QUARTER SHALL BE
INCREASED BY 2.5%.
(BY WAY OF EXAMPLE, IF THE PERMITTED LEVERAGE RATIO WAS
47.5% PRIOR TO THE SATISFACTION OF THE INTEREST COVERAGE TEST, THE PERMITTED
LEVERAGE RATIO FOR THE NEXT FISCAL QUARTER SHALL BE 50.0%.)
THE INCREASED
PERMITTED LEVERAGE RATIO SHALL REMAIN IN EFFECT UNLESS AND UNTIL FURTHER
INCREASED PURSUANT TO THIS SECTION 6.25(C) OR DECREASED PURSUANT TO SECTION
6.25(B). IN NO EVENT SHALL THE PERMITTED LEVERAGE RATIO EXCEED 57.5%.
(D)
MEASURE OF COMPLIANCE.
BORROWER'S SATISFACTION OF THE INTEREST
COVERAGE TEST SHALL BE MEASURED ON A QUARTERLY BASIS, BASED ON THE FINANCIAL
STATEMENTS DELIVERED TO AGENT PURSUANT TO SECTION 6.1(A) OR (B).
A FAILURE TO
SATISFY THE INTEREST COVERAGE TEST ALONE SHALL NOT CONSTITUTE A DEFAULT OR
UNMATURED DEFAULT.
7.
SECTION 6.26.
SECTION 6.26 IS HEREBY DELETED FROM THE CREDIT
AGREEMENT.
8.
CONDITIONS PRECEDENT.
THIS AMENDMENT SHALL BE EFFECTIVE AS OF
THE DATE ("AMENDMENT EFFECTIVE DATE") UPON WHICH THE FOLLOWING CONDITIONS ARE
SATISFIED:
(A)
THE AGENT SHALL HAVE RECEIVED FROM THE BORROWER AND THE REQUIRED
LENDERS A COUNTERPART OF THIS AMENDMENT SIGNED ON BEHALF OF EACH SUCH PARTY.
(B)
THE AGENT SHALL HAVE RECEIVED FROM THE GUARANTORS THE CONSENT AND
AGREEMENT SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS APPENDIX A.
(C)
THE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND CERTIFICATES AS THE
AGENT OR ITS COUNSEL MAY REASONABLY REQUEST RELATING TO THE ORGANIZATION OR
FORMATION, EXISTENCE AND GOOD STANDING OF THE BORROWER, THE AUTHORIZATION OF
THIS AMENDMENT AND ANY OTHER LEGAL MATTERS RELATING TO THE BORROWER, THE
AGREEMENT OR THIS AMENDMENT, ALL IN FORM AND SUBSTANCE SATISFACTORY TO THE AGENT
AND ITS COUNSEL.
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(D)
THE AGENT SHALL HAVE RECEIVED ALL FEES AND OTHER AMOUNTS DUE AND
PAYABLE ON OR PRIOR TO THE AMENDMENT EFFECTIVE DATE, INCLUDING REIMBURSEMENT OR
PAYMENT OF ALL OUT-OF-POCKET EXPENSES REQUIRED TO BE REIMBURSED OR PAID BY THE
BORROWER HEREUNDER.
The Agent shall notify the Borrower and the Lenders of the Amendment Effective
Date, and such notice shall be conclusive and binding.
9.
REPRESENTATIONS AND WARRANTIES.
THE BORROWER HEREBY REPRESENTS
AND WARRANTS THAT AS OF THE DATE HEREOF:
(a)
The representations and warranties of the Borrower in the Credit
Agreement are true and correct in all material respects.
(b)
There exists no Default or Unmatured Default.
10.
RATIFICATION.
THE CREDIT AGREEMENT, AS AMENDED HEREBY, IS HEREBY
RATIFIED AND REMAINS IN FULL FORCE AND EFFECT.
11.
COUNTERPARTS.
THIS AMENDMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, ALL OF WHICH TAKEN TOGETHER SHALL CONSTITUTE ONE AGREEMENT AND ANY
OF THE PARTIES HERETO MAY EXECUTE THIS AMENDMENT BY SIGNING ANY SUCH
COUNTERPART.
12.
CHOICE OF LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (BUT WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
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IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have caused this
Amendment to be duly executed as of the date first above written.
Borrower:
THE RYLAND GROUP, INC.
By: