Document:

Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

 

 

Aracruz Celulose S.A.

 

as Buyer

 

 

BC Brasil Investment Corporation

 

as Seller

 

 

Boise Cascade L.L.C.

 

As Guarantor

 

 

Boise Cascade do Brasil
Ltda.

 

the Company

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
  2

  
	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATIONS

  	
   

  	
  3

  
	
  2.

  	
   

  	
  PURCHASE AND SALE OF QUOTAS

  	
   

  	
  3

  
	
  3.

  	
   

  	
  PURCHASE PRICE AND PAYMENT

  	
   

  	
  4

  
	
  4.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES
  OF SELLER AND GUARANTOR

  	
   

  	
  4

  
	
  5.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES
  OF BUYER

  	
   

  	
  8

  
	
  6.

  	
   

  	
  POST CLOSING COVENANTS

  	
   

  	
  9

  
	
  7.

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  9

  
	
  8.

  	
   

  	
  CONFIDENTIALITY AND PUBLIC
  ANNOUNCEMENTS

  	
   

  	
  11

  
	
  9.

  	
   

  	
  ANTITRUST LAW COMPLIANCE

  	
   

  	
  11

  
	
  10.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIST OF
  ATTACHMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.2(a)

  	
   

  	
  17

  
	
  EXHIBIT 2.2(c)

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1.1

  	
   

  	
  33

  
	
  SCHEDULE 1.2

  	
   

  	
  35

  
	
  SCHEDULE 3.2

  	
   

  	
  37

  
	
  SCHEDULE 4.2

  	
   

  	
  38

  
	
  SCHEDULE 4.4(a)

  	
   

  	
  41

  
	
  SCHEDULE 4.4(b)

  	
   

  	
  43

  
	
  SCHEDULE 4.5

  	
   

  	
  71

  
	
  SCHEDULE 4.5.1

  	
   

  	
  87

  
	
  SCHEDULE 4.8

  	
   

  	
  91

  
	
  SCHEDULE 4.9

  	
   

  	
  109

  
	
  SCHEDULE 4.11

  	
   

  	
  111

  
	
  SCHEDULE 4.12(a)

  	
   

  	
  112

  
	
  SCHEDULE 4.12(b)

  	
   

  	
  114

  
	
  SCHEDULE 4.12(c)

  	
   

  	
  116

  
	
  SCHEDULE 4.13

  	
   

  	
  127

  
	
  SCHEDULE 4.17

  	
   

  	
  129

  
	
  SCHEDULE 7.1(a)

  	
   

  	
  131

  
	
  SCHEDULE B

  	
   

  	
  143

  

 

1

 

THIS STOCK PURCHASE AGREEMENT (hereinafter referred to as the “Agreement”) is
made this 1st day of July, 2008 (the “Closing Date”),
by and between:

 

(a) on one side:

 

·                  Aracruz
Celulose S.A.,  a corporation organized and existing under the laws of
Brazil, with head offices at Rua São Geraldo, 1800, City of Guaiba, State of
Rio Grande do Sul, Brazil, enrolled with the CNPJ/MF under No. 42.157.511/0039-34
(the “Buyer”);

 

(b) on the other side:

 

·                  BC Brasil Investment Corporation,  a
corporation organized and existing under the laws of Delaware, USA, with head
offices at 1111 West Jefferson
Street, Ste 300, in the City of Boise, Idaho, USA, registered with the CNPJ/MF under No. 05.760.081/0001-41
(“BCBIC” or “Seller”);
and

 

(c) as guarantor:

 

·                  Boise Cascade L.L.C., a limited liability company organized and
existing under the laws of Delaware , with head offices at 1111 West Jefferson Street, Ste 300, in the
City of Boise, Idaho, USA (the
“Guarantor”);

 

(d) and, as intervening party:

 

·                  Boise Cascade do Brasil Ltda., a company organized and existing under the
laws of Brazil, headquartered in the city of Guaíba, State of Rio Grande do
Sul, at Estrada Costa Gama, No. 1001, and enrolled with the CNPJ/MF under No. 03145127/0001-97
(the “Company”).

 

RECITALS

 

A.                                   Seller is the owner, in the aggregate, of
100% percent of the outstanding quotas of the Company.

 

B.                                   Buyer acknowledges the existence of the
rights and obligations of Company and Seller’s parent company, Boise Cascade,
L.L.C. and its Affiliates (“BC Parent”)
with Global (Ex-US) Timber Investors 6 Limited (“Global”)
and its Affiliates (collectively “GFP”) arising
out of the agreements which copies are attached as Schedule B (“Global Agreements”), and it is willing to purchase the
Company subject to its respective obligations to GFP and to indemnify, defend,
and hold harmless Seller and BC Parent, BC Parent’s predecessor in interest,
OMX which was formerly named Boise Cascade Corporation, and their respective
Affiliates, officers, directors and employees (collectively “Sellers’ Group”, which, for mere ease of reference, shall
include OMX and its Affiliates for purposes of Section 7 hereunder) from
and against any claim by GFP of a breach of any obligations of Company to GFP
whether occurring before or after Closing or by reason of the purchase and sale
of the Company provided for herein.

 

2

 

C.            Therefore, in reliance upon representations,
warranties, covenants and agreements and subject to the terms and conditions
contained herein, Seller wishes to sell to Buyer the totality of the quotas of
the Company, consisting of 158,515,171 (one hundred fifty eight million, five
hundred fifteen thousand, one hundred seventy one) quotas (the “Quotas”), and subject to certain terms and conditions, Buyer
wishes to purchase such Quotas.

 

In consideration of the mutual promises contained herein, Buyer,
Seller, Company and Guarantor (individually, a Party and collectively, the “Parties”) mutually agree as follows:

 

1.                                                   DEFINITIONS AND INTERPRETATIONS

 

1.1                                             Capitalized terms used throughout this
Agreement are listed and defined in Schedule 1.1, whenever a definition
is not already available in the body of this Agreement.

 

1.2                                             Unless the context clearly requires
otherwise, the interpretation of other terms used throughout this Agreement
will be made according to the rules set forth at Schedule 1.2.

 

2.                                                   PURCHASE AND SALE OF QUOTAS

 

2.1.                                          Purchase and Sale.  On the
terms and subject to the conditions set forth in this Agreement, Seller agrees
to sell, assign and transfer all the Quotas to Buyer, and Buyer hereby agrees
to purchase all the Quotas from Seller on the Closing Date.

 

2.2.                                          The following acts shall be taken
simultaneously by the Parties on the Closing Date:

 

(a)                                              Seller shall deliver to Buyer (i) the
amendment to the articles of association of the Company evidencing the transfer
of all the Quotas to Buyer, the name change of the Company, the replacement of
officers, and other related amendments, pursuant to Exhibit 2.2.(a).(i);
(ii) a copy of the relevant
empowerment documents of Seller and Guarantor as necessary to authorize the
execution of this Agreement and the consummation of the transactions contemplated
hereby, including a certified copy of the powers of attorney
authorizing the Brazilian representative(s) of the Seller who executed the
amendment to the articles of association of the Company mentioned in (i); (iii) tax and other clearance certificates,
as required under Brazilian laws for the filing with the board of trade of the
amendment to the articles of association of the Company mentioned in (i); (iv) two
counterparts of the corresponding Commercial Registry filing request duly
executed by a representative of the Company; (v) a power of attorney by
the Company and its current officers allowing those people previously indicated
by Buyer to represent and act on behalf of the Company as from the Closing
Date; and (vi) such
additional documents necessary for the transference of the Quotas as Buyer may
reasonably request.

 

(b)                                             Buyer shall deliver to Seller (i) payment
of the Purchase Price in accordance with (and as defined in) Section 3.2; (ii) a
copy of the relevant empowerment documents of Buyer as necessary to authorize
the execution of this Agreement and the consummation of the transactions
contemplated hereby; and (iii) such additional documents necessary for the
transference of the Quotas as Seller may reasonably request.

 

(c)                                              Each officer of the Company identified in the
exhibit shall submit to Buyer an instrument of resignation from its position
and full release to the Company, substantially in the form of Schedule
2.2(c), effective as of the Closing Date.

 

3

 

3.                                                   PURCHASE PRICE AND PAYMENT

 

3.1.                                          Purchase Price. The total purchase price for the Quotas
shall be forty seven million, eighty three thousand, three hundred thirty three
dollars and fifty four cents (US$ 47,083,333.54) (the “Purchase
Price”).

 

3.2                                             Method of Payment. 
Payment of the Purchase Price shall be made on the Closing Date by wire
transfer of immediately available funds to Seller’s bank account(s) in the
United States of America, as designated in Schedule 3.2. Buyer shall
pay all applicable Brazilian taxes on currency exchange remittance of the
Purchase Price.

 

3.2.1.                               Seller hereby grants Buyer full, unconditional and irreversible release
in relation to the payment of the Purchase Price.

 

4.                                                   REPRESENTATIONS AND WARRANTIES OF
SELLER AND GUARANTOR

 

The Seller and the Guarantor hereby jointly and severally make the
following representations and warranties to Buyer with respect to themselves
and to the Company, which shall be considered true, complete and correct as of
the Closing Date. All representations and warranties of Seller, Company and
Guarantor in this Agreement, except for Sections 4.1, 4.2 and 4.3 below, are
limited to the knowledge of said parties, and the knowledge of Seller, Company
and Guarantor shall mean only the knowledge of Dean M. Brown, Jose Valmir
Calori and/or Daniel Hutchinson.

 

4.1.                                          Corporate Status.  (i) The
Company is duly organized and validly existing under the laws of Brazil, and
has the corporate power to own its assets and carry on its business as now
being conducted and as conducted until December 2007; (ii) Seller and
Guarantor are duly organized and validly existing under the laws of the
jurisdiction of their incorporation or formation, as the case may be, and have
the corporate power to own their assets and carry on their business as now
being conducted; and (iii) the Guarantor is the holding entity of the main
distribution and manufacturing assets and activities of Sellers’ Group.

 

4.2.                                          Capitalization. The total issued and outstanding capital of
the Company is R$158,515,171.00 (one hundred fifty eight million, five
hundred fifteen thousand, one hundred seventy one Reais), comprising
158,515,171 (one hundred fifty eight million, five hundred fifteen thousand,
one hundred seventy one) quotas with a par value of R$ 1.00 (one Real) each.
The Quotas are duly authorized, validly issued and are fully paid. All of the
Quotas of the Company are legally and validly held by Seller, and are held free
and clear of any and all security interests, pledges, fiduciary sales, liens,
encumbrances, agreements or claims of any kind whatsoever, and no third
party’s consent or approval is required for the execution, delivery and/or
performance of the obligations contemplated hereunder, except for the letter of
acknowledgment and release, which copy is attached to Schedule 4.2, related to a
certain Loan and Security Agreement, dated as of February 22, 2008
(as amended, supplemented, or otherwise modified from time to time), among
Guarantor, certain affiliates of Guarantor as borrowers and guarantors, and
Bank of America, N.A., as agent.

 

4.3.                                          Corporate Authority. 
Seller, Guarantor and Company have the legal right, power and authority
to enter into this Agreement, and Seller has the legal right, power and
authority to transfer, assign and deliver the Quotas as provided in this
Agreement. The execution and delivery of this 

 

4

 

Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate or other action of Seller
and Guarantor, and this Agreement constitutes the legal, valid and binding
obligation of each of the Seller and Guarantor, enforceable against the Seller,
Company and Guarantor in accordance with its terms. The execution and delivery
of this Agreement will not constitute a breach or violation of any law, bylaws, articles
of association or incorporation, regulation, court order, lawsuit, or license
applicable to any of them or their respective businesses. The relevant
amendment to the articles of association of the Company will convey to Buyer
title to the Quotas, free and clear of any and all liens or encumbrances,
security interests, agreements or claims of any kind whatsoever.

 

4.4.                                          Fixed  Assets and Real Properties.  Schedule 4.4(a) contains a list
of all material real property owned, possessed or utilized in the conduct of
the Company’s business (hereinafter referred to as “Real
Property”).  Schedule 4.4(b) contains
a description of fixed assets owned, leased or utilized in the conduct of the
Company’s business (hereinafter the “Fixed Assets”).
All material assets used by Company during the regular course of its
operational business activities (until December 2007), including, without
limitation, plants, equipment, machinery, vehicles and office materials, are in
regular working order and duly accounted for, except for those identified in Schedule
4.5.1.

 

4.4.1.                                 The Company is the lawful owner and/or the
rightful possessor of all Real Property and Fixed Assets of the Company, free
and clear of any and all liens, encumbrances or charges of any kind or nature,
except for the assets of GFP in accordance with the Global Agreements. All
leases are in full force and effect and the Company is in compliance with all
its material obligations. The Company has received no written notice of default
under any agreement governing any such lease, nor is the Company involved in
any dispute with any third party in such lease agreements.

 

4.5.                             Financial Statements. True and complete
copies of the Financial Statements of the Company are included in Schedule
4.5. The Financial Statements (including, without limitation, the
calculation of all its items and accounts) were prepared in accordance with
Brazilian GAAP, applied consistently.

 

4.5.1.                    Absence of certain changes. From April 30,
2008, until the Closing Date, the Company has been managed and conducted in the
ordinary course of business, consistent with past practices, except for the
suspension of activities and operations since December 2007 and its obvious effects. Except as disclosed in Schedule
4.5.1, the Company has not, since April 30, 2008:

 

(a)                                 made any relevant
change in its articles of association, besides the changes reflecting the
payment of outstanding quotas and the release of pledged quotas;

 

(b)                                made any material
changes to its accounting methods or practices for financial or tax purposes;

 

(c)                                 made any corporate
reorganization, merger, acquisition, spin-off or any other relevant corporate
change;

 

(d)                                issued or sold any
quota representative of its corporate capital, or any other securities;

 

(e)                                 entered into any
agreement with Seller, Guarantor or any Affiliates, except under market
conditions, in the ordinary course of business, consistent with past practices
and that may be terminated by the Company at any time and without any cost;

 

5

 

(f)                                   practiced any act
unrelated to its commercial activities or not properly registered in its books
and accounting records;

 

(g)                                entered into any debt
transactions representing an amount, individually or in the aggregate, of more
than thirty thousand reais (R$30,000.00) or in conditions out of the ordinary
course of business;

 

(h)                                sold, assigned,
encumbered or transferred assets that, individually or in the aggregate, exceed
thirty thousand reais (R$30,000.00), except in the ordinary course of business,
consistent with past practices, and for the Timber Purchase Agreement executed
with Buyer;

 

(i)                                    waived any rights,
individually or in the aggregate, of more than thirty thousand reais
(R$30,000.00);

 

(j)                                    hired, promoted or appointed any directors,
or increased wages or benefits to be paid to any director.

 

4.6.                             Guarantees. The Company does not have any pending or
outstanding guarantees of any kind (such as “fianças”,
“avais” or guarantee to perform material
obligations) granted by the Company to any Affiliate, officer or third parties.

 

4.7.                             Equity interest. Company does not hold, directly or
indirectly, any equity or capital interest in any other corporation,
partnership, joint venture (other than the Global Agreements), limited
liability company, joint venture or other entity, company or business, in
Brazil or abroad, and is not a party to any agreement, understanding, contract,
option, obligation or commitment involving any (actual or potential) interest
or investment in any such entity.

 

4.8.                             Proceedings and Investigations.  Except as otherwise disclosed in Schedule
4.8, there are no actions, suits, claims, judicial or administrative
proceedings, or governmental authority’s investigations (a) legally
notified to the Company until the first business day prior to Closing Date in
which the Company is a party, or (b) to the knowledge of the management of
the Seller and of the Company:  (i) already
threatened by a third party or authority; or (ii) materially affecting the
Company or its assets and properties, in any court or before any arbitrator or
governmental authority.

