Document:

<PAGE>

                                                                   EXHIBIT 10.2

                             As of February 12, 2002

David C. Hayden
2510 Jackson Street

San Francisco, California 94115

Dear David:

         This letter agreement (the "Amendment") hereby supplements and amends
the terms and conditions of your employment agreement with Critical Path, Inc.,
a California corporation (the "Company") dated August 1, 2001 (the "Agreement")
and related performance loan and stock option documentation (collectively, the
"Agreements"). The purpose of this Amendment is to document changes to the
performance component of your employment, including the modifications to your
performance loan, in order to reflect the change in the focus of your job
responsibilities. Except as amended herein, the provisions contained in the
Agreements remain in effect. This Amendment has an effective date of February
12, 2002. Capitalized terms, unless otherwise defined herein, shall have the
meaning set forth in the Agreement.

         In consideration of the mutual covenants and promises made in this
Amendment, you and the Company agree as follows:

1.       Amendments.

         (a) Performance Loan. On August 13, 2001, the Company loaned you
$1,500,000 (the "Prior Performance Loan"). Interest on the Prior Performance
Loan has accrued at the rate of 6.75% per annum through February 11, 2002 and
such interest is due and payable on August 13, 2002 (the "Accrued Interest"). As
of February 12, 2002, the Prior Performance Loan was amended and restated in its
entirety and replaced with a new performance loan (the "Performance Loan") as
evidenced by this Amendment and the Amended and Restated Promissory Note that is
attached hereto as Exhibit A. The Performance Loan has an increased total loan
principal amount of $1,950,000, plus Accrued Interest, and is a full recourse
loan with a stated term that ends on August 13, 2004 except as otherwise
provided in the Amended and Restated Promissory Note. Beginning on February 12,
2002, the date that the additional loan amount of $450,000 from the Company was
provided to you, the Performance Loan will accrue at the rate of 6.75% per year
and interest is due and payable on August 13th of each year commencing on August
13, 2002.

         As security for the timely performance of your obligations under this
Amendment and the Amended and Restated Promissory Note, you hereby pledge and
grant to the Company a first priority perfected security interest in all of your
right, title and interest, whether now owned or hereafter acquired, in and to
(i) your stock options to purchase Company shares, (ii) the shares of the
Company's common stock acquired pursuant to such option exercises and (iii) the
proceeds thereof. Such common shares shall be held by the Company as secured
party until full repayment of all principal and interest arising under the
Performance Loan. You further acknowledge and agree that the common shares
underlying such stock options are subject to the

<PAGE>

security interest granted under this paragraph. The Company shall have the right
at any time to either (a) effectuate a cashless exercise/same day sale of such
options (provided that the then-fair market value of a Company common share is
greater than the per share exercise price of your options) with the sales
proceeds of such shares being first applied to satisfy required tax withholding
and to repay the Performance Loan or (b) cancel your stock options and apply the
difference between the then-fair market value of the underlying shares and the
aggregate option exercise price to satisfy required tax withholding and to repay
the Performance Loan. You hereby grant the Company an irrevocable Power of
Attorney, by executing the Power of Attorney form attached hereto as Exhibit B,
to effectuate the foregoing.

         In the event that you fail to perform any term of the Amendment or fail
to make any payment when due under the Performance Loan Note, the Company shall
have all of the rights and remedies of a creditor and secured party at law and
in equity, including (without limitation) the rights and remedies provided under
the Uniform Commercial Code. You hereby agree that any disposition of any or all
of the common shares you acquired by way of a private placement or other method
which in the opinion of the Company is required or advisable under Federal and
state securities laws is commercially reasonable. At any public sale, the
Company may (if it is the highest bidder) purchase all or any part of the common
shares at such price as the Company deems proper. Out of the proceeds of any
sale, the Company may retain an amount sufficient to pay all amounts then due
under the Note, together with the expenses of the sale and reasonable attorneys'
fees. The Company shall pay the balance of such proceeds, if any, to you. You
shall be liable for any deficiency that remains after the Company has exercised
its rights under this Amendment. You also agree to execute any documents
necessary for the Company to perfect its security interest.

         (b) Performance Loan Forgiveness. Provided that you are employed by the
Company on the date the negotiations or communications began (as determined by
the Company's Board of Directors in good faith) which lead to a Change in
Control of the Company and in which the Change in Control consideration received
by Company common shareholders is at least $10.00 per share (with such share
price adjusted for any future stock splits, stock dividends, recapitalization,
or similar events) (a "Corporate Transaction") and provided further that the
Compensation Committee certifies in writing that the Corporate Transaction has
been successfully achieved, the outstanding amount of principal (up to
$1,950,000) of your Performance Loan shall be forgiven ("Performance Loan
Forgiveness"). You must however timely and fully satisfy the withholding
obligations on the Performance Loan Forgiveness by paying to the Company the
required withholding amount in cash. To the extent that you do not satisfy the
withholding requirements on the Performance Loan Forgiveness, then the amount of
actual Performance Loan Forgiveness shall be reduced by such unsatisfied
withholding amount and the amount of such reduction shall instead be treated as
a cash bonus ("Withholding Bonus"). The Withholding Bonus, however, shall be
immediately applied to satisfy the required withholding on the sum of the
reduced Performance Loan Forgiveness amount and the Withholding Bonus. Purely
for illustrating how this Performance Loan Forgiveness reduction provision
operates, if there was a Corporate Transaction in which you were eligible to
receive Performance Loan Forgiveness and if the required withholding amount on
$1,950,000 of Performance Loan Forgiveness is $450,000 and if you did not timely
satisfy this withholding amount, then the actual amount of Performance Loan
Forgiveness would be reduced to $1,500,000 and the Withholding Bonus amount
would be $450,000 and such Withholding Bonus would be immediately applied by the
Company to satisfy the total withholding obligation. Any

<PAGE>

unpaid principal and interest on the Performance Loan remains a full recourse
obligation for you and may be repaid by you during or at the end of the
Performance Loan term. Any contrary provisions in the Agreement, including but
not limited to the change of control loan forgiveness provision are superseded
by this Amendment.

