. Stat. Ann. Art. 5069-1.04(a), as amended) from time to time
in effect; provided that Payee may also rely on alternative maximum rates of
interest from time to time in effect under other applicable laws, if they are
higher.
This note is payable as follows:
Accrued interest shall be due and payable monthly, on the 5th day of
each and every calendar month, commencing November 5, 1997 and continuing
regularly and monthly thereafter until two (2) years from the date hereof, at
which time the entire unpaid balance of this note, principal together with
unpaid accrued interest, shall be due and payable in full.
This note may be prepaid in whole or in part at any time without
penalty; provided, however, that all payments received by Payee from Maker upon
this note shall first be applied to the payment of accrued but unpaid interest,
with the balance thereof to be applied to the reduction of the outstanding
principal of this note. All prepayments in excess of accrued interest shall be
applied to the outstanding principal balance of this note in the inverse order
of maturity.
Whenever any payments to be made under this note shall be stated to be
due on a Saturday, Sunday or legal holiday for commercial banks under the laws
of the State of Texas, then such payment shall be made on the next succeeding
business day.
<PAGE> 2
The term "Prime Rate" as used herein shall mean the prime rate as
adopted from time to time by Payee and circulated among officers of Payee for
quotation to Payee's customers as the Prime Rate of Payee in effect for loans
from Payee at Payee's Prime Rate. Without notice to Maker or any other person,
the Prime Rate shall automatically fluctuate upward and downward as and in the
amount by which said prime rate shall fluctuate.
In addition to all principal and accrued interest on this note, Maker
agrees to pay (a) all reasonable costs and expenses incurred by all owners and
holders of this note in collecting this note through probate, reorganization,
bankruptcy, or any other proceeding, (b) the reasonable attorney's fees when
and if this note is placed in the hands of an attorney for collection after
default, and (c) the reasonable attorney's fees, costs and expenses incurred by
Payee in connection with the preparation and filing of the agreements and
documents contemplated herein.
Unless as otherwise provided by law, Maker and any and all co-makers,
endorsers, guarantors and sureties severally waive notice (including, but not
limited to, notice of protest, notice of dishonor and notice of intent to
accelerate and notice of acceleration), demand, presentment for payment,
protest and the filing of suit for the purpose of fixing liability and consent
that the time of payment hereof may be extended and re-extended from time to
time without notice to them or any of them, and each agrees that his, her or
its liability on or with respect to this note shall not be affected by any
release of or change in any security at any time existing or by any failure to
perfect or to maintain perfection of any lien on or security interest in any
such security.
Maker warrants and represents to Payee, and to all other owners and
holders of any indebtedness evidenced hereby, that the loan evidenced by this
Note is and shall be solely for business, commercial or agricultural purposes
and not primarily for personal, family or household use. Maker acknowledges
that the loan evidenced by this Note is specifically exempted under Section
226.3(a) of Regulation Z issued by the Board of Governors of the Federal
Reserve System and under the Truth-in-Lending Act and that no disclosures are
required to be given under such regulations and federal laws in connection with
this Note.
It is agreed that time is of the essence of this agreement, and that in
the event of default in the payment of any installment of principal or interest
when due the holder hereof may declare the unpaid principal balance plus all
accrued but unpaid interest due thereon immediately due and payable without
notice, and failure to exercise said option shall not constitute a waiver on
the part of the holder of the right to exercise the same at any other time.
In the event of (i) the failure of Maker to make any payment herein
provided when due (either of principal and/or interest), or (ii) in the event
the entirety of the unpaid principal balance plus accrued unpaid interest
thereon is declared due, interest on such past-due indebtedness (either
principal and/or interest) shall accrue at the Highest Lawful Rate.
