1
Exhibit 4.1
January 31, 1997
Tyler Corporation
3200 San Jacinto Tower
2121 San Jacinto Street
Dallas, Texas 75201
Re: Documentary and Standby Letter of Credit Line
Gentlemen:
NationsBank of Texas, N.A. ("NationsBank") is pleased to provide an uncommitted
$4,000,000 Documentary and Standby Letter of Credit Line to Tyler Corporation
("Tyler") and such of its subsidiaries as may have made or may make application
for a letter of credit hereunder (Tyler and each such subsidiary being herein
call a "Borrower") upon the following terms and conditions:
Uncommitted Line: An uncommitted $4,000,000 Documentary and
Standby Letter of Credit Line (the "Line")
which shall be on an "as available" basis.
NationsBank shall have no obligation to issue
any letter of credit under the Line.
NationsBank may, in its discretion, cause any
letter of credit issued under the Line to be
issued by any of its bank affiliates; provided,
however, that if NationsBank undertakes to
issue any such letter of credit through an
affiliate that is not acceptable to the
proposed beneficiary, NationsBank will use
reasonable efforts to cause such letter of
credit to be issued either by it or through an
affiliate acceptable to such proposed
beneficiary. The outstanding available amount
of the letters of credit issued under the Line
may not exceed $4,000,000. The letters of
credit described on Exhibit A hereto which have
been previously issued by NationsBank for the
account of a Borrower (the "Existing Letters of
Credit") shall be deemed to be letters of
credit issued under the Line and shall remain
outstanding to their stated expiration dates
(or, if earlier, the date on which they are
fully drawn) notwithstanding the uncommitted
nature of the Line. NationsBank shall have no
obligation to renew or extend any Existing
Letter of Credit.
Minimum Amount
of Letter of Credit: $5,000.
2
Terms of Letters A Borrower may request a letter of credit under
of Credit: the Line not later than 2:00 p.m. two business
days before the business day such letter of
credit is requested to be issued. The letter
of credit commission (a) for each documentary
letter of credit (including each documentary
Existing Letter of Credit from and after the
date hereof) will be .25% per annum (minimum of
$250) and (b) for each standby letter of credit
(including each standby Existing Letter of
Credit from and after the date hereof) will be
.50% per annum (minimum of $250). Letter of
credit commissions shall be calculated on the
basis of actual days elapsed over a 360 day
year and shall be paid quarterly in advance.
Availability Period: Letters of credit may be requested from the
date of acceptance of this letter by Tyler to
the date either NationsBank or Tyler, in its
sole discretion, terminates the Line in
writing; provided that in no event may letters
of credit be requested after the first
anniversary of the date of this letter.
Letter of Credit The terms of a Borrower's reimbursement
Agreement: obligations in respect of each letter of credit
shall be evidenced by an Application and
Agreement for Commercial Letter of Credit or an
Application and Agreement for Standby Letter of
Credit, as applicable, (a "L/C Agreement") in
form and substance acceptable to NationsBank.
The terms of a Borrower's reimbursement
obligations in respect of each Existing Letter
of Credit shall be evidenced by the Application
and Agreement for Commercial Letter of Credit
or Application and Agreement for Standby Letter
of Credit (each of which shall also be a L/C
Agreement) previously executed and delivered by
such Borrower in connection therewith.
Collateral: The reimbursement obligations of a Borrower in
respect of each letter of credit, including the
Existing Letters of Credit, shall be secured by
cash collateral in an amount equal to the
amount available to be drawn under such letter
of credit pledged by Tyler and/or such Borrower
to NationsBank in a manner and pursuant to
documentation acceptable to NationsBank.
Conditions Precedent: Concurrently with the execution of this letter
and prior to the issuance of any additional
letter of credit under the Line, a Borrower
must deliver to NationsBank the following:
A L/C Agreement
Appropriate Cash Collateral Documentation
Appropriate Corporate Resolutions
Appropriate Incumbency and Specimen Signature
Certificates
Governing Law: Texas
3
THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER DOCUMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED PURSUANT HERETO, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.
Very truly yours,
NATIONSBANK OF TEXAS, N.A.
By: /s/Dan Killian
Title: Vice President
Accepted and Agreed To:
TYLER CORPORATION
By: /s/Linda K. Hill
Title: Treasurer