Document:

Exhibit 10.4

 

EXHIBIT 10.4

3/03 AMENDMENT

(the tenth amendment)

dated as of March 29, 2003

to

REPURCHASE FINANCING AGREEMENT

dated as of October 9, 1996

among

ASSOCIATES FUNDING, INC.

(“Borrower”)

RYLAND MORTGAGE COMPANY

(“Guarantor”)

JPMORGAN CHASE BANK

(“Chase”), as Agent (“Agent”)

and

CERTAIN LENDERS

$25,000,000 (originally $100,000,000) Revolving Credit Facility

 

 

INDEX

	 	 	 	 	 
	3/03 Amendment	 	 	
1	 
	Agent	 	 	
1	 
	Borrower	 	 	
1	 
	Companies	 	 	
1	 
	Guarantor	 	 	
1	 
	JPMorgan Chase	 	 	
1	 
	Lenders	 	 	
1	 
	Loan Agreement	 	 	
1	 
	Stated Termination Date	 	 	
1	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Preamble	 	 	
1	 
	Recitals	 	 	
1	 
	Amendments	 	 	
1	 
	1. Amendment of Section 1.1.	 	 	
1	 
	2. Conditions Precedent	 	 	
2	 
	3. Representations and Warranties	 	 	
2	 
	4. Ratification	 	 	
2	 
	5. Miscellaneous	 	 	
2	 

 

 

3/03 AMENDMENT TO

REPURCHASE FINANCING AGREEMENT

Preamble

     THIS 3/03 AMENDMENT TO REPURCHASE FINANCING AGREEMENT (the “3/03
Amendment”) entered into as of March 29, 2003, among ASSOCIATES FUNDING, INC.,
a Delaware corporation (“Borrower”), RYLAND MORTGAGE COMPANY, an Ohio
corporation (“Guarantor”), JPMORGAN CHASE BANK (“JPMorgan Chase”), a New York
banking corporation, formerly known as The Chase Manhattan Bank and successor
by merger to Chase Bank of Texas, National Association, a national banking
association formerly named Texas Commerce Bank National Association, as a
lender and as agent for the lenders from time to time party thereto (in that
capacity, the “Agent”), and JPMorgan Chase, as currently the only lender party
to the Loan Agreement (defined below) to amend (for the tenth time) the Loan
Agreement, recites and provides as follows:

Recitals

     Borrower and Guarantor (the “Companies”) and JPMorgan Chase, as Agent and
the only lender (the lenders thereunder being called the “Lenders”), are party
to the Repurchase Financing Agreement dated as of October 9, 1996 (as amended
through the date of this amendment, the “Loan Agreement”) providing for
revolving credit loans of (originally) up to $100 million of principal lent and
outstanding on any day during the term of the Loan Agreement, and previously
amended to, among other things, reduce such limit to $35 million, subsequently
(by the 9/00 Amendment to Repurchase Financing Agreement dated as of September
1, 2000) to increase it back up to $45 million and then (by the 3/02 Amendment
to Repurchase Financing Agreement dated as of March 29, 2002 to again reduce it
to $35 million. Terms defined in the Loan Agreement have the same meanings
when used, unless otherwise defined, in this amendment. This amendment is for
the purposes of (i) decreasing such limit to $25 million and (ii) extending the
Stated Termination Date to March 31, 2004. Accordingly, for valuable and
acknowledged consideration, the parties to this amendment agree as follows (in
the event of any conflict or inconsistency between these recitals and the
following agreements, the latter shall govern and control):

Amendments

1. Amendment of Section 1.1.

     Section 1.1 is amended by adding the following new definition, in
alphabetical order:

		
	 	     “3/03 Amendment” means the 3/03 Amendment to Repurchase
Financing Agreement dated as of March 29, 2003, executed by the
parties hereto and amending this Agreement (for the tenth time).

     Section 1.1 is further amended by amending the following definitions to
henceforth read as follows:

		
	 	     “Stated Termination Date” means March 31, 2004.

     And Schedule 1.1(a) (first referred to in the Loan Agreement in the
definition of “Commitment” in Section 1.1 and last updated by the 3/02
Amendment to Repurchase Financing Agreement dated as of March 29, 2002)
is amended in its entirety to

1

 

henceforth read as does Schedule 3/03-1.1(a) attached to this
amendment and hereby made a part hereof.

2. Conditions Precedent.

     The Companies agree to forthwith deliver to the Agent: (a) counterparts
of this amendment executed by all of the parties named below, (b) for any
officer of either Company signing below on behalf of that Company but not
included in certificates of incumbency for that Company delivered to the Agent
before this amendment, a certificate of the secretary or assistant secretary of
that Company about the due incumbency of that officer, and (c) if the Agent
reasonably requires, resolutions of the directors of any Company authorizing
this amendment certified as accurate and complete by the secretary or assistant
secretary of the appropriate Company. This amendment shall become effective as
of the effective date of this amendment upon execution of this amendment by the
Borrower and the Agent.

3. Representations and Warranties.

     The Companies jointly and severally represent and warrant to Agent and
Lenders that, as of the date of this amendment and on the date of its execution
(a) the representations and warranties in the Loan Papers are true and correct
in all material respects except to the extent that (i) a representation or
warranty speaks to a specific date or (ii) the facts on which a representation
or warranty is based have changed by transactions or conditions contemplated or
permitted by the Loan Papers, and (b) no Default or Potential Default exists.

4. Ratification.

     The Companies ratify and confirm (a) all provisions of the Loan Papers as
amended by this amendment and (b) that all guaranties, assurances and Liens
granted, conveyed, or assigned to Agent or Lenders under the Loan Papers —
including, but not limited to, the unconditional and irrevocable guaranty by
the Guarantor of (i) the prompt payment of the Obligation at maturity, by
acceleration or otherwise, and at all times after maturity in accordance with
the Loan Papers, and (ii) the prompt performance of and compliance with every
term, covenant, and condition of the Loan Papers when due, all as stated in
Section 4.1 of the Loan Agreement — as they may have been revised, extended,
and amended, continue to guarantee, assure and secure the full payment and
performance of the Obligation (including, without limitation, all amounts
evidenced now or in the future by any note delivered under this amendment).

     In addition and without limiting the generality of the foregoing (and
without establishing or implying any requirement for any future republication
or reconfirmation thereof, the parties agreeing that there is and shall be no
such requirement), Guarantor hereby specifically republishes and reconfirms its
letter agreement with the Lender dated September 27, 2001, an unsigned copy of
which is attached as Exhibit 3/03-1 hereto and hereby made a part hereof.

5. Miscellaneous.

     All references in the Loan Papers to the “Loan Agreement” are to the Loan
Agreement as heretofore amended and as amended by this amendment. This
amendment is a “Loan Paper” referred to in the Loan Agreement, and the
provisions relating to Loan Papers in the Loan Agreement are incorporated in
this amendment by reference. Except as specifically amended and modified in
this amendment, the Loan Agreement is unchanged and continues in full force and
effect. This amendment may be executed in any number of counterparts with the
same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same
instrument. This amendment binds and benefits the

2

 

Companies, Agent, Lenders and their respective successors and permitted
assigns. THIS AMENDMENT AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     The remainder of this page is intentionally blank; counterpart signature pages
follow.

3

 

     EXECUTED as of the day and year first stated above.

	 	 	 
	ASSOCIATES FUNDING, INC.	 	 RYLAND MORTGAGE COMPANY

	 	 	 	 	 	 	 
	By:

(Name)

(Title)	 	
/s/ Susan M. Cass

Susan M. Cass

Senior Vice President

and Chief Financial Officer
	 	By:

(Name)

(Title)
	 	/s/ Susan M. Cass

Susan M. Cass

Senior Vice President

and Chief Financial Officer

JPMORGAN CHASE BANK, as Agent and as a Lender

	 	 	 
	By:

(Name)

(Title)	 	
/s/ Cynthia E. Crites

Cynthia E. Crites

Senior Vice President

Counterpart signature page to 3/03 Amendment to Repurchase Financing Agreement among Associates Funding,

Inc., Ryland Mortgage Company and JPMorgan Chase Bank

 

 

SCHEDULE 3/03-1.1(a)

LENDERS AND COMMITMENTS

	 	 	 	 	 
	Name of Lender	 	Commitment
	
	 	

	JPMorgan Chase Bank
	 	$	25,000,000	 
	707 Travis, 6th Floor North

Houston, TX 77002

Attention: Cynthia E. Crites, Vice President

Fed Tax ID No. 13-4994650

Tel (713) 216-4425

Fax (713) 216-1567	 	 	 	 

 

 

EXHIBIT 3/03-1

THE CHASE MANHATTAN BANK

717 Travis, 6th Floor North

Houston, Texas 77002

September 27, 2001

Ryland Mortgage Company

6300 Canoga, 14th Floor

Woodland Hills, California 91367

Attention: Ms. Susan Cass, Chief Financial Officer

	
	Re:   Repurchase Financing Agreement dated as of October 9, 1996
(as heretofore amended eight times, the “Loan Agreement”) among
Associates Funding, Inc., Ryland Mortgage Company (“Ryland”) and
The Chase Manhattan Bank (successor by merger to Texas Commerce
Bank National Association which was renamed Chase Bank of Texas,
National Association before such merger)

Ladies and Gentlemen:

     1.     Negative Covenant. Section 8.3 of the Loan Agreement prohibits Ryland
from making any loan, advance, extension of credit or capital contribution to,
making any investment in, or purchasing or committing to purchase any stock or
other securities or evidences of Debt of, or interests in, any other Person
other than Permitted Loans/Investments, which are defined in the Loan Agreement
as those loans and investments that are listed on Schedule 8.3 to the Loan
Agreement, item 2 of which list of Permitted Loans/Investments is “Permitted
Loans and Investments of Guarantor under the Existing Loan Agreement,” which
are those loans and investments that are listed on Schedule 8.3 to the Restated
Credit Agreement dated June 16, 1995 between Ryland, as borrower, Bank One,
Texas, N.A., as Agent, and certain lenders, as amended (the “Existing Loan
Agreement”). This Bank and Ryland intend that Schedule 8.3 to the Loan
Agreement and Schedule 8.3 to the Existing Loan Agreement be read together to
determine what loans, advances, extensions of credit or capital advances are
permitted by the Loan Agreement (copies of both Schedule 8.3 to the Loan
Agreement and Schedule 8.3 to the Existing Loan Agreement are attached hereto,
as Exhibits 1 and 2, respectively, to facilitate that). Ryland has requested
that, for purposes of the Loan Agreement, this Bank agree that henceforth, in
determining whether Ryland is in compliance with item 10 of the Existing Loan
Agreement’s list of Permitted Loans and Investments, which reads substantially
as follows (modified as indicated by brackets to clarify its intended meaning
in the present context):

10.   Loans or advances by [Ryland] to Ryland Group in the
management of its cash so long as (a)(i) they are not made at a
time when (and do not cause) a Default, or any default by Ryland
Group exists, in respect of any of [Ryland’s] material debt, and
(ii) the total of those loans and advances never (without the
prior approval of [The Chase Manhattan Bank]) exceeds the lesser
of either 50% of [Ryland’s] Net Worth or $7,500,000 or (b) [they
are] otherwise approved by [The Chase Manhattan Bank]
in writing;

the short term payment obligations of Ryland Group to Ryland that result
from Countrywide’s making single payments on the last two business days
of a quarter to Ryland Group under Countrywide’s Early Purchase Program
of amounts that are owed by

 

 

Ms. Susan Cass

September 27, 2001

Page 3

Countrywide part to Ryland and part to Ryland Group, be disregarded in
determining the sum of loans or advances by Ryland to Ryland Group
outstanding from time to time (specifically, to test for compliance with
clause (a)(ii) of the above-quoted item 10.)

     Please sign and return a copy of this letter to this Bank to
confirm our agreements as stated in clauses (a) and (b) of the second
sentence of this Part 0 of this letter.