All agreements between the Maker and the Payee, whether now or existing
or hereafter arising and whether written or oral, are hereby expressly limited
so that in no event, whether by reason or acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the money to be loaned hereunder or otherwise
exceed the Highest Lawful Rate. If fulfillment of any provision hereof or any
of mortgage, loan agreement, or other document evidencing or securing the
indebtedness evidenced hereby, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity; and if the Payee shall ever receive anything of value deemed
interest under applicable law which would exceed interest at the Highest Lawful
Rate, an amount equal to any excessive interest shall be applied to the
reduction of the principal amount owing hereunder and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
hereof, such excess shall be refunded to the Maker. All sums paid or agreed to
be paid to the Payee for the use, forbearance, or detention of the indebtedness
of the Maker to the Payee shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full term of such
indebtedness until payment in full so that the rate of interest on account of
such indebtedness is uniform throughout the term thereof. The provisions of
this paragraph shall control all agreements between the Maker and the Payee.
2
<PAGE> 3
Payment of this note is secured by (1) a Security Agreement of even
date herewith executed by Maker in favor of Payee covering certain marketable
securities more particularly described therein, and (2) a Continuing Guaranty
executed by Louis A. Waters.
This note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the
United States of America, except that Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch.
15, as amended (which regulates certain revolving credit loan accounts and
revolving tri-party accounts), shall not apply hereto.
For purposes of any suit relating to this note, Maker hereof submits
itself to the jurisdiction of any court sitting in the State of Texas and
further agrees that venue in any suit arising out of this note or any venue
shall be fixed in Harris County, Texas. Final judgment in any suit shall be
conclusive and may be enforced in any jurisdiction within or without the United
States of America, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of such liability.
RICHMOND PARTNERS, LTD.
By: /s/ LOUIS A. WATERS
------------------------------------
Louis A. Waters, its general partner
Payee may proceed directly against any general partner of Maker without
first exhausting its remedies against Maker. In connection herewith, the Maker
and Payee hereby agree that the Payee is not required to comply with Section
3.05(d) of the Texas Revised Partnership Act. Maker and Payee agree that this
paragraph is intended to comply with the provisions of Section 3.05(e)(2) of
the Texas Revised Partnership Act.
"MAKER"
RICHMOND PARTNERS, LTD.
By: /s/ LOUIS A. WATERS
------------------------------------
Louis A. Waters, its general partner
"PAYEE"
By: /s/
-----------------------------------
Name:
Title:
3
<PAGE> 1
EXHIBIT "C"
SECURITY AGREEMENT - PLEDGE
RICHMOND PARTNERS, LTD., whose address is 10375 Richmond Avenue, Suite
1325, Houston, Texas 77042, hereinafter called "Debtor", for value received,
the receipt and sufficiency of which is hereby acknowledged, hereby grants to
___________ whose address is ______________________________ hereinafter called
"Secured Party", the security interest hereinafter set forth and agrees with
Secured Party as follows:
I. SECURITY INTEREST
Debtor hereby grants to Secured Party a security interest in and agrees
and acknowledges that Secured Party has and shall continue to have a security
interest in the following described property, to-wit:
2,000,000 shares of common stock, par value $0.1 per share, of Tyler
Corporation (the "Shares")
together with all monies, income, proceeds and benefits attributable or
accruing to said property, including, but not limited to, all stock rights,
rights to subscribe, liquidating dividends, stock dividends, property, cash
distributions, dividends paid in stock, new securities, cash dividends or other
properties or benefits of which Debtor is or may hereafter become entitled to
receive on account of said property, and in the event that Debtor shall
receive any such, Debtor shall hold same as Trustee for Secured Party and will
immediately deliver same to Secured Party, to be held by Secured Party in the
same manner as the property specifically described above is held hereunder. All
property of all kinds in which the Secured Party is herein granted a security
interest shall hereinafter be called the "Collateral". The undersigned agrees
to execute such stock powers, endorse such instruments, or execute such
additional pledge agreements or other documents as may be required by the
Secured Party in order to effectively grant to Secured Party the security
interest in the Collateral.
The security interest granted hereby is to secure the payment of that
certain promissory note (the "Note") of even date herewith, executed by Debtor
in favor of Secured Party in the principal amount of $1,750,000.00, together
with any and all other indebtedness and liabilities whatsoever of the Debtor to
Secured Party whether direct or indirect, absolute or contingent, due or to
become due, and whether now existing or hereafter arising and howsoever
evidenced or acquired, and whether joint or several (all of which are
hereinafter sometimes called the "Obligations").
II. WARRANTIES AND COVENANTS OF DEBTOR
Debtor warrants, covenants and agrees that:
(1) Except for the security interest granted hereby, the Debtor is
the owner of the Collateral free of any adverse claim, security interest or
encumbrance; and the Debtor will defend the Collateral against all claims and
demands of all persons at any time claiming the same or interest therein;
(2) Debtor authorizes the Secured Party to file, in jurisdictions
where this authorization will be given effect, a Financing Statement signed
only by the Secured Party covering the Collateral; and at the request of
Secured Party, the Debtor will join the Secured Party in executing one or more
Financing Statements pursuant to the Uniform Commercial Code, in form
satisfactory to the Secured Party, and will pay the cost of filing the same or
filing or recording the Security Agreement in all public offices wherever filing
or recording is deemed by the Secured Party to be necessary or desirable, it
being further stipulated in this regard that the Secured Party may also at any
time or times sign any counterpart of this Security Agreement signed by the
Debtor and file same as a Financing Statement if the Secured Party shall elect
to do so;
(3) Debtor will not sell or offer to sell or otherwise transfer or
encumber the Collateral or any interest therein without the written consent of
the Secured Party;
<PAGE> 2
(4) Debtor will keep the Collateral free from any adverse lien, security
interest or encumbrances;
(5) Debtor will deliver to the holder of the Obligations additional
collateral, upon demand by such holder, if such holder deems the Collateral then
held hereon to be insufficient, to properly and amply secure all Obligations
secured hereby;
(6) Debtor will pay to Secured Party all expenses and expenditures,
including reasonable attorneys' fees and legal expenses, incurred or paid by
the Secured Party in exercising or protecting its interest, rights and remedies
under this Security Agreement.
(7) At all times during the term of the Note the outstanding principal
balance of the Note, together with accrued interest thereon shall not exceed
60% of the value of the Collateral. The term "value of the Collateral" as used
herein shall mean the average closing price for the prior sixty (60) day period
as quoted on a national securities exchange on which the Collateral is then
listed or on an automated quotation system times the number of shares
comprising the Collateral. In the event the outstanding principal amount of the
Note plus accrued interest thereon exceeds 60% of the value of the Collateral,
Debtor agrees to immediately deliver to the Secured Party collateral acceptable
to the Secured Party its sole discretion to further secure the Note with a
value, as reasonably determined by the Secured Party, that when added to the
then value of the Collateral will cause the then outstanding principal balance
of the Note, together with accrued interest thereon, not to exceed 60% of the
combined value of such additional collateral and the value of the Collateral.
(8) Debtor represents that Tyler Corporation is contractually obligated
to file a shelf registration statement with respect to the Collateral within
ninety (90) days after Debtor's written demand; provided, however, that Tyler
Corporation may defer the registration for an additional ninety (90) days if
Tyler Corporation's board of directors determines that such deferral would be
in Tyler Corporation's best interest.
(9) On or before the eighteenth (18th) month after the funding of the
Note, Debtor will make a written demand that Tyler Corporation file a shelf
registration with respect to the Collateral thus exercising the demand right
described in paragraph (8) above. Failure of Debtor to make such written demand
may, at the option of the Secured Party, constitute an event of default
hereunder and under the Note.
(10) Pursuant to that certain Purchase Agreement (herein so called)
dated effective as of July 3, 1997 by and between Tyler Corporation ("Tyler"),
Louis A. Waters, individually and as general partner of the Debtor ("Waters")
and the Debtor, Debtor has agreed to purchase from Tyler the Shares. In
connection therewith, Debtor hereby represents and warrants to the Secured
Party that the Purchase Agreement is in full force and effect and has not been
assigned, modified or amended, nor has Waters or Debtor granted any security
interest therein and Debtor agrees to deliver to the Secured Party any notices,
or other communications given pursuant to the Purchase Agreement
contemporaneously with the giving or receipt of such notices pursuant to the
Purchase Agreement.
III. GENERAL COVENANTS
(1) The security interest granted hereby shall in no way be affected
by any indulgence or indulgences, extension or extensions, change or changes in
the form, evidence, maturity, rate of interest or otherwise of any of the
Obligations hereby secured, nor by want of presentment, notice, protest, suit
or indulgence upon any of such Obligations, nor shall any release of any
security for or of any of the parties liable for the payment of any of the
Obligations secured hereby in any manner affect or impair this pledge, and same
shall continue in full force and effect in accordance with the terms until all
of the Obligations have been fully paid.
(2) Any and all securities and other properties heretofore, now or
hereafter delivered to Secured Party, or in Secured Party's possession, shall
also secure all Obligations and shall be held and construed to be a part of the
Collateral hereunder to the same extent as fully described herein.
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(3) Secured Party shall have the power to endorse and is hereby
appointed Debtor's agent for the purpose of endorsing in the name of Debtor any
instrument or document constituting Collateral or which may be received in
payment of or on account of the Collateral.
IV. EVENTS OF DEFAULT
The Debtor shall be in default under this Security Agreement upon the
happening of any of the following events or conditions:
(1) Default in the payment or performance of any liability or
obligation of the Debtor or of any maker, endorser or guarantor of any
liability or obligation of the Debtor to the holder of the Obligations,
including, but not by way of limitation, default in the payment of any
principal or interest on any of the Obligations when due;
(2) Failure of the Debtor to deliver additional collateral as provided;
(3) Any deterioration or impairment of the Collateral or any part
thereof or any decline or depreciation in the market price thereof (whether
actual or reasonably anticipated) which, in the judgment of the Secured Party,
causes the Collateral to become unsatisfactory as to value or character.
(4) The levy of any attachment, execution or other process against
the Debtor or any of the Collateral;
(5) Death, dissolution, termination of existence, insolvency or
business failure of the Debtor or any endorser, guarantor or surety of any of
the Obligations, or the commission of the act of bankruptcy by, or the
appointment of receiver or other legal representative for any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceedings under any bankruptcy or insolvency law by or against, the
Debtor or any endorser, guarantor or surety for any of the Obligations.
(6) Default in the performance of any other covenant or agreement of
Debtor to Secured Party, whether under this Security Agreement or otherwise;
(7) The occurrence of any event which under the terms of any evidence
of indebtedness, indenture, loan agreement, security agreement or similar
instrument permits the acceleration of maturity of any indebtedness of Debtor
to Secured Party, or to others than Secured Party; or Secured Party receives
notification that another person has or expects to acquire a security interest
in the Collateral or any part thereof.
V. REMEDIES
In the event of the default in the payment of any of the Obligations or
any principal, interest or other amount payable thereunder, when due, or upon
the happening of any of the events of default specified herein, and at any time
thereafter, at the option of the holder thereof, any or all of the Obligations
shall become immediately due and payable without presentment or demand or any
notice to the Debtor or any other person obligated thereon and the Secured
Party shall have and may exercise with reference to the Collateral and
Obligations any and all of the rights and remedies of a secured party under the
Uniform Commercial Code as adopted in the State of Texas, and as otherwise
granted herein or under any other applicable law or under any other agreement
executed by Debtor, including, without limitation, the right and power to sell,
at public or private sale or sales, or otherwise dispose of or utilize the
Collateral and any part or parts thereof in any manner authorized or permitted
under this Security Agreement or under the Uniform Commercial Code after
default by the Debtor, and to apply the proceeds thereof toward payment of any
costs and expenses and attorneys' fees and legal expenses thereby incurred by
the Secured Party and toward payment of the Obligations, in such order or
manner as Secured Party may elect. To the extent permitted by law, Debtor
expressly waives any notice of sale or other disposition of the Collateral and
any other rights or remedies of Debtor or formalities prescribed by law
relative to sale or disposition of the Collateral or exercise of any other
right or remedy of Secured
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Party existing after default hereunder; and to the extent any such notice is
required and cannot be waived, Debtor agrees that if such notice is mailed,
postage prepaid, to the Debtor at the address shown hereinabove at least five
(5) days before the time of the sale or disposition, such notice shall be
deemed reasonable and shall fully satisfy any requirement for giving of said
notice.
Secured Party is hereby granted the right, after default in payment of
any of the Obligations or in the performance of any covenants secured hereby,
to transfer at any time to itself or its nominee the securities or other
property hereby pledged, or any part thereof, and to thereafter exercise all
voting rights with respect to such security so transferred and to receive the
proceeds, payments, moneys, income or benefits attributable or accruing thereto
and to hold the same as security for the Obligations hereby secured, or at
Secured Party's election, to apply such amounts to the Obligations, whether or
not then due, in such order as Secured Party may elect, or, Secured Party may,
at its option, without transferring such securities or property to its nominee,
exercise all voting rights with respect to the securities pledged hereunder and
vote all or any part of such securities at any regular or special meeting of
shareholders, and the undersigned does hereby name, constitute and appoint as a
proxy of the undersigned the President or any Vice President of Secured Party,
in the undersigned's name, place and stead to vote any and all such securities,
as said proxy may elect, for and in the name, place and stead of the
undersigned, such proxy to be irrevocable and deemed coupled with an interest.
Debtor hereby agrees to cooperate fully with Secured Party in order to
permit Secured Party to sell, at foreclosure or other private sale, the
Collateral pledged hereunder. Specifically, Debtor agrees to fully comply with
the Securities Laws of the United States and of the State of Texas and to take
such action as may be necessary to permit Secured Party to sell or otherwise
transfer the securities pledged hereunder in compliance with such laws.
VI. MISCELLANEOUS
Second Party may, at its option, following the occurrence of an Event
of Default, demand, sue for, collect or make any compromise or settlement it
deems desirable with reference to the Collateral. The Secured Party shall not
be obligated to take any steps necessary to preserve any rights in the
Collateral against prior parties, which Debtor hereby assumes to do.
No delay or omission on the part of Secured Party in exercising any
rights hereunder shall operate as a waiver of any such right or any other
right. A waiver on any one or more occasions shall not be construed as a bar
to or waiver of any right or remedy on any future occasion.
It is the intention of the parties hereto to comply with the usury laws
of the State of Texas; accordingly, it is agreed that notwithstanding any
provision to the contrary in the Security Agreement, or in any of the documents
evidencing the Obligations or otherwise relating thereto, no such provision
shall require the payment or permit the collection of interest in excess of the
maximum permitted by law. If any excess of interest in such respect is
provided for, or shall be adjudicated to be so provided for, in this Security
Agreement, or in any of the documents evidencing the Obligations or otherwise
relating thereto, then in such event (a) the provisions of this paragraph shall
govern and control, (b) neither the Debtor hereof nor his heirs, legal
representatives, successors or assigns or any other party liable for the
payment hereof, shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount permitted by law, (c) any
such excess which may have been collected shall be, at the option of the holder
of the instrument evidencing the Obligations, either applied as a credit
against the then unpaid principal amount thereof or refunded to the Maker
thereof and (d) the effective rate of interest shall be automatically subject
to reduction to the maximum lawful contract rate allowed under the usury laws
of the State of Texas as now or hereafter construed by the courts having
jurisdiction.
In order to induce Secured Party to advance and loan such funds to
and/or for the benefit of Debtor, Debtor hereby covenants and agrees that in
the event of default by the Debtor (an event of default shall be any one of
those events of default stated above) that the Secured Party shall have the
absolute and unconditional right, without the prior
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notice and/or any prior hearing of any kind whatsoever, to seize and take
possession of the Collateral, and furthermore the Debtor does hereby expressly
waive any right to any prior notice and/or any prior hearing prior to seizure
and taking possession of the Collateral and/or property by the Secured Party in
the event of default by the Debtor.
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Debtor shall bind his heirs,
executors or administrators and his or its successors or assigns. The rights
and remedies of Secured Party hereunder are cumulative and the exercise of any
one or more of the remedies provided herein shall not be construed as a waiver
of any of the other remedies of Secured Party.
Any provision found to be invalid under the laws of the State of Texas,
or any other state having jurisdiction, shall be invalid only with respect to
the offending provision. All words used herein shall be construed of such
gender or number as the circumstances require. If this Security Agreement is
executed by more than one debtor, the Obligations of all such debtors shall be
joint and several. The law of the State of Texas shall apply to this Security
Agreement and its construction and interpretation.
EXECUTED on this 10 day of September, 1997.
"DEBTOR"
RICHMOND PARTNERS, LTD.
By: /s/ LOUIS A. WATERS
-----------------------------------------
Louis A. Waters, its general partner
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<PAGE> 1
EXHIBIT "D"
SPECIFIC GUARANTY
This guaranty, dated the 10th day of September, 1997, is executed by
the undersigned, LOUIS A. WATERS (hereinafter referred to as "Guarantor"), in
favor of _________________ (hereinafter referred to as "Obligee").
WITNESSETH:
WHEREAS, RICHMOND PARTNERS, LTD. (hereinafter referred to as
"Borrower"), and Guarantor desire Obligee to extend financial and credit
accommodations to Borrower;
WHEREAS, Obligee is willing to extend credit and financial
accommodations to Borrower only upon the condition that Guarantor execute and
deliver to Obligee this Specific Guaranty and undertake the obligations of
Guarantor set out herein;
NOW, THEREFORE, in consideration of financial and credit accommodations
extended or to be extended by Obligee to Borrower and other good and valuable
consideration, receipt of which is hereby acknowledged, Guarantor agrees as
follows:
1. OBLIGATION OF GUARANTOR.
Guarantor absolutely and unconditionally guarantees to the Obligee the
payment and performance of all indebtedness, obligations and liabilities (the
"Indebtedness") of or owed by Borrower to Obligee (and also to others, to the
extent of participations granted them by Obligee) now existing or hereafter
incurred or created, direct or indirect, absolute or contingent, arising in
connection with that one certain Promissory Note of even date herewith from
Borrower to Obligee in the original principal amount of $175,000,000.00. The
obligations of Guarantor contained in this guaranty shall be absolute and
unconditional, without regard to the validity, legality, regularity or
enforceability of the Indebtedness or any instrument evidencing, securing or
relating to said Indebtedness and shall not be reduced or affected in any way
by the failure or omission to enforce any right against Borrower or Guarantor
or by any other action which may in any manner or to any extent vary the risks
of Guarantor or which might otherwise constitute a legal or equitable
discharge of Guarantor; it being the purpose and intent of the parties hereto
that this guaranty and the obligations of Guarantor hereunder shall be absolute
and unconditional under any and all circumstances and shall not be discharged
except by payment and performance as herein provided. Guarantor agrees that,
without the necessity of any reservation of rights against Guarantor and
without notice to or further assent by Guarantor, (1) any demand for payment of
any or all of the Indebtedness may be rescinded by the party making such demand
and the Indebtedness reinstated or continued, and (2) the Indebtedness or any
collateral security therefor or rights of offset with respect thereto may, from
time to time, in whole or in part, be renewed, extended, modified, rearranged,
compromised or released by Obligee or, without notice to or further assent by
Guarantor, who will remain bound hereunder, notwithstanding any such
rescission, renewal, extension, modification, rearrangement, compromise or
release.
2. WAIVER BY GUARANTOR.
Guarantor waives:
(a) Notice of the granting of any loan to Borrower or the incurring of
any indebtedness of Borrower or the terms or conditions thereof;
(b) Presentment, demand for payment, protest or notice of dishonor of
any indebtedness of Borrower;
(c) Any other notice to which Guarantor might be entitled;
<PAGE> 2
(d) Joinder of the Borrower in any suit or action to enforce this
guaranty, in particular, and without in any way limiting the foregoing,
Guarantor waive any right to have Obligee sue Borrower or take any
other action against Borrower as a prerequisite to Obligee's taking any
action or bringing any suit against Guarantor under this guaranty; and
(e) The right to interpose against Obligee any setoff or counterclaim
of any nature or description, whether of Borrower or Guarantor, in the
computation of any amounts payable by Guarantor hereunder or in any
litigation arising out of or relating to this guaranty; and Guarantor
further agrees that his obligations and liabilities hereunder shall not
be affected or impaired, regardless of any impossibility or illegality
of performance on the part of the Borrower.