 

4.9.                             Material Contracts.  Schedule
4.9 lists all contracts currently in force to which the Company is a party
or bound, or to which their respective properties or Assets are bound, and
which (a) represent (or may represent) an aggregate annual value equal or
superior to R$ 100,000.00 (one hundred thousand reais) and/or (b) contain
any kind of restriction or limitation, or require any special formality,
notification or consent, in respect of the change of control of the Company or
any other aspect of the transaction contemplated hereunder.

 

4.9.1.                    All
Company’s obligations to GFP (including obligations to pay GFP for wood
harvested pursuant to its contractual commitments to them) are set forth under,
and only under, the Global Agreements (listed in Schedule B).

 

4.10.                       Related Party Agreements. Except for the Global Agreements
and the Guarantee, there are no relevant agreements, arrangements or
understandings (whether oral or written) currently in effect to between the
Company and any the Seller, Guarantor or any of their Affiliates or any
shareholder, officers or directors of any of them.

 

6

 

4.11.                       Insurance. All insurance policies of the Company are listed
in Schedule 4.11, and are in full force and effect in accordance with
their respective terms and conditions. The Company has not committed any fraudulent
act or omission that would qualify as a breach thereby (or as a reason for
reducing the insurer’s coverage) under any such the insurance policy.
Nevertheless, Buyer acknowledges that the Company has not communicated the
insurance companies of the latest dismissal of personnel.

 

4.12.                       Employment, Labor and Social Security Matters.  Schedule
4.12(a) contains a list of all employees of the Company, according to
the list of retained employees provided by Buyer, as well as their respective
salaries and other benefits granted by the Company, all of such employees are
regularly registered as such in the proper register books, in compliance with
Legal Requirements. Schedule 4.12(b) lists all collective
bargaining agreements (“acordos coletivos de trabalho”) or
collective conventions (“convenções coletivas de trabalho”)
currently in force to which Company is bound. The Company has no profit
participation agreements or benefit plans, except as provided for in the
documents listed in Schedule 4.12(c).

 

4.13.                       Outsourcing.  Schedule 4.13 lists all outsourced
service providers and the number of respective people allocated to work at or
for the Company as of May 30, 2008, according to the information provided
by such service providers, i.e. GFIP receipt.

 

4.14.                       Intellectual Property. The Company does not have any intellectual property (trademarks,
software, patents, domain names, etc.) registered under its name, in Brazil or
elsewhere.

 

4.15.                       Government Approvals. No action, consent or approval of,
registration or filing with, or any other action by, any governmental authority
(in Brazil or elsewhere) will be required in connection with the performance by
Seller or Guarantor of this Agreement or in connection with the transactions
contemplated hereby except for Section 9 below.

 

4.16.                       Conflicting
Instruments. Except as indicated in the Global Agreements and the Guarantee, the
execution, delivery and performance by each of Seller, Company and Guarantor of
this Agreement and the consummation thereby of this transaction do not and will
not violate any provision of their corporate documents, nor create any liens or
security interests, or conflict with or result in a material breach of, create
an event of default under, or give any third party the right to accelerate any
material obligation under, any material agreement, mortgage, order, arbitration
award, judgment or decree to which each of Seller, Company and Guarantor is a
party or by which it is bound or affected.

 

4.17.                       Powers of Attorney. All powers of attorney in effect that
have been granted by Company (or Guarantor or Seller), with ad negotia or ad judicia
powers in respect of the Company and/or undertake obligations of any nature on
behalf of the Company, are listed in Schedule 4.17.

 

4.18.                       Bank Accounts and Credit Facilities. All bank accounts in
the name of Company are listed in Schedule 4.18, which also lists the
agreements that currently enable overdrafts, loans or other credit facilities
or that make such credit facilities available to Company.

 

4.19.                       Quality of Information. All written information and documents of
the Company provided by the Company, Seller and Guarantor during the due
diligence to Buyer and its advisors until the Closing Date, are true, accurate
and complete in all their material aspects, and do no omit any information
which may affect the Company’s condition or that may induce the Buyer into
error.

 

7

 

5.                                      REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby makes the following representations and warranties to
Seller, which shall be considered complete, true and correct as of the Closing
Date:

 

5.1                                Authority.  (a) Buyer
has the legal right, power and authority to enter into this Agreement; (b) the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all the necessary
corporate or other action of Buyer; and (c) this Agreement constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.

 

5.2.                             Government Approvals. No action, consent or approval of,
registration or filing with, or any other action by, any governmental authority
will be required in connection with the performance by the Buyer of this
Agreement or in connection with the transactions contemplated hereby except as
set forth in Section 9.

 

5.3.                             Financial Capacity.  Buyer has full
financial capacity to comply with the payment obligations provided under this Agreement.

 

5.4                                Purchase for Investment. Buyer is acquiring the Quotas for
investment for Buyer’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part of the Quotas, and Buyer has no
present intention of selling, granting any participation in, or otherwise
distributing the Quotas, except transferring all or part of the Quotas to
Affiliates of Buyer. Buyer does not have any contract, undertaking, agreement
or arrangement with any third party to sell, transfer or grant participations
in the Quotas to such third party. Buyer, however, is considering selling part
of the Company’s assets immediately following the present transaction.

 

5.5.                             Conflicting Instruments. The execution, delivery and performance by
Buyer of this Agreement and the consummation thereby of this transaction do not
and will not violate any provision of its bylaws, nor create any liens or
security interests, or conflict with or result in a material breach of, create
an event of default under, or give any third party the right to accelerate any
material obligation under, any material agreement, mortgage, order, arbitration
award, judgment or decree to which Buyer is a party or by which it is bound or
affected.

 

5.6.                             Due Diligence. Buyer was granted with full and unrestricted access to information of
the Company prior to this Agreement, and it acknowledges that this transaction
comprises the acquisition of the Company, by means of the transference of all
Quotas, with all its existing and future rights, obligations and liabilities,
without prejudice to Section 7.2, including but not limited, to all rights, obligations and liabilities
related to the Global Agreements, the Guarantee and transactions performed under
these agreements, and that this structure is reflected in the
Purchase Price. Buyer represents and warrants in good faith that the Seller and
Guarantor’s representations and warranties (a) do not contradict, and (b) fairly
reflect the relevant findings and conclusions of Buyer’s due diligence of the
Company.

 

8

 

6.                                      POST
CLOSING
COVENANTS

 

6.1                                Assignment of Guarantee. Within fifteen (15)  days  of the Closing
Date, Seller and Guarantor undertake to use their best efforts, with Buyer’s
full cooperation, to obtain preferably within 90 (ninety) days after the
Closing Date: (a) the written acknowledgement of the occurrence of the
present transaction by GFP, and written authorization from GFP for the
assignment of the Guarantee (as defined in Section 7.1(a) below) to
the Buyer, and (b) the written acknowledgement by GFP that there is no
current default or noncompliance by Company or Guarantor or Affiliate under the
Global Agreements and/or the Guarantee. The Parties agree that, after and
despite the use of best efforts, the failure to obtain (a) and/or (b) within
one hundred and eighty (180) days of the Closing Date shall not constitute
Seller or Guarantor’s breach of this Section 6.1. For the avoidance of
doubt, in case 6.1(a) is achieved, Buyer shall be obliged to enter into
the respective assignment of the Guarantee (provided that under the same terms
and conditions of the Guarantee and the Global Agreements, in force as of the
Closing Date).

 

6.2                                Use of Trademark. Buyer undertakes not
to use the name, logo or trademark of Seller or Guarantor, especially in the
conduction of the businesses of the Company, provided that Buyer and Company
will be entitled to refer thereto, for transition purposes, to indicate and inform
the succession to third parties after the Closing. This undertaking shall
include the names “Boise”, “Boise Cascade”, “BC” “BCB” and other names used by
Seller and Guarantor in the conduction of their businesses.

 

7.                                      INDEMNIFICATION

 

7.1.                             Scope of Buyer’s Indemnity.  Buyer understands (and Seller confirms) that it is the intention of the
Seller, and a determining cause of this Agreement, that after Closing Date
Seller and Guarantor shall have no liability or responsibility towards Buyer,
the Company, or any third parties for the business, actions or omissions of the
Company. Therefore, Buyer agrees
to indemnify, hold harmless and defend the Seller’s Group from and against any
and all loss, Liability, claim, damage, or expense (including costs of litigation
and reasonable fees and expenses of attorneys, accountants and other experts),
or otherwise (collectively, a “Loss” or “Losses”), suffered or incurred as a result of:

 

(a)                                 any claim of liability under the Guarantee, Marketing, and Take if
Required Agreement as amended (the “Guarantee”)
executed on February 21st 2001 by Boise Cascade Corporation,
currently known as OfficeMax Incorporated and Global (ex-US) Timber Investors 6
Limited (as amended, and attached as Schedule 7.1(a)), including,
without limitation, claims based on actions or failures to act by the Company
and or Seller’s Group that occurred prior to the Closing Date;

 

(b)                                any Liability
arising from the actions or failures to act of the Company with respect to the
period before and after the Closing Date, except if otherwise indemnifiable
under Section 7.2 below;

 

(c)                                 any breach of any
representation or warranty provided for in Section 5 above, or breach of
any other obligation of Buyer hereunder; or

 

(d)                                any claim by GFP that the transactions provided for in this Agreement
violate the obligations of the Company or any member to the Seller’s Group to
GFP in respect of the Company, its assets, or the Global Agreements or the
Guarantee.

 

7.2.                             Scope of Seller and Guarantor’s Indemnity. Seller and Guarantor understand that an assumption for Buyer to
acquire the Company is that all representations and warranties contained in Section 4
above (including their disclosure Schedules) are materially complete, true and
correct. Therefore, Seller and
Guarantor agree to jointly and severally indemnify, hold harmless and defend 

 

9

 

Buyer, Company and their respective officers, directors and employees
from and against any and all Losses, suffered or incurred as a result of any
breach of any representation or warranty provided for in Section 4 above,
or breach of any other obligation of Seller or Guarantor hereunder.

 

7.2.1.                    Seller and Guarantor shall not have any
liability to Buyer under this Agreement for any Losses suffered or incurred by
Buyer as a result of any breach of any representation or warranty provided for
herein or breach of any other obligation of Seller or Guarantor hereunder
except (a) to the extent (and then only to the extent) the aggregate of
such Losses (i.e., an individual Loss and/or the aggregate of several Losses
summed in the Indemnity Basket) exceed two hundred and fifty thousand US
Dollars (US$ 250,000.00) (the “Indemnity  Basket”), and then only for such
Losses in excess thereof, and (b) up
to an aggregate indemnifiable amount equal to one million five hundred thousand
US Dollars (US$ 1,500,000.00) (i.e., not including, and already after the
discount of the Indemnity Basket) (the “Maximum Indemnity”).  The Indemnity Basket and the Maximum Indemnity
of Seller and Guarantor specified above shall not apply to any Losses arising
under Sections 4.1, 4.2, and 4.3.

 

7.2.2.                    The Parties hereby agree that Seller and
Guarantor’s indemnity obligation under this Agreement shall be limited to the
period of two (2) years, ending on June 30, 2010. The time limitation
specified above shall not apply to any Losses arising under Sections 4.1, 4.2,
and 4.3. If Seller and Guarantor are notified about a potential Loss within the
period provided in this clause, the expiration of this term will not affect
Buyer’s right of indemnification for that specific (already notified) Loss when
it finally materializes.

 

7.2.3.                    The indemnification under this Section 7.2
shall be the only remedy available to Buyer against Seller and Guarantor in
respect of any possible breach of this Agreement, and Buyer hereby expressly
waives any right or action in order to rescind, limit or deny in any form this
Agreement or any of its obligations towards Seller’s Group.

 

7.3.                             Indemnity Procedures.   If
any Indemnified Party shall become aware of facts which give rise or threaten
to give rise to the Indemnifying Party’s obligation to indemnify one or more
Indemnified Parties pursuant to this Section (an “Event
Subject to Indemnification”), regardless of whether or not the Event
Subject to Indemnification involves a third party, such Indemnified Party shall
send written notice (the “Notification”)
to the Indemnifying Party promptly, but in no event later than 5 (five)
business days (or less if any urgent measure is required, with reasonably
enough time in advance so as to allow proper and timely reaction by the parties
to address the issue) after discovery of the Event Subject to Indemnification,
disclosing the details thereof known to the Indemnified Party, and the
Indemnifying Party shall respond within 2 (two) business days as of the receipt
of Notification (or sooner, if circumstances require). This procedure also
applies for any new fact discovered with respect to an Event Subject to
Indemnification already notified to the other Party.

 

7.4.                             If an Event Subject to Indemnification shall
arise, Indemnifying Party ‘s response shall indicate its intention either to (a) pay
the amount involved; (b) assume the defense of any threatened or pending
litigation or proceeding (which it shall have the right to do by counsel
reasonably satisfactory to the Indemnified Party, and Indemnified Parties shall
have the right to retain its own counsel to monitor the defense at Indemnified
Parties’ own cost); or (c) not to assume the defense of the threatened or
pending litigation or proceeding because it is beyond the scope of its
indemnification obligation hereunder. Whichever Party assumes the defense shall
be entitled to the cooperation of the other Party in preparing the
defense.  The Indemnifying Party agrees
to provide the Indemnified Party with access to all of current or old Company
and Indemnifying Party’s files, personnel and records concerning said defense.

 

10

 

7.5                                The Indemnifying Party shall make payments to
indemnify Losses only when the respective liability becomes final by a
non-appealable and irrevocable settlement, judgment or arbitration award,
provided that such payments shall be payable only when a minimum aggregate
amount of ten thousand reais (R$10,000.00) is reached and then only for such Losses in excess thereof (except with respect to the indemnity scope
of the Indemnity Basket under Section 7.2.1).

 

8.                                      CONFIDENTIALITY AND PUBLIC
ANNOUNCEMENTS

 

8.1                                Confidentiality.          Each Party shall hold confidential all information obtained in
connection with this Agreement with respect to the other Party which is not
otherwise public knowledge, not independently known or developed, not received
from a third party who is not subject to an obligation of confidentiality or
not in the public domain through no fault of the receiving Party. Except as
provided in Section 6.1 above, each Party shall refrain from disclosing
and shall hold confidential the terms and conditions of this Agreement,
including without limitation, the consideration to be paid hereunder, except to
the extent that disclosure of such information is necessary or desirable for
consummation of the transactions contemplated hereby, demanded by any governmental
authority, required by applicable law or stock exchange regulations to which a
Party is subject, or with the consent of the other party hereto.

 

8.2                                Public Announcements.  Any public
announcement or similar publicity with respect to this Agreement or the
transactions contemplated hereby will be issued, if at all, at such time and in
such form and manner as the Parties determine. A Party may not unreasonably
withhold its consent to a request by another Party to make such public
announcement or similar publicity.  If a
Party is required by applicable
law or stock exchange regulations to which such Party is subject to make such
public announcement or publicity, it may do so provided such Party has
delivered to the other Parties a copy of the proposed announcement or publicity
not less than 24 hours prior to making such proposed announcement or
publicity.  Seller and Buyer will consult with each other concerning the means by
which Company’s employees, customers, and suppliers and others having dealings
with the Company will be informed of this Agreement or the transactions
contemplated hereby.