     2.     Financial Covenants. Section 9.3 of the Loan Agreement states that the
Guarantor (Ryland) must comply in all respects with the financial covenants
applicable to it as set forth in Section 9 of the Existing Loan Agreement, to
the same effect as if they were set forth in the Loan Agreement.

     Please sign and return a copy of this letter to this Bank also to
confirm that such provision remains applicable, even though the Existing
Loan Agreement has been terminated, and that the referenced financial
covenants with which Ryland continues to be obligated to comply pursuant
to Section 9.3 of the Loan Agreement are the following:

	•	 	Ryland’s Net Worth may not be less than $15 million at the end of
any quarter in Ryland’s fiscal year.
	 
	•	 	The ratio of Ryland’s Total Liabilities to Ryland’s Tangible Net
Worth may not exceed 13.5 to 1.0 at the end of any quarter in Ryland’s
fiscal year.
	 
	•	 	The sum of Ryland’s net income (excluding any recognized non-cash
income) or loss plus (to the extent deducted in calculating that net
income or loss) amortization, depreciation and other noncash charges (on
a consolidated basis) may never be less than $1.00 at the end of any of
Ryland’s fiscal quarters for the four fiscal quarter periods then ended.

As used above:

	•	 	“Net Worth” means, on a consolidated basis and at anytime, Ryland’s
stockholders’ equity reflected on its balance sheet.
	 
	•	 	“Total Liabilities” means, for Ryland, on a consolidated basis, and at
any time, all amounts that should be reflected as a liability on
Ryland’s balance sheet. The consolidated repurchase and consolidated
reverse repurchase obligations of Ryland and its affiliates under
Repurchase Agreements in connection with the sale of, and secured by,
Mortgage Securities, may be excluded from Total Liabilities.
	 
	•	 	“Mortgage Securities” means (a) participation certificates
representing undivided interests in first lien residential mortgage
loans purchased by the Federal Home Loan Mortgage Corporation under
the Emergency Home Finance Act of 1970, (b) modified pass through
mortgage backed certificates guaranteed by the Federal National
Mortgage Association under the National Housing Act, (c) modified pass
through mortgage backed certificates guaranteed by the Government
National Mortgage Association under § 306(g) of the National Housing
Act, or (d) any other security issued by an investor that was an
“Approved Investor” under the Existing Loan Agreement or that is
approved by The Chase Manhattan Bank, that is based on or backed by a
pool of mortgage loans providing for pass through payments of
principal and interest.
	 
	•	 	“Tangible Net Worth” means, on a consolidated basis, at any time, and
without duplication, the sum of (a) Ryland’s Net Worth plus (b)
Ryland’s long term debt if its maturity is no earlier than 30 days
after the Stated Termination Date, as defined in the Loan Agreement
and its payment is subordinated to payment of Ryland’s Obligation (as
defined in the Loan Agreement) in form and substance acceptable to The
Chase Manhattan Bank; minus (c) Ryland’s goodwill, including, without
limitation, any

 

 

Ms. Susan Cass

September 27, 2001

Page 4

	 	 
	 	amounts representing the excess of the purchase price for acquired
assets, stock or interests over the book value assigned to them minus
(d) Ryland’s patents, trademarks, service marks, trade names and
copyrights minus (e) Ryland’s other intangible
assets.
	 
	 	     Please call if you have any questions or comments.

	 	 	 
	 	 	
Very truly yours,
	 	 	 
	 	 	
/s/ Cynthia E. Crites

Cynthia E. Crites

Vice President

Agreed:

RYLAND MORTGAGE COMPANY

	 	 
	By:

Name:

Title:

Date:	
/s/ Susan M. Cass

Susan M. Cass

Senior Vice President and Chief Financial Officer

September 27, 2001

 

 

EXHIBIT 1

SCHEDULE 8.3

PERMITTED LOANS/INVESTMENTS

	1.	 	Mortgage-backed securities and related residual interests, acquired by
Borrower in the ordinary course of it business.
	 
	2.	 	Permitted Loans and Investments of Guarantor under the Existing Loan
Agreement.
	 
	3.	 	Mortgage Securities or other mortgage-backed securities issued by any
Subsidiary of Ryland Group that are acquired by Guarantor under its
exercise of call Rights with respect to them.
	 
	4.	 	(a) Investments having a maturity of one year or less in commercial paper
given the highest rating by a nationally recognized credit rating agency,
(b) the United States governmental obligations having maturities of one
year or less, and (c) certificates of deposit, bankers acceptances, and
repurchase agreements issued by a Lender or any other commercial bank that
has combined capital and surplus of at least Two Hundred Fifty Million
Dollars ($250,000,000) and a rating of C or better by Thompson Bank Watch,
Inc.
	 
	5.	 	Eurodollar investments with (a) any Lender or (b) any other financial
institution that has (i) combined capital, surplus, and undivided profits
of at least One Hundred Million Dollars ($100,000,000) and (ii) a Moody’s
Investors Service, Inc., or Standard & Poor’s Corporation commercial paper
rating of at least P-1 or A-1, respectively, or (iii) if it does not have
a commercial paper rating, a bond rating of at least A-1 or A-,
respectively.
	 
	6.	 	Extensions of trade credit and other payables in the ordinary course of
business.
	 
	7.	 	Acquisition of securities or evidences of Debt of others when acquired by
either Company in settlement of accounts receivable or other debts arising
in the ordinary course of business so long as the total of all of those
securities or evidences of debt is not material to the Companies’
financial condition taken as a whole.
	 
	8.	 	Loans or advances to officers or employees (a) of Guarantor or its
Subsidiaries for travel, entertainment, and relocation expense in the
ordinary course of business or (b) of either borrower or Guarantor that
are not in the ordinary course and are never more than a total of Five
Hundred Thousand Dollars ($500,000) outstanding for both Borrower and
Guarantor together.
	 
	9.	 	Loans or advances to Guarantor.

 

 

EXHIBIT 2

SCHEDULE 8.3 TO EXISTING LOAN AGREEMENT

PERMITTED LOANS/INVESTMENTS

	1.	 	Mortgage loans and mortgage-backed securities and related residual
interests, originated or acquired by Borrower in the ordinary course of it
business.
	 
	2.	 	Acquisition by Borrower of the stock or assets of any Person conducting a
mortgage-servicing business.
	 
	3.	 	Mortgage Securities or other mortgage-backed securities issued by any
Subsidiary of Borrower that are acquired by Borrower under its exercise of
call Rights with respect to them.
	 
	4.	 	Investments that (a) are made by Borrower in joint ventures with
homebuilders and realtors for the purpose of originating mortgage loans
and (b) never exceed a total of $5,000,000.
	 
	5.	 	(a) Investments having a maturity of one year or less in commercial paper
given the highest rating by a nationally recognized credit rating agency,
(b) United States governmental obligations having maturities of one year
or less, and (c) certificates of deposit, bankers acceptances, and
repurchase agreements issued by a Lender or any other commercial bank that
has combined capital and surplus of at least $250,000,000 and a rating of
C or better by Thompson Bank Watch, Inc.
	 
	6.	 	Eurodollar investments with (a) any Lender or (b) any other financial
institution that has (i) combined capital, surplus, and undivided profits
of at least $100,000,000 and (ii) a Moody’s Investors Service, Inc., or
Standard & Poor’s Corporation commercial-paper rating of at least P-1 or
A-1, respectively, or (iii) if it does not have a commercial-paper rating,
a bond rating of at least A-1 or A-, respectively.
	 
	7.	 	Extensions of trade credit and other payables in the ordinary course of
business.
	 
	8.	 	Acquisition of securities or evidences of Debt of others when acquired by
Borrower in settlement of accounts receivable or other debts arising in
the ordinary course of business so long as the total of all of those
securities or evidences of debt is not material to the Borrower’s
financial condition taken as a whole.
	 
	9.	 	Loans or advances to officers or employees (a) of Borrower or its
Subsidiaries for travel, entertainment, and relocation expense in the
ordinary course of business or (b) of Borrower that are not in the
ordinary course and are never more than a total of $500,000 outstanding
for Borrower.
	 
	10.	 	Loans or advances by Borrower to Ryland Group in the
management its cash so long as (a) (i) they are not made at a
time when (and do not cause) a Default or any default by Ryland
Group exists in respect of any of its material debt, and (ii)
the total of those loans and advances never (without the prior
written approval by Administrative Agent) exceeds the lesser of
either 50% of Borrower’s Net Worth or $7,500,000 or (b) is
otherwise approved by Administrative Agent in writing.

 

 

ASSOCIATES FUNDING, INC.

OFFICER’S CERTIFICATE

	 	 	 
	
LENDER:
	 	JPMorgan Chase Bank
	 	 	 
	
COMPANY:
	 	Associates Funding, Inc.
	 	 	 
	
DATE:
	 	March 29, 2003

This Certificate is delivered to the Lender under a Repurchase Financing
Agreement dated as of October 9, 1996, as amended by a First Amendment to
Repurchase Financing Agreement dated as of March 31, 1998 (the “3/98
Amendment”), a Second Amendment to Repurchase Financing Agreement dated as of
September 30, 1998 (the “9/98 Amendment”), a Third Amendment to Repurchase
Financing Agreement dated as of December 31, 1998 (the “12/98 Amendment”), a
Fourth Amendment to the Repurchase Financing Agreement dated as of March 31,
1999 (the “3/99 Amendment”), a Fifth Amendment to the Repurchase Financing
Agreement dated as of April 15, 1999 (the “4/99 Amendment”), a Sixth Amendment
to the Repurchase Financing Agreement dated as of March 31, 2000 (the “3/00
Amendment”), a Seventh Amendment to the Repurchase Financing Agreement dated as
of September 1, 2000 (the “9/00 Amendment”), a Eighth Amendment to the
Repurchase Financing Agreement dated as of March 30, 2001 (the “3/01
Amendment”), a Ninth Amendment to the Repurchase Financing Agreement dated as
of March 29, 2002 (the “3/02 Amendment”), and a Tenth Amendment to the
Repurchase Financing Agreement dated as of March 29, 2003 (the “3/03
Amendment”) (all documents collectively referred to as the “Repurchase
Financing Agreement”) between the Company, as Borrower, Ryland Mortgage
Company, as Guarantor, and the Lender, both as Agent and Lender. Unless they
are otherwise defined in the 3/03 Amendment, terms defined in the Repurchase
Financing Agreement have the same meanings here as there.

The undersigned Company officer certifies to the Lender that on the date of
this Certificate:

	 	1.	 	The undersigned is an incumbent officer of the Company
holding the title stated below the undersigned’s signature below.
	 
	 	2.	 	Attached hereto as Annex A is a true and complete copy of the
resolution of the Board of Directors of the Company authorizing the
negotiation and execution of the 3/03 Amendment. There have been no
amendments to the Certificate, Articles of Incorporation or Bylaws
of the Company since October 1, 1996.
	 
	 	3.	 	The Company officers authorized to execute and deliver the
3/03 Amendment are as follows:

	 	 	 	 	 
	NAME	 	
TITLE
	 	SIGNATURE
	
	 	
	 	

	 	 	 	 	 
	Daniel G. Schreiner	 	
President
	 	/s/ Daniel G. Schreiner
	 	 	 	 	

	Susan M. Cass	 	
Senior Vice President and CFO
	 	/s/ Susan M. Cass
	 	 	 	 	

	 	 	 	 	 
	 	 	 	 	 
	 	 	
ASSOCIATES FUNDING, INC.

a Delaware corporation
	 	 	 	 	 
	 	 	
By: 	/s/ Susan M. Cass
	 	 	 	

	 	 	 	 	Susan M. Cass
	 	 	 	
Its: 	Sr. Vice President and CFO

 

 

ANNEX A

ASSOCIATES FUNDING, INC.

CONSENT OF DIRECTORS

THE UNDERSIGNED, being all the directors of Associates Funding, Inc., a
Delaware corporation (the “Corporation”), hereby waive the calling and holding
of a meeting of directors, consent to the following action, and direct that
this consent be filed with the minutes of the proceedings of the Corporation:

	
	     RESOLVED, that the Corporation is hereby authorized to entered
into the Tenth Amendment to Repurchase Financing Agreement dated as
of March 29, 2003 (the “Tenth Amendment”), by and between Ryland
Mortgage Company as Guarantor, the Corporation as Borrower, and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank and
successor by merger to Chase Bank of Texas, National Association)
both as Agent and Lender, amending the Repurchase Financing Agreement
between the parties dated October 9, 1996, as amended by a First
Amendment to Repurchase Financing Agreement dated as of March 31,
1998, a Second Amendment to Repurchase Financing Agreement dated as
of September 30, 1998, a Third Amendment to Repurchase Financing
Agreement dated as of December 31, 1998, a Fourth Amendment to the
Repurchase Financing Agreement dated as of March 31, 1999, a Fifth
Amendment to the Repurchase Financing Agreement dated as of April 15,
1999, a Sixth Amendment to the Repurchase Financing Agreement dated
as of March 31, 2000, a Seventh Amendment to the Repurchase Financing
Agreement dated as of September 1, 2000, an Eighth Amendment to the
Repurchase Financing Agreement dated as of March 30, 2001, and a
Ninth Amendment to the Repurchase Financing Agreement dated as of
March 29, 2002 (the Repurchase Financing Agreement and Amendments,
collectively referred to as the “Repurchase Financing Agreement”),
for the purpose of extending the stated Termination Date to March 31,
2004, and confirming and continuing existing agreements between the
parties for accrual and payment of a facility fee, all as more
particularly set forth in the Tenth Amendment.
	 
	     RESOLVED, that officers of the Corporation be and are hereby
authorized, empowered and directed, in the name and on behalf of the
Corporation, to execute, deliver, record and file all agreements,
certificates, documents and other instruments and to take all action
as may be necessary or, in their judgment, desirable and proper in
order to renew and continue the Repurchase Financing Agreement, the
execution and delivery to be conclusive evidence of the approval of
the terms and conditions of such renewal and continuation of the
Repurchase Financing Agreement and the related agreements,
certificates, documents and other instruments, and all related
actions, by the Board of Directors and of the authority of the
officers to execute and deliver such agreements, certificates,
documents and instruments in the form executed and delivered.

DATED: March 29, 2003

	 	 	 
	 	 	
/s/ Susan M. Cass

Susan M. Cass
	 	 	 
	 	 	
/s/ Cathey S. Lowe

Cathey S. Lowe

 

 

RYLAND MORTGAGE COMPANY

OFFICER’S CERTIFICATE

	 	 	 
	
LENDER:
	 	JPMorgan Chase Bank
	 	 	 
	
COMPANY:
	 	Ryland Mortgage Company
	 	 	 
	
DATE:
	 	March 29, 2003

This Certificate is delivered to the Lender under a Repurchase Financing
Agreement dated as of October 9, 1996, as amended by a First Amendment to
Repurchase Financing Agreement dated as of March 31, 1998 (the “3/98
Amendment”), a Second Amendment to Repurchase Financing Agreement dated as of
September 30, 1998 (the “9/98 Amendment”), a Third Amendment to Repurchase
Financing Agreement dated as of December 31, 1998 (the “12/98 Amendment”), a
Fourth Amendment to the Repurchase Financing Agreement dated as of March 31,
1999 (the “3/99 Amendment”), a Fifth Amendment to the Repurchase Financing
Agreement dated as of April 15, 1999 (the “4/99 Amendment”), a Sixth Amendment
to the Repurchase Financing Agreement dated as of March 31, 2000 (the “3/00
Amendment”), a Seventh Amendment to the Repurchase Financing Agreement dated as
of September 1, 2000 (the “9/00 Amendment”), a Eighth Amendment to the
Repurchase Financing Agreement dated as of March 30, 2001 (the “3/01
Amendment”), a Ninth Amendment to the Repurchase Financing Agreement dated as
of March 29, 2002 (the “3/02 Amendment”), and a Tenth Amendment to the
Repurchase Financing Agreement dated as of March 29, 2003 (the “3/03
Amendment”) (all documents collectively referred to as the “Repurchase
Financing Agreement”) between Associates Funding, Inc., as Borrower, the
Company, as Guarantor, and the Lender, both as Agent and Lender. Unless they
are otherwise defined in the 3/03 Amendment, terms defined in the Repurchase
Financing Agreement have the same meanings here as there.

The undersigned Company officer certifies to the Lender that on the date of
this Certificate:

	 	1.	 	The undersigned is an incumbent officer of the Company
holding the title stated below the undersigned’s signature below.
	 
	 	2.	 	Attached hereto as Annex A is a true and complete copy of the
resolution of the Board of Directors of the Company authorizing the
negotiation and execution of the 3/03 Amendment. There have been no
amendments to the Certificate, Articles of Incorporation or Bylaws
of the Company since October 1, 1996, except as set forth in the
attached Annex B.
	 
	 	3.	 	The Company officers authorized to execute and deliver the
3/03 Amendment are as follows:

	 	 	 	 	 
	NAME	 	
TITLE
	 	SIGNATURE
	
	 	
	 	

	 
	Daniel G. Schreiner	 	
President
	 	/s/ Daniel G. Schreiner
	 	 	 	 	

	Susan M. Cass	 	
Senior Vice President and CFO
	 	/s/ Susan M. Cass
	 	 	 	 	

	 	 	 	 	 

	 	 	 	 	 
	 	 	 	 	 
	 	 	
RYLAND MORTGAGE COMPANY,

an Ohio corporation
	 	 	 	 	 
	 	 	
By: 	/s/ Susan M. Cass
	 	 	 	

	 	 	 	 	Susan M. Cass
	 	 	 	
Its: 	Sr. Vice President and CFO

 

 

ANNEX A

RYLAND MORTGAGE COMPANY

CONSENT OF DIRECTORS

THE UNDERSIGNED, being all the directors of Ryland Mortgage Company, an Ohio
corporation (the “Corporation”), hereby waive the calling and holding of a
meeting of directors, consent to the following action, and direct that this
consent be filed with the minutes of the proceedings of the Corporation:

	
	     RESOLVED, that the Corporation is hereby authorized to entered
into the Tenth Amendment to Repurchase Financing Agreement dated as
of March 29, 2003 (the “Tenth Amendment”), by and between the
Corporation as Guarantor, Associates Funding, Inc. as Borrower, and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank and
successor by merger to Chase Bank of Texas, National Association)
both as Agent and Lender, amending the Repurchase Financing Agreement
between the parties dated October 9, 1996, as amended by a First
Amendment to Repurchase Financing Agreement dated as of March 31,
1998, a Second Amendment to Repurchase Financing Agreement dated as
of September 30, 1998, a Third Amendment to Repurchase Financing
Agreement dated as of December 31, 1998, a Fourth Amendment to the
Repurchase Financing Agreement dated as of March 31, 1999, a Fifth
Amendment to the Repurchase Financing Agreement dated as of April 15,
1999, a Sixth Amendment to the Repurchase Financing Agreement dated
as of March 31, 2000, a Seventh Amendment to the Repurchase Financing
Agreement dated as of September 1, 2000, an Eighth Amendment to the
Repurchase Financing Agreement dated as of March 30, 2001, and a
Ninth Amendment to the Repurchase Financing Agreement dated as of
March 29, 2002 (the Repurchase Financing Agreement and Amendments,
collectively referred to as the “Repurchase Financing Agreement”),
for the purpose of extending the stated Termination Date to March 31,
2004, and confirming and continuing existing agreements between the
parties for accrual and payment of a facility fee, all as more
particularly set forth in the Tenth Amendment.
	 
	     RESOLVED, that officers of the Corporation be and are hereby
authorized, empowered and directed, in the name and on behalf of the
Corporation, to execute, deliver, record and file all agreements,
certificates, documents and other instruments and to take all action
as may be necessary or, in their judgment, desirable and proper in
order to renew and continue the Repurchase Financing Agreement, the
execution and delivery to be conclusive evidence of the approval of
the terms and conditions of such renewal and continuation of the
Repurchase Financing Agreement and the related agreements,
certificates, documents and other instruments, and all related
actions, by the Board of Directors and of the authority of the
officers to execute and deliver such agreements, certificates,
documents and instruments in the form executed and delivered.

DATED: March 29, 2003

	 	 	 
	 	 	/s/ Daniel G. Schreiner

Daniel G. Schreiner
	 	 	 
	 	 	
/s/ Timothy J. Geckle

Timothy J. GeckleExhibit 10.10

 

EXHIBIT 10.10

TRG INCENTIVE PLAN

(as amended and restated, effective January 1, 2003)

The Ryland Group, Inc. (the “Company”) has established the TRG Incentive Plan
(the “Plan”) to provide incentive compensation for those key employees whose
efforts may significantly affect the Company’s earnings and performance. The
Plan provides for the payment of cash awards as well as the issuance of Common
Stock of the Company and the crediting of Stock Units as awards under The
Ryland Group, Inc. 2002 Equity Incentive Plan, the terms of which are
incorporated herein by reference for all relevant purposes.

	1.	 	Definitions.
	 
	 	 	The terms below shall have the following meanings:

	 	(a)	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	(b)	 	“Cash Account” shall mean an account established for each
Participant to be credited with the cash portion of Performance
Awards. The Cash Account shall consist of separate sub-accounts for
amounts credited, if any, with respect to each Performance Year.
	 
	 	(c)	 	“Code” shall mean the Internal Revenue Code of 1986, as
amended from time-to-time and any successor to such Code.
	 
	 	(d)	 	“Committee” shall mean the Compensation Committee of the
Board or a subcommittee of the Compensation Committee composed of
two or more “outside directors” as defined in Code Section 162(m)
and the regulations thereunder.
	 
	 	(e)	 	“Common Stock” shall mean shares of Common Stock of the Company.
	 
	 	(f)	 	“Common Stock Account” shall mean an account established for
each Participant to be credited with the Stock Unit portion, if any,
of Performance Awards. The Common Stock Account shall consist of
separate sub-accounts for Stock Units credited, if any, with respect
to each Performance Year.
	 
	 	(g)	 	“Company” shall mean The Ryland Group, Inc., its
subsidiaries, partnerships and other related entities and
affiliates, except where the context applies solely to The Ryland
Group, Inc. as determined by the Committee.
	 
	 	(h)	 	“Employee” shall mean any person employed by the Company.
	 
	 	(i)	 	“Fair Market Value” shall mean a price or value for the
Common Stock of the Company, as determined by the Committee to be
the fair market value of the Common Stock, which can be the opening,
closing or other quoted price on the New York Stock Exchange or
other exchange on which the Common Stock is traded or the first,
last or other reported sales price if quoted on the NASDAQ National
Market System or other over-the-counter market.

1

 

	 	(j)	 	“Participant” shall mean an Employee selected to participate
in the Plan pursuant to Section 2.
	 
	 	(k)	 	“Performance Award” shall mean the amount of any award to a
Participant based on the Company’s achievement of the Performance
Goal(s) for a Performance Period.
	 
	 	(l)	 	“Performance Goal” shall mean the performance target selected
by the Committee to determine the amount of any Performance Award
under the Plan.
	 
	 	(m)	 	“Performance Period” shall mean the period as established
pursuant to Section 4 over which the Performance Goal(s) are
measured for the purpose of determining the extent to which a
Performance Award is earned.
	 
	 	(n)	 	“Performance Year” shall mean the final fiscal year of the
Company of the Performance Period over which Performance Goals are
measured for the purpose of determining the extent to which a
Performance Award is earned.
	 
	 	(o)	 	“Stock Unit” shall mean a unit representing one share of Common Stock.
	 
	 	(p)	 	“Vested Deferred Award” shall mean the portion of any
Deferred Award which is vested pursuant to the Plan, but which has
not been paid to the Participant.

	2.	 	Participants.
	 
	 	 	The Committee periodically determines those Employees who are eligible
and selected to participate in the Plan.
	 
	3.	 	Administration.
	 
	 	 	The Plan is administered by the Committee. The Committee shall establish
the Performance Goal(s) for each Performance Period, review the Company’s
actual performance results to assess the extent to which Performance
Goal(s) have been met and Performance Awards have been earned, approve
Performance Awards and make any other determinations, interpretations or
decisions required in connection with the Plan. The Committee shall have
the authority to amend, modify and interpret the Plan and make all
determinations relating to the Plan and the Participants. Decisions of
the Committee on all matters relating to the Plan are conclusive and
binding on all parties, including the Company and the Participants. No
member of the Committee is liable for any act done or determination made
in good faith in administering, construing or interpreting the Plan.
	 
	4.	 	Performance Awards.

	 	(a)	 	Establishment of Performance Awards. For each Performance
Year and/or Performance Period, the Committee shall determine and
set forth in writing not later than 90 days after the commencement
of the Performance Year:

	 	 	 
	 	(i)	
the Participants;

2

 

	 	 	 
	 	(ii)	
the target amount of and formula for determining Performance Awards;
	 	 	 
	 	(iii)	
the Performance Goal or Goals for determining Performance Awards;
	 	 	 
	 	(iv)	
whether the Performance Awards will be paid in
cash, Common Stock or Stock Units; and
	 	 	 
	 	(v)	
any other terms relating to Performance Awards under the Plan.

	 	 
	 	The Performance Goal or Goals shall be based upon the average return on
stockholders’ equity of the Company as set forth in the audited financial
statements for the Performance Year and the two fiscal years prior to the
Performance Year. The maximum Performance Award that may be earned by
any Participant for any Performance Year is $6,000,000. The Committee
may reduce or eliminate Performance Awards for any reason in its sole
discretion, but may not increase the amount of a Performance Award
payable to any Participant for a given Performance Period after the
Performance Goal for that period has been established.

	 	 

	 	(b)	 	Determination, Payment and Crediting of Performance Awards.

	 	 	 
	 	(i)	
Within 90 days after the end of each Performance
Year, the Committee shall determine and set forth in writing
the amount of any Performance Award earned by a Participant or
group of Participants.
	 	 	 
	 	(ii)	
One-third of each Performance Award (the “Initial
Payment”) shall vest as of January 1 of the Company’s first
fiscal year following the related Performance Year and shall
be payable within 90 days thereafter, but not earlier than the
Committee’s determination that such award was earned. As
determined by the Committee, either all or one-half of the
Initial Payment shall be paid in cash and either none or
one-half shall be paid in a whole number of shares of Common
Stock determined by dividing one-half of the Initial Payment
by the Fair Market Value of the Common Stock on the first
trading day of the Company’s first fiscal year following the
related Performance Year, provided that if a fractional number
of shares results, cash shall be paid in lieu of any
fractional share.
	 	 	 
	 	(iii)	
The remaining two-thirds of each Performance
Award (the “Deferred Award”) shall be credited to the
Participant’s Cash Account or, if applicable, to the
Participant’s Common Stock Account, effective as of January 1
of the Company’s first fiscal year following the related
Performance Year. As determined by the Committee, either all
or one-half of the Deferred Award shall be credited to the
Participant’s Cash Account and either none or one-half of the
Deferred Award shall be credited in the form of Stock Units to
the Participant’s Common Stock Account. For the purposes of
the foregoing, the number of Stock Units, if any, to be
credited to the Participant’s Common Stock Account shall be
equal to one-half of the Deferred Award earned divided by the
Fair Market Value of the Common Stock on the first trading day
of the Company’s first fiscal year following the related
Performance Year. If a fractional number of shares results
from the calculation of the Stock Units credited to a Common
Stock Account, cash will be credited to the Participant’s Cash
Account in lieu of any fractional shares.

3

 

	 	 	 
	 	(iv)	
No Performance Award(s) shall be earned or
credited for any Performance Year in which a Participant’s
termination of employment occurs.

	 	(c)	 	Rights in Respect of Stock Units. Stock Units shall not
represent an actual ownership interest in Common Stock and the
Participant shall have no voting or other rights as a stockholder in
respect of Stock Units including, except as provided in the next
sentence, any right to payment on account of dividends or
distributions in respect of the Common Stock represented thereby.
With respect to the total amount of any cash dividends paid annually
in respect of the Company’s Common Stock, Participants are entitled
to receive an annual cash payment in an amount equal to the annual
cumulative total of dividends declared and paid for any particular
calendar year (the “Dividend Determination Year”), to the extent of
any dividends not previously paid to or received by a Participant,
which the Participant would have received if the Stock Units
credited to the Participant’s Common Stock Account actually had
represented shares of Common Stock as of the record date (this
payment is referred to as the “Annual Payment”). The right to this
Annual Payment applies to the cumulative annual amount of cash
dividends paid on account of the Common Stock on any record date on
or after the end of a Performance Year related to the Stock Units
credited to the Participant’s Common Stock Account, to the extent of
any dividends not previously paid to or received by a Participant.
The Annual Payment shall be determined and paid within 45 days of
the later of October 15th or the third quarter record date for a
quarterly cash dividend payable during the Company’s fiscal year for
any applicable Dividend Determination Year.
	 
	 	(d)	 	Earnings on Cash Account. Earnings can be credited to a
Participant’s Cash Account on a basis, in a manner, and at the rate
established from time-to-time by the Committee that is reasonable
under Section 162(m) of the Internal Revenue Code.

	5.	 	Vesting and Payment of Deferred Awards.

	 	(a)	 	Vesting of Deferred Awards.

	 	 	 
	 	(i)	
The Deferred Award for a Performance Year will
vest in two equal installments on January 1 of each of the
Company’s second and third fiscal years following the related
Performance Year (the “Vesting Date”) provided the Participant
is employed by the Company on the Vesting Date.
	 	 	 
	 	(ii)	
Notwithstanding Section 5(a)(i), upon the death,
disability or retirement of a Participant, all amounts of
Deferred Awards shall become fully vested and be paid to the
Participant or the Participant’s beneficiary in accordance
with the terms of this Plan.
	 	 	 
	 	(iii)	
Upon a Participant’s voluntary termination of
employment with the Company, all Vested Deferred Awards shall
be paid to the Participant in accordance with the terms of
this Plan and any Deferred Awards which have not vested as of
the effective date of the Participant’s voluntary termination
of employment shall be forfeited.

4

 

	 	 	 
	 	(iv)	
Upon a Participant’s involuntary termination of
employment by the Company without cause, all Vested Deferred
Awards shall be paid to the Participant in accordance with the
terms of this Plan and any Deferred Awards which have not
vested as of the effective date of the Participant’s
involuntary termination of employment shall be forfeited.
	 	 	 
	 	(v)	
Upon a Participant’s termination of employment by
the Company “for cause,” the Participant forfeits all
Performance Awards, all Initial Payments that have not been
paid, and all unvested and Vested Deferred Awards credited to
the Participant’s Cash or Common Stock Accounts. A termination
“for cause” is a termination pursuant to a finding or
determination by the Company of theft, fraud, embezzlement or
any act which is detrimental or damaging to the business,
operation or reputation of the Company.

	 	(b)	 	Payment of Vested Deferred Awards. Vested Deferred Awards
shall be paid to a Participant within 90 days of the related Vesting
Date. Payments shall be made in cash to the extent the Vested
Deferred Award is credited to a Participant’s Cash Account and in a
number of shares of Common Stock equal to the Stock Units to the
extent the Vested Deferred Award is credited to the Participant’s
Common Stock Account. The Stock Units credited to a Participant’s
Common Stock Account in connection with a Vested Deferred Award can
be converted to and paid in cash, if determined by the Committee, in
the amount of the closing Fair Market Value of the shares of Common
Stock related to the Stock Units converted and paid in cash on the
first trading day of the Company’s fiscal year in which the
conversion or cash payment is made.

	6.	 	Dilution and Other Adjustments.
	 
	 	 	The Committee can, in its sole discretion, require an adjustment in the
Common Stock Accounts held by Participants in the event of any change in
the outstanding shares of Common Stock by reason of any stock dividend or
stock split, recapitalization, reclassification, merger, share exchange,
consolidation, combination or exchange of shares or other similar change.
	 
	7.	 	Change of Control.

	 	(a)	 	For purposes of this Plan, a Change of Control shall mean:

	 	 	 
	 	(i)	
The acquisition by any person, other than the
Company or any employee benefit plans of the Company, of
beneficial ownership of 20 percent or more of the combined
voting power of the Company’s then outstanding voting
securities;
	 	 	 
	 	(ii)	
The first purchase under a tender offer or
exchange offer, other than an offer by the Company or any
employee benefit plans of the Company, pursuant to which
shares of Common Stock have been purchased;
	 	 	 
	 	(iii)	
During any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election or
the nomination for the election by stockholders of the Company
of each new director

5

 

	 	 	 
	 	 	
was approved by a vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of the period; or
	 	 	 
	 	(iv)	
Approval by stockholders of the Company of a
merger, consolidation, liquidation or dissolution of the
Company, or the sale of all or substantially all of the assets
of the Company.

	 	(b)	 	Upon the occurrence of a Change of Control, all Deferred
Awards shall immediately vest and be paid to Participants within 14
days of the date on which the Change of Control occurs.

	8.	 	Miscellaneous.

	 	(a)	 	Tax Withholding. The Company shall have the right to deduct
from any payments made or benefits accrued under the Plan, any
Federal, state, or local taxes required by law to be withheld. In
the case of awards paid in Common Stock, a Participant may elect to
have any portion of any withholding taxes payable in respect of a
distribution of Common Stock satisfied through the retention by the
Company of shares of Common Stock having a Fair Market Value on the
date of withholding equal to the withholding amount, subject to
compliance with any requirements of applicable law and subject to
such other restrictions as the Company may impose.
	 
	 	(b)	 	Employment Rights. Neither the Plan nor any action taken
hereunder shall be construed as giving an Employee or Participant
any right to be retained in the employ of the Company nor shall any
action taken hereunder be construed as entitling the Company to the
services of any Employee or Participant for any period of time.
	 
	 	(c)	 	Beneficiaries. Each Participant shall have the right, at any
time, to designate a beneficiary or beneficiaries (both primary and
contingent) to whom payments under this Plan shall be made if the
Participant dies and amounts under this Plan are payable following
the Participant’s death. Any beneficiary designation shall be made
in writing and filed with the Company and shall become effective
only when received and accepted by the Company.

		
	 	A Participant may change his beneficiary designation by filing a new
designation with the Company. The filing of a new beneficiary
designation will cancel any and all beneficiary designations previously
filed.

		
	 	If a Participant fails to designate a beneficiary, or if all designated
beneficiaries predecease the Participant or die prior to complete
distribution of the Participant’s benefits, the payments under this Plan
shall be made to the Participant’s Estate.

	 	(d)	 	Nontransferability. A person’s rights and interest under
this Plan, including amounts payable, shall be solely the rights of
a general unsecured creditor of the Company and such rights may not
be assigned, pledged or transferred except to a designated
beneficiary as provided above.

6

 

	 	(e)	 	Governing Law. All matters relating to the Plan or to any
Performance Awards granted under the Plan shall be governed by the
laws of the State of Maryland.
	 
	 	(f)	 	Shareholder Approval. The Plan, as amended and restated
herein, shall be submitted to the Company’s stockholders for
approval in accordance with Code Section 162(m). After the Plan is
approved by the Company’s stockholders, this Plan may not be amended
or changed without stockholder approval if the amendment or change
would limit the deductibility of Performance Awards paid or
distributed pursuant to the Plan under Code Section 162(m).

	9.	 	Amendments.
	 
	 	 	Subject to Section 8(f) above. The Committee may, in their sole and
absolute discretion, amend, suspend or terminate the Plan or any portion
of the Plan at any time. The Committee may also, at any time, in their
sole and absolute discretion, amend, revise or modify the terms of a
Participant’s Performance Award(s) or any terms or conditions related to
a Participant’s Performance Award(s), including the terms and conditions
related to the vesting and payment of Performance Award(s), Initial
Payment(s) and any Deferred Awards, notwithstanding anything in this Plan
or in any Performance Award to the contrary.

7

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