3. RIGHTS OF OBLIGEE.
Obligee may, at any time, without consent of or notice to Guarantor,
without incurring responsibility to the Guarantor, without impairing or
releasing the obligations of the Guarantor, upon or without terms or conditions
and in whole or in part:
(a) Change the manner, place or terms of payment or change or extend
the time of payment of, renew or alter any indebtedness, obligations or
liability of Borrower hereby guaranteed or any liabilities incurred
directly or indirectly hereunder and the guaranty herein made shall
apply to the indebtedness, obligations and liabilities of the Borrower,
changed, extended, renewed or altered in any manner;
(b) Sell, exchange, release, surrender, realize, upon or otherwise,
deal with in any manner and in any order, any property at any time
pledged or mortgaged to secure or securing the indebtedness, obligations
or liabilities hereby guaranteed or pledged or mortgaged to secure this
guaranty or any indebtedness, obligations or liabilities incurred
directly or indirectly hereunder or any offset against any of said
indebtedness, obligations or liabilities;
(c) Exercise or refrain from exercising any rights against Borrower or
others or otherwise act or refrain from acting;
(d) Settle or compromise any indebtedness, obligations or liabilities
hereby guaranteed or hereby incurred and may subordinate the payment of
all or any part of such liabilities to the payment of any liabilities
which may be due Obligee or others;
(e) Apply any sums paid to any Indebtedness of Borrower to Obligee,
regardless of what Indebtedness or Borrower to Obligee remains unpaid;
and
(f) Release Borrower or any other guarantor of Borrower's Indebtedness
of Obligee from any liability to Obligee.
4. TERMINATION OF GUARANTY.
The obligations of Guarantor hereunder shall terminate upon, and only
upon, written release of Guarantor by Obligee; provided, however, no
termination hereof shall affect in any manner any rights of Obligee arising
under this guaranty with respect to liabilities arising prior to such written
release by Obligee and the sole effect of any such written release by Obligee
shall be to exclude from this guaranty liabilities arising thereafter which are
unrelated to liabilities theretofore arising or transactions theretofore
entered into.
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5. PARTIES IN INTEREST.
This guaranty shall continue in full force and effect, notwithstanding
the death, incapacity or legal disability of Guarantor and shall be binding on
the successors, assigns, estate, personal representatives and heirs, as the
case may be, of Guarantor and shall inure to the benefit of Obligee, its
successors, heirs and assigns.
6. PLACE OF PERFORMANCE.
The obligations of Guarantor hereunder shall be payable and performable
at Houston, Harris County, Texas.
7. ADDITIONAL OBLIGATIONS OF GUARANTOR.
In addition to obligations of Guarantor set forth elsewhere herein,
Guarantor agrees to pay to Obligee:
(a) All costs, attorney's fees and other expenses incurred by Obligee in
an effort to enforce and/or collect all or any part of the Indebtedness;
and
(b) All costs, attorney's fees and expenses incurred by Obligee in an
effort to enforce or collect the obligations of Guarantor pursuant to
this guaranty.
8. COMPLIANCE WITH LAWS.
It is the intention of the parties hereto to comply with all laws in
force and applicable hereto; accordingly, it is agreed that, notwithstanding
any provision to the contrary herein or in any note, instrument or other
document evidencing or securing the Indebtedness or otherwise related hereto or
thereto, no such provision shall require the payment or permit the collection
of interest from Guarantor in excess of the maximum non-usurious rate permitted
by applicable law. If any excess of interest in such respect is provided for
or shall be adjudged to be so provided for, then in such event, (i) the
provisions of this paragraph shall govern and control, (ii) neither Guarantor
nor his heirs, executors or administrators, successors or assigns or any other
party liable under Guarantor, shall be obligated to pay the amount of such
interest, to the extent that it is in excess of the maximum non-usurious amount
permitted by applicable law, (iii) any such excess which may have been
collected shall be, at Obligee's option, either refunded or applied to the
Indebtedness, and (iv) the effective rate of interest covered by this guaranty
shall be automatically subject to reduction to the maximum non-usurious lawful
contract rate allowed under the applicable law as now or hereafter construed by
the courts having jurisdiction thereof.