 

9.                                      ANTITRUST LAW COMPLIANCE

 

9.1.                             Approval of Transaction. 
Buyer shall, within 15 (fifteen) business days after the Closing Date,
cause the Company to file such information and seek such approvals of CADE as
may be required with respect to the transactions contemplated herein under the
antitrust laws and regulations of Brazil and bear the corresponding related
costs. Buyer and Seller and Guarantor agree to make available, or cause to be
made available, to the Company or each other (as applicable) such information
as may reasonably be requested relative to businesses, assets and property of
Buyer, Guarantor, Seller or the Company, or any of their Affiliates (as the
case may be), as may be required to prepare such filings and to file any
additional information requested by such agencies under such laws, rules or
regulations.

 

9.2.                             Buyer shall bear the risk of the antitrust
approval and satisfy any requirements of the Brazilian antitrust authorities at
its own expense.

 

9.3.                             If, by any reason, CADE rejects the
transaction or imposes conditions for its approval, the Parties undertake to
discuss in good faith possible alternatives available.

 

11

 

10.                                GENERAL PROVISIONS

 

10.1.                       Further Assurances.  The
Parties agree to execute such other documents or agreements and do such other
things as may be necessary or desirable for the implementation of this
Agreement and the consummation of the transactions contemplated hereby.

 

10.2.                       Notices.   Any notice required to be given under this
Agreement must be given in writing and will be effective on receipt when
delivered by registered airmail, hand delivery or by facsimile confirmed by the
sending of the original by registered airmail to the Party, at the address
stated below or to such other address as such Party may designate by written
notice in accordance with the provisions of this Section.

 

	
  to Seller or Guarantor:

  	
  Boise
  Cascade, L.L.C.

  	
   

  
	
   

  	
  Att: President

  	
   

  
	
   

  	
  1111 West Jefferson
  Street

  	
   

  
	
   

  	
  Suite 300

  	
   

  
	
   

  	
  Boise, Idaho USA

  	
   

  
	
   

  	
  83702-5389

  	
   

  
	
   

  	
  legal@bc.com

  	
   

  
	
   

  	
  Fax 1 208 384 6566

  	
   

  
	
   

  	
  Tel 1 208 384 6460

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  c/c: Boise Cascade, L.L.C.

  	
   

  
	
   

  	
  Att: General Counsel

  	
   

  
	
   

  	
  1111 West Jefferson Street

  	
   

  
	
   

  	
  Suite 300

  	
   

  
	
   

  	
  Boise, Idaho USA

  	
   

  
	
   

  	
  83702-5389

  	
   

  
	
   

  	
  legal@bc.com

  	
   

  
	
   

  	
  Fax 1 208 384 6566

  	
   

  
	
   

  	
  Tel 1 208 384 6460

  	
   

  
	
   

  	
   

  	
   

  
	
  to Buyer or Company:

  	
  Aracruz
  Celulose S.A.

  	
   

  
	
   

  	
  Att: Walter Lidio
  Nunes

  	
   

  
	
   

  	
  Operations Director

  	
   

  
	
   

  	
  Rodovia Aracruz -
  Barra do Riacho s/no, km 25,

  	
   

  
	
   

  	
  Aracruz - ES, CEP 29197-900

  	
   

  
	
   

  	
  wln@aracruz.com.br

  	
   

  
	
   

  	
  Fax 27 3270 2136

  	
   

  
	
   

  	
  Tel 27 32702122

  	
   

  

 

12

 

	
   

  	
  c/c: Renato Alfonso Rostirolla

  	
   

  
	
   

  	
  Gerente Florestal - Unidade Guaíba

  	
   

  
	
   

  	
  AV São Geraldo, 1800,

  	
   

  
	
   

  	
  Guaíba - RS, CEP 92500-000

  	
   

  
	
   

  	
  rarostirolla@aracruz.com.br

  	
   

  
	
   

  	
  Fax 51 2139 7109

  	
   

  
	
   

  	
  Tel 51 2139 7111

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  c/c: José Luiz Braga

  	
   

  
	
   

  	
  Diretor Jurídico

  	
   

  
	
   

  	
  Av Brigadeiro Faria Lima 2277, 4o andar - São
  Paulo – SP

  	
   

  
	
   

  	
  01452-000

  	
   

  
	
   

  	
  jlb@aracruz.com.br

  	
   

  
	
   

  	
  Fax 11 3301 4202

  	
   

  
	
   

  	
  Tel 11 3301 4282

  	
   

  

 

10.3.        Entire Agreement. This Agreement, together with all Schedules
referenced herein, is the Parties’ entire agreement. It supersedes all prior or
contemporaneous oral or written communications, proposals and representations
with respect to its subject matter and prevails over any conflicting or
additional terms of any quote, order, acknowledgment or similar communications
between the parties during the term of this Agreement. No modification to this
Agreement will be binding, unless in writing and signed by a duly authorized
representative of each Party.

 

10.4.        Governing
Law and Arbitration.  This Agreement shall be governed
and construed in accordance with
the laws of Brazil without giving effect to the conflict of law rules thereof.

 

(a)                              In the event of any dispute, controversy or
claim arising out of or relating to this Agreement, or the performance, breach,
termination, or invalidity hereof (“Dispute”), such
Dispute shall be the subject of an attempt at an amicable solution, for which
purpose a Party shall give notice to the other Party, giving a concise
description of the matter in question and the position of such Party in respect
thereof and proposing a meeting among the chief executive officers or their
designees (“Senior Officers”) of the Parties
in São Paulo, Brazil (or such other place as they may agree) with the purpose
of resolving the Dispute.  In the event
such a meeting is called, the meeting shall take place within 10 days of its
being requested. Unless the Parties otherwise agree, if such meeting does not
take place within such 10 days or if within 10 days after such meeting the
Senior Officers have not resolved such matter, then the Dispute shall be
resolved by arbitration as provided in Section 10.4(b).

 

(b)                             If a Dispute arises and is not settled by
amicable negotiations within the prescribed time period by the representatives
of the Parties and the Senior Officers of the Parties in accordance with Section 10.4(a),
such Dispute shall be settled by arbitration in accordance with the
International Chamber of Commerce Arbitration Rules in effect on the date
hereof.  Judgment thereon may be entered
by any court having jurisdiction. If a Party wishes to initiate an arbitration
with respect to a Dispute, it shall first provide ten (10) days advance
notice to the other Party, setting forth that it intends to initiate
arbitration, the issues in dispute and a summary in reasonable detail of its
position with respect thereto. Other than the procedure described in Section 10.4(a),
arbitration shall be the sole and exclusive forum for resolution of any
Dispute, and the award thereunder shall be final, conclusive and binding on
those participating in the arbitration.

 

13

 

                                               (c)                                 The number of arbitrators shall be three,
each of whom shall be disinterested in the dispute, controversy or claim and
shall have no connection with any Party. One arbitrator will be selected by
each Party and one by mutual agreement of the first two arbitrators or, if they
cannot agree, by the appointing authority which shall be designated in
accordance with the International Chamber of Commerce Arbitration Rules (the
“Appointing Authority”). The Parties
shall have thirty (30) days to each appoint an arbitrator.  If a Party fails to appoint an arbitrator
within such thirty (30) day period, the Appointing Authority shall appoint an
arbitrator for that Party.  The Parties
and the Appointing Authority may appoint from among the nationals of any
country, whether or not a Party is a national of that country.  The place of arbitration shall be Miami,
Florida, USA. The arbitration shall be conducted in the English language, and
any foreign-language documents presented at such arbitration hearing shall be
accompanied by an English translation thereof. Each Party hereby submits to the
non-exclusive jurisdiction of the courts of Delaware, USA in any action, suit
or proceeding with respect to the enforcement of the arbitration provisions of
this Agreement and with respect to the enforcement of any award thereunder.

 

                                               (d)                                The decision of the arbitral panel shall be definitive and shall bind the
Parties and be enforceable in accordance with the law.

 

                                               (e)                                 Each Party will bear its own attorneys’ and
experts’ fees and expenses, regardless of the content of the final award. The
fees and expenses of the arbitral panel, fees and expenses of the experts
appointed by the arbitral panel, and the administrative expenses of the
arbitration center which may be incurred during the arbitration shall be
supported by the Parties according to the rules of arbitration center and
the final award will rule on the obligation of the losing party
reimbursing the amount paid in advance by the other party.

 

                                               (f)                                   The Parties accept and convene that, for the purposes of law, the request
for the initiation of an arbitration proceeding shall be equivalent to the
filing of a lawsuit with the same object.

 

10.5.                       Expenses & Taxes.  Except as otherwise expressly provided in this
Agreement, each Party to this Agreement will bear its respective expenses and
taxes incurred in connection with the preparation, execution, and performance
of this Agreement and the transactions contemplated hereby, including all fees
and expenses of agents, representatives, counsel, and accountants. Seller will
cause the Company not to incur any out-of-pocket expenses in connection with
this Agreement.

 

10.6.                       Severability.  If
at any time subsequent to the date hereof, any provisions of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.

 

10.7                          Waiver.  The
rights and remedies of the Parties are cumulative and not alternative.  Neither the failure nor any delay by any
Party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law, (a) no
claim or right arising out of this Agreement can be discharged by one Party, in
whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other Party; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is given;
and (c) no 

 

14

 

notice to or demand on one Party will be deemed to be a waiver of any
obligation of such Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement.

 

10.8.        Assignment.  The
respective rights and obligations of the Parties under this Agreement may not
be assigned by Buyer or the Seller without the prior written consent of the
other; provided, however, that Buyer may assign this Agreement in whole or in
part to any Affiliate of Buyer upon prior written notice to Seller, in which
case Buyer shall continue jointly liable with the respective assignee.

 

10.9.        Governing Language.  This
Agreement is executed in the English language, and all of its terms and
provisions shall be construed in accordance with the English language, which
shall prevail, notwithstanding any translation thereof, which may have been
submitted for regulatory approval or enforcements purposes in Brazil whether
agreed by the Parties or not.

 

10.10.      Counterparts.  This
Agreement may be executed in 4 (four) counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the same instrument.

 

10.11.      Sole Agreement. This Agreement is the only Agreement
between the Parties in respect of the transactions contemplated herein. This
Agreement supersedes and substitutes any other instrument or communication
entered into among the Parties.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Stock Purchase Agreement,
in the City of Guaíba, RS, Brasil, as of the day and year first above written.

 

Buyer:

 

 

	
  Aracruz Celulose S.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Walter Lidio Nunes

  	
   

  	
  /s/ Renato Alfonso Rostirolla

  
	
  By: Walter Lídio Nunes

  	
   

  	
  By: Renato Alfonso Rostirolla

  
	
  Its. Officer

  	
   

  	
  Its. Attorney in fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Guarantor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BC Brasil Investment Corporation

  	
   

  	
  Boise Cascade LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Dean Michael Brown

  	
   

  	
  /s/ Dean Michael Brown

  
	
  By: Dean Michael Brown

  	
   

  	
  By: Dean Michael Brown

  
	
   

  	
   

  	
   

  
	
  Its: Attorney in fact

  	
   

  	
  Its: Attorney in fact

  

 

15

 

Signature page of
the Stock Purchase Agreement dated  July 1st,
2008, by and among Aracruz Celulose S.A., Boise Cascade do Brasil Ltda. BC
Brazil Investment Corporation and Boise Cascade LLP.

 

Company:

 

	
  Boise Cascade do Brasil
  Ltda.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Dean Michael Brown

  	
   

  
	
  By: Dean Michael Brown

  	
   

  
	
  Its. Managing Officer

  	
   

  

 

Witnesses:

 

 

	
  1.

  	
      /s/ Mateus Osvaldo Kapper

  	
   

  	
  2. 

  	
      /s/
  Maria Lisette Silva Nogueira

  
	
    Name:

  	
   

  	
    Name:

  
	
     ID: 6004883192

  	
   

  	
     ID: 298.887.600-25

  

 

 

The
Seller and Guarantor appoint Felipe G. Lamb, registered with the CPF/MF under
no. 771.505.700-20 to initialize the Exhibits and Schedules.

 

 

	
  Signature:

  	
  /s/
  Felipe G. Lamb

  	
   

  	
  Initial:

  	
  /s/
  FGL

  

 

 

The
Buyer appoints Eurídice Mason, registered with the CPF/MF under no.
016.719.707-05 to initialize the Exhibits and Schedules.

 

 

	
  Signature:

  	
  /s/
  Euridice Mason

  	
   

  	
  Initial:

  	
  /s/
  EM

  

 

16Exhibit 10.1

 

THIRD
AMENDMENT TO CREDIT AGREEMENT

 

This THIRD
AMENDMENT TO CREDIT AGREEMENT (“Amendment”), dated as of June 27, 2008,
among THE RYLAND GROUP, INC., a Maryland corporation (the “Borrower”), the
Lenders that are identified on the signature pages hereto and JPMORGAN
CHASE BANK, N.A., as Agent (the “Agent”).

 

RECITALS

 

WHEREAS, the
Borrower, the Lenders identified on the signature pages hereto, certain
other Lenders and Agent are parties to that certain Credit Agreement dated as
of January 12, 2006 (as amended by First Amendment to Credit Agreement
dated as of October 17, 2007 and Second Amendment to Credit Agreement
dated as of February 15, 2008 and as it may be further amended, renewed
and restated from time to time, the “Credit Agreement”) (all capitalized terms
not defined herein shall have the meanings given such terms in the Credit
Agreement);

 

WHEREAS, the
Borrower and the Lenders desire to amend the Credit Agreement for the purposes
hereinafter set forth;

 

NOW,
THEREFORE, for good and valuable consideration, the parties hereto hereby agree
as follows:

 

1.                                       Definition
of “Leverage Ratio”.  The definition
of “Leverage Ratio” in Article 1 of the Credit Agreement is hereby amended
and restated in its entirety as follows:

 

“Leverage
Ratio” means, at any date, the ratio of (a) Consolidated Indebtedness at
such date, less Unrestricted Cash of the Borrower and Guarantors in excess of
$25,000,000 but not to exceed $300,000,000 to (b) the sum of Consolidated
Indebtedness and Consolidated Tangible Net Worth at such date, less
Unrestricted Cash of the Borrower and Guarantors in excess of $25,000,000 but
not to exceed $300,000,000.

 

2.                                       Reduction
of Aggregate Commitment.  Pursuant to
Section 2.5.2 of the Credit Agreement, the Aggregate Commitment is hereby reduced
from $750,000,000 to $550,000,000, allocated to each Lender’s Commitment
ratably.  The amounts of the reduced
Commitments of the Lenders are set forth in Schedule I hereto.

 

3.                                       Pricing.  The Pricing Schedule attached to the Credit
Agreement is hereby deleted and replaced by the Pricing Schedule attached
hereto, and the pricing set forth in Level III of the Pricing Schedule shall be
in effect as of the date of this Amendment.

 

4.                                       Consolidated
Tangible Net Worth.  Section 6.24
of the Credit Agreement is hereby amended and restated in its entirety as
follows:

 

                                                6.24                           Consolidated
Tangible Net Worth.  The Borrower
shall not permit Consolidated Tangible Net Worth at any time to be less than
the sum of (a) $600,000,000

 

 

plus (b) 50%
of the Consolidated Net Income (without deduction for losses sustained during
any fiscal quarter) for each fiscal quarter subsequent to the fiscal quarter
ended June 30, 2008, plus (c) 50%
of the net proceeds from any equity offerings of the Borrower from and after June 30,
2008.  Notwithstanding the foregoing, in
the event that the Borrower shall at any time engage in an Acquisition with a
purchase price (determined under GAAP) equaling or exceeding $100,000,000, the
minimum Consolidated Tangible Net Worth requirement shall be adjusted to the
sum of (i) 80% of Consolidated Tangible Net Worth at the end of the fiscal
quarter in which the closing of such Acquisition occurs, plus
(ii) an amount equal to 50% of the Consolidated Net Income (without
deduction for losses sustained in any fiscal quarter) for each fiscal quarter
subsequent to the closing of such Acquisition, plus
(iii) 50% of the net proceeds received by the Borrower for any capital
stock issued after the closing of such Acquisition.

 

5.                                       Leverage
Ratio.  Section 6.25 of the
Credit Agreement is hereby amended and restated in its entirety as follows:

 

6.25                           Leverage
Ratio.

 

(a)                                  Leverage
Covenant.  As of the last day of each
fiscal quarter of the Borrower (beginning with the fiscal quarter ending September 30,
2007), the Leverage Ratio shall be less than or equal to the then applicable
Permitted Leverage Ratio (the “Leverage Covenant”).

 

(b)                                 Interest
Coverage Test.  If at any time
Borrower shall fail to maintain, for two (2) consecutive fiscal quarters,
an Interest Coverage Ratio, determined as of the last day of each fiscal
quarter (each, a “Testing Date”) for the four-quarter period ending on such
Testing Date, of at least 2.0 to 1.0 (the “Interest Coverage Test”), then the
Permitted Leverage Ratio for the fiscal quarter next succeeding the second such
consecutive fiscal quarter with respect to which Borrower shall have so failed
the Interest Coverage Test (such second consecutive fiscal quarter being herein
referred to as the “Coverage Test Failure Quarter”) shall, subject to the
provisions of Section 6.25(d), be decreased by subtracting 2.5% from the
Permitted Leverage Ratio that was in effect on the Testing Date.  (By way of example, if the Permitted Leverage
Ratio for the Coverage Test Failure Quarter was 52.5%, the Permitted Leverage
Ratio for the next succeeding fiscal quarter shall be 50.0%.)  The decreased Permitted Leverage Ratio shall
remain in effect unless and until further decreased pursuant to this Section 6.25(b)
or increased pursuant to Section 6.25(c).

 

(c)                                  Adjustment
of Permitted Leverage Ratio.  If at
any time at which the Permitted Leverage Ratio is less than 57.5%, Borrower
shall have satisfied the Interest Coverage Test (which for purposes of this Section 6.25(c) shall
be deemed satisfied only if, on the same Testing Date on which Borrower
satisfies the Interest Coverage Test, Borrower is also in compliance with the
Leverage Covenant), then the Permitted Leverage Ratio, effective as of the
fiscal quarter immediately following the fiscal quarter with respect to which
Borrower shall have so satisfied the Interest Coverage Test, shall be increased
by adding 2.5% to the Permitted Leverage Ratio that was in effect on the
Testing Date.  (By

 

2

 

way of example, if the Permitted Leverage Ratio was 52.5% in the fiscal
quarter in which the Interest Coverage Test was satisfied, the Permitted
Leverage Ratio for the next fiscal quarter shall be 55.0%.)  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)                                 Limits
on Permitted Leverage Ratio. 
Notwithstanding anything to the contrary contained herein, in no event
shall the Permitted Leverage Ratio be less than the following amounts for the
following fiscal quarters:

 

	
  Permitted Leverage Ratio

  	
   

  	
  Fiscal Quarters

  
	
   

  	
   

  	
   

  
	
  55.0%

  	
   

  	
  The last
  fiscal quarter of 2008 and first fiscal quarter of 2009

  
	
   

  	
   

  	
   

  
	
  52.5%

  	
   

  	
  The second,
  third and fourth fiscal quarters of 2009

  
	
   

  	
   

  	
   

  
	
  50.0%

  	
   

  	
  The first
  fiscal quarter of 2010 and thereafter

  

 

(e)                                  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.

 

6.                                       Land
Inventory.  Section 6.29 is
hereby amended by deleting the reference “1.0 to 1.0” and replacing it with “1.15
to 1.0.”

 

7.                                       Compliance
Certificate.  The Compliance
Certificate provided for in the Credit Agreement shall be modified (as
applicable) to conform to the terms of this Amendment.

 

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 I.

 

(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.

 

3

 

(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.

 

4

 

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:

  	
  /s/ Gordon Milne

  	
   

  
	
   

  	
  Name:

  	
  Gordon Milne

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President and

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
						

 

5

 

	
   

  	
  Lenders:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  As Lender and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly Turner

  	
   

  
	
   

  	
  Name:

  	
  Kimberly Turner

  	
   

  
	
   

  	
  Its:

  	
  Executive Director

  	
   

  
						

 

6

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Eyal Namordi

  	
   

  
	
   

  	
  Name:

  	
  Eyal Namordi

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Timothy McNaught

  	
   

  
	
   

  	
  Name:

  	
   Timothy McNaught

  	
   

  
	
   

  	
  Title:

  	
   Managing Director

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ R. Scott Holtzapple

  	
   

  
	
   

  	
  Name:

  	
    R. Scott Holtzapple

  	
   

  
	
   

  	
  Title:

  	
   Director

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CITICORP NORTH AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Marni McManus

  	
   

  
	
   

  	
  Name:

  	
   Marni McManus

  	
   

  
	
   

  	
  Title:

  	
   Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Douglas Bernegger

  	
   

  
	
   

  	
  Name:

  	
   Douglas Bernegger

  	
   

  
	
   

  	
  Title:

  	
   Director

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  COUNTRYWIDE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Gregory W. Jackson

  	
   

  
	
   

  	
  Name:

  	
   Gregory W. Jackson

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  GUARANTY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ross Evans

  	
   

  
	
   

  	
  Name:

  	
   Ross Evans

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ W. John Wendler

  	
   

  
	
   

  	
  Name:

  	
   W. John Wendler

  	
   

  
	
   

  	
  Title:

  	
   Senior Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  WASHINGTON MUTUAL BANK, FA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Gary Handcox

  	
   

  
	
   

  	
  Name:

  	
   Gary Handcox

  	
   

  
	
   

  	
  Title:

  	
   Senior Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  REGIONS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Daniel McClurkin

  	
   

  
	
   

  	
  Name:

  	
   Daniel McClurkin

  	
   

  
	
   

  	
  Title:

  	
   Assistant Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Douglas G. Paul

  	
   

  
	
   

  	
  Name:

  	
   Douglas G. Paul

  	
   

  
	
   

  	
  Title:

  	
    Senior Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  UBS LOAN FINANCE LLC

  

 

 

	
   

  	
  By:

  	
    /s/ Irja R. Otsa

  	
   

  
	
   

  	
  Name:

  	
    Irja R. Otsa

  	
   

  
	
   

  	
  Title:

  	
    Associate Director

  	
   

  
						

 

	
   

  	
  By:

  	
    /s/ David B. Julie

  	
   

  
	
   

  	
  Name:

  	
    David B. Julie

  	
   

  
	
   

  	
  Title:

  	
    Associate Director

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  COMERICA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Leslie A. Vogel

  	
   

  
	
   

  	
  Name:

  	
   Leslie A. Vogel

  	
   

  
	
   

  	
  Title:

  	
   Vice President

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  NATIXIS

  
	
   

  	
   

  

 

	
   

  	
  By:

  	
    /s/ Natalie Trojan

  	
   

  
	
   

  	
  Name:

  	
   Natalie Trojan

  	
   

  
	
   

  	
  Title:

  	
    Director

  	
   

  
						

 

	
   

  	
  By:

  	
    /s/ Timothee Delpont

  	
   

  
	
   

  	
  Name:

  	
   Timothee Delpont

  	
   

  
	
   

  	
  Title:

  	
    Associate

  	
   

  
						

 

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CALYON NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
     /s/ Robert Smith

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
     Robert Smith

  	
   

  
	
   

  	
  Title:

  	
    Managing Director

  	
   

  
						

 

 

	
   

  	
  By: 

  	
     /s/ Brian Myers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
     Brian Myers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Managing Director

  	
   

  
							

 

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CITY NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
     /s/ Xavier Barrera

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
     Xavier Barrera

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice President

  	
   

  
							

 

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  THE GOVERNOR AND COMPANY OF

  THE BANK OF IRELAND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Emer Dalton

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
    Emer Dalton

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Authorized Signatory

  	
   

  
							

 

 

	
   

  	
  By: 

  	
     /s/ Elaine Crowley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
     Elaine Crowley

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Authorized Signatory

  	
   

  
							

 

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CHANG HWA COMMERCIAL BANK,

  
	
   

  	
  LTD., LOS ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

 

 SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  FIRST COMMERCIAL BANK,

  
	
   

  	
  LOS ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Rong-Ko Chen

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Rong-Ko Chen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Vice President and General Manager

  	
   

  
								

 

 

 

SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  MALAYAN BANKING BERHAD,

  
	
   

  	
  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
     /s/ Fauzi Zulkifli

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Fauzi Zulkifli

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   General Manager

  	
   

  
							

 

 

SCHEDULE I

 

COMMITMENTS

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $550,000,000.00

  	
   

  

 

 

PRICING SCHEDULE

 

 

	
   

  	
  Level I

  	
  Level II

  	
  Level III

  	
  Level IV

  	
  Level V

  
	
    Rating

  	
  BBB+/Baa1

  	
  BBB/Baa2

  	
  BBB-/Baa3

  	
  BB+/Bal

  	
  BB/Ba2 or

  below or no

  Rating

  
	
    Leverage Ratio

  	
  <
  30%

  	
  > 30% < 40%

  	
  > 40% < 50%

  	
  > 50% < 55%

  	
  > 55%

  
	
    Applicable Margin

  	
  1.125%

  	
  1.25%

  	
  1.375%

  	
  1.625%

  	
  2.00%

  
	
    Applicable Fee Rate

  	
  0.175%

  	
  0.20%

  	
  0.225%

  	
  0.25%

  	
  0.275%

  

 

“Rating”
means the higher of the publicly announced ratings of the Borrower’s senior
unsecured public debt by Moody’s and S&P. 
If only one of Moody’s or S&P announces a rating of the Borrower’s
senior unsecured public debt, no Rating shall be deemed to exist.

 

If
the Level as determined by the Rating is not the same as the Level as
determined by the Leverage Ratio, but no more than one Level apart, then the
Applicable Margin and the Applicable Fee Rate shall correspond to the Level
which causes pricing to be lower.  If the
Level as determined by the Rating is more than one Level different from the
Level as determined by the Leverage Ratio, then the Applicable Margin and the
Applicable Fee Rate shall be one Level lower (i.e., lower pricing) than the
higher of such two Levels.

 

Notwithstanding the
foregoing, at any time at which the Interest Coverage Ratio is less than 2.00
to 1.00, the Applicable Margin and Applicable Fee Rate determined as provided
above shall be increased based upon the Interest Coverage Ratio as follows:

 

	
    Interest Coverage Ratio

  	
    Less than 2.0 to 1.0 but

    greater than or equal to

    1.5 to 1.0 

  	
    Less than 1.5 to 1.0 but

    greater than or equal to

    1.0 to 1.0

  	
    Less than 1.0 to 1.0

  
	
   

  	
   

  	
   

  	
   

  
	
    Increase in Applicable

    Margin and Applicable Fee

    Rate

  	
    0.125%

  	
    0.25%

  	
    0.375%

  

 

The
Applicable Margin and Applicable Fee Rate shall be determined in accordance
with the foregoing table based on the Borrower’s status as reflected in the
then most recent Ratings and the then most recent annual or quarterly financial
statements of the Borrower delivered pursuant to Section 6.1(a) or (b) (the
“Financials”).  Adjustments, if any, to
the Applicable Margin or Applicable Fee Rate resulting from changes in the
Leverage Ratio or Interest Coverage Ratio shall be effective five Business Days
after the Agent has received the applicable Financials.  If the Borrower fails to deliver the Financials
to the Agent at the time required pursuant to Section 6.1, then the
Applicable Margin and Applicable Fee Rate shall be the highest Applicable
Margin and Applicable Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered. 
The Rating in effect on any date for the purposes of this Schedule is
that in effect at the close of business on such date.

 

 

In the event that any of the
Financials or any certificate delivered by Borrower under Section 6.2(b) is
shown to be inaccurate (regardless of whether this Agreement is in effect or
any Loans or Commitments are outstanding when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a
higher Applicable Margin and Applicable Fee Rate for any period (an “Applicable
Period”) than the Applicable Margin and Applicable Fee Rate actually applied
for such Applicable Period, then (i) the Borrower shall immediately
deliver to the Agent a correct certificate under Section 6.2(b) for such
Applicable Period, (ii) the Applicable Margin and Applicable Fee Rate
shall be determined at such higher Applicable Margin and Applicable Fee Rate
for such Applicable Period, and (iii) the Borrower shall immediately pay
to the Agent (for the benefit of the Lenders) the accrued additional interest
and additional fees owing as a result of such higher Applicable Margin and
Applicable Fee Rate for such Applicable Period.

 

In the event that any of the
Financials or any certificate delivered by Borrower under Section 6.2(b) is
shown to be inaccurate and such inaccuracy, if corrected, would have led to the
application of a lower Applicable Margin and Applicable Fee Rate for any
Applicable Period than the Applicable Margin and Applicable Fee Rate actually
applied for such Applicable Period, and provided such inaccuracy was not as a
result of any fraudulent act, then (i) the Borrower may, within 60 days of
its discovery of such inaccuracy (but in no event later than one (1) year
after delivery of the inaccurate Financials or certificate), deliver to the
Agent a correct certificate under Section 6.2(b) for such Applicable
Period and (ii) provided this Agreement is then in effect, Borrower may,
from time to time after timely delivery of such correct certificate, offset,
against payments of interest and fees thereafter payable under this Agreement
to any Lender that received payments of interest and fees for the Applicable
Period (“Overpayments”) in excess of the fees and interest that would have been
payable to such Lender if such payment had been made based upon the corrected
Financials and certificate, amounts not to exceed in the aggregate the
Overpayments received by such Lender. No Lender shall have any liability or
obligation with respect to any Overpayment received by any other Lender nor
shall any Lender have any liability or obligation with respect to any
Overpayment received by it other than Borrower’s right of offset hereunder.

 

 

Appendix I

 

CONSENT AND AGREEMENT OF GUARANTORS

 

THIS CONSENT AND
AGREEMENT OF GUARANTORS (“Consent”) is executed and delivered as of June        ,
2008, by the undersigned (the “Guarantors”), in favor of the “Lenders” under
that certain Credit Agreement dated January 12, 2006, among The Ryland
Group, Inc., the Lenders from time to time parties thereto and JPMorgan
Chase Bank, N.A., in its capacity as Agent. 
Such Credit Agreement, as it has been and may be amended, modified or
supplemented from time to time, is hereinafter referred to as the “Credit
Agreement.”  Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Guarantors
have executed and delivered a Guaranty dated January 12, 2006 in favor of
the Lenders under the Credit Agreement or a Supplemental Guaranty thereto
(collectively, the “Guaranty”); and

 

WHEREAS, the Borrower,
the Agent and certain Lenders have entered into that certain Third Amendment to
Credit Agreement of even date herewith amending the Credit Agreement (the “Amendment”);
and

 

WHEREAS, it is a
condition to the Amendment that the Guarantors shall have executed this
Consent;

 

NOW THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby consent to the Amendment and agree that the
Guaranty continues in full force and effect.

 

 

IN WITNESS WHEREOF, this
Consent has been duly executed by the Guarantors as of the day and year first
set forth above.

 

[Guarantors]

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