9. NO WAIVER BY OR ESTOPPEL AGAINST OBLIGEE.
No failure to exercise and no delay in exercising on the part of
Obligee any right, power or privilege hereunder or at law or in equity shall
operate as waiver thereof, nor shall any single or partial exercise of any such
right, power or privilege preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law or in equity.
10. SUBROGATION AND SUBORDINATION.
Guarantor hereby agrees that Guarantor shall not be entitled to be
subrogated to any of the rights of Obligee or any of its successors, endorsees
and assigns against the Borrower of any collateral security held for payment of
the Indebtedness until all of the Indebtedness has been paid in full, performed
and discharged. Guarantor further agrees that any indebtedness of Borrower to
Guarantor, whether now existing or hereafter incurred, shall be subordinate to
the Indebtedness of Borrower to Obligee and shall not be paid or entitled to
be paid in whole or in part until the Indebtedness of Borrower to Obligee has
been paid and satisfied in full.
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11. REINSTATEMENT OF OBLIGATIONS.
This guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time payment of any of the Indebtedness is rescinded or
must otherwise be restored or returned to the Borrower upon insolvency,
bankruptcy or reorganization of Borrower or otherwise, all as though such
payment had never been made.
12. GOVERNING LAW.
This guaranty has been executed and delivered in and shall be construed
and enforced in accordance with the laws of the State of Texas.
13. JURISDICTION AND VENUE.
Any suit or action by Guarantor to enforce any right under this
agreement or to obtain a declaration thereof shall be brought in a court of
competent jurisdiction in Harris County, Texas. Any suit by Obligee to enforce
any right hereunder or to obtain a declaration of any right or obligation
hereunder may, at the sole option of Obligee, be brought (i) in any court of
competent jurisdiction in Houston, Harris County, Texas, or (ii) in any court
of competent jurisdiction where jurisdiction may be had over Guarantor.
Guarantor hereby expressly consents to the jurisdiction of the foregoing courts
for such purpose.
14. SEVERABILITY.
If any clause or portion of this guaranty shall be declared
unenforceable, invalid or illegal, the remaining clauses and portions shall not
be affected thereby.
15. PAROL EVIDENCE.
Guarantor hereby acknowledges that this guaranty sets forth all of the
terms of the agreement between Obligee and Guarantor and that any statements,
representations or affirmations made by the Obligee and its agents or Guarantor
prior to or contemporaneously with the execution of this guaranty are to be of
no force and effect whatever in determining the liability of Guarantor under
this guaranty. Without limiting the foregoing, Guarantor warrants, represents
and acknowledges that Obligee has made no representations or statements to
Guarantor which have been relied upon by Guarantor in executing this guaranty
concerning the financial condition of Borrower, the likelihood that Guarantor
will be required to pay or perform the Indebtedness hereby guaranteed or
otherwise.
16. INDEPENDENT GUARANTY.
This guaranty shall be independent of, in addition to and cumulative of
any other guaranty which may be executed by any guarantor in favor of the
Obligee.
17. MULTIPLE PARTS.
Anyone signing this guaranty shall be bound thereby, whether or not any
other party signs this guaranty or is released therefrom at any time.
18. INSOLVENCY OF GUARANTOR.
Without limiting the other provisions hereof, in the event of
bankruptcy or insolvency of Guarantor, the entire Indebtedness of Borrower,
whether direct or indirect, absolute or contingent, due or to become due, shall
become due and payable from Guarantor to Obligee and shall be paid immediately
by Guarantor to Obligee.
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EXECUTED AND EFFECTIVE as of the date first set forth above.
/s/ LOUIS A. WATERS
----------------------------
LOUIS A. WATERS
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