         (c) Cash Bonuses and Change in Control. The Cash Performance Bonus and
Change in Control loan forgiveness provisions previously provided for in your
Agreement are hereby replaced by the Performance Loan Forgiveness provision in
Section 1(b) of this Amendment and such former provisions shall no longer be
applicable upon the execution of this Amendment.

         If the terms of this Amendment are acceptable to you, please execute
the enclosed copy of this letter and return it to the undersigned.

                                          Very truly yours,

                                          CRITICAL PATH, INC.

                                                /s/ Michael Zukerman
                                          By: _________________________________

                                          Its: ________________________________

AGREED TO AND ACCEPTED BY:

       /s/ David C. Hayden
____________________________________
           David C. Hayden

____________________________________
             Date Signed

<PAGE>

                                    EXHIBIT A

                                  FULL RECOURSE

                      AMENDED AND RESTATED PROMISSORY NOTE

$1,950,000                                            San Francisco, California
                                                        As of February 12, 2002

         For value received, the undersigned promises to pay Critical Path,
Inc., a California corporation (the "Company"), at its principal office the
principal sum of $1,950,000 with interest from the date hereof at a rate of
6.75% per annum, compounded annually, on the unpaid balance of such principal
sum. Such principal and interest shall be due and payable on August 13, 2004,
and interest shall be due and payable annually before August 13th of each year
until paid in full (and the interest due by August 13, 2002 shall include
interest that has accrued (through the date immediately before the date of this
Note) at the rate of 6.75% per annum on the $1,500,000 that the Company loaned
to the undersigned pursuant to the promissory note, dated August 13, 2001, by
and between the Company and the undersigned) (such promissory note, the
"Original Note"). Such due date of August 13, 2004 shall be extended by two
years if the undersigned's employment with the Company is terminated either
without Cause or for Good Reason (as defined in the undersigned's employment
agreement with the Company, dated August 1, 2001, as amended on February 12,
2002). Notwithstanding the foregoing, the Company may at any time in its sole
and absolute discretion upon written notice to the undersigned demand that all
or any portion of the amounts evidenced by this Note shall immediately become
due and payable whereupon such amounts shall be due and payable in full.

         If the undersigned's employment or directorship with the Company is
terminated for Cause prior to payment in full of this Note, this Note shall be
immediately due and payable. Principal and interest are payable in lawful money
of the United States of America. PRINCIPAL AMOUNTS DUE UNDER THIS NOTE MAY BE
PREPAID WITHOUT PENALTY.

         Should suit be commenced to collect any sums due under this Note, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The makers and endorsers have severally waived presentment for payment, protest,
notice of protest, and notice of nonpayment of this Note.

         This Note is a full recourse note secured by a first priority perfected
security interest in (i) the undersigned's stock options to purchase Company
common shares, (ii) the shares of Company common stock acquired pursuant to such
option exercises and (iii) the proceeds thereof. Such shares shall be held by
the Company as secured party until full repayment of all principal and interest
due under this Note, pursuant to an Amendment, of even date herewith, to the
undersigned's employment agreement, which is on file with the Secretary of the
Company. The undersigned agrees that the common shares underlying such stock
options are subject to the foregoing security interest. This Note amends and
restates in its entirety the Original Note.

                                                   /s/ David C. Hayden
                                                _______________________________
                                                       David C. Hayden

<PAGE>

                                    EXHIBIT B

                                POWER OF ATTORNEY

         This Power of Attorney is executed and delivered by David C. Hayden
("Grantor") to Critical Path, Inc., a California corporation (hereinafter
referred to as "Attorney"), under an amendment to Grantor's employment
agreement, dated February 12, 2002, and other related documents (the "Loan
Documents"). No person to whom this Power of Attorney is presented, as authority
for Attorney to take any action or actions contemplated hereby, shall be
required to inquire into or seek confirmation from Grantor as to the authority
of Attorney to take any action described below, or as to the existence of or
fulfillment of any condition to this Power of Attorney, which is intended to
grant to Attorney unconditionally the authority to take and perform the actions
contemplated herein, and Grantor irrevocable waives any right to commence any
suit or action, in law or equity, against any person or entity which acts in
reliance upon or acknowledges the authority granted under this Power of
Attorney. The Power of Attorney granted hereby is coupled with an interest, and
may not be revoked or canceled by Grantor without Attorney' s written consent.

         Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in its own name, from time to time in Attorney's discretion,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of the Loan Documents and, without limiting the generality of the
foregoing, Grantor hereby grants to Attorney the power and right, on behalf of
Grantor, without notice to or assent by Grantor, and at any time, to do the
following: (a) exercise any portion or all of Grantor's options (including any
options that may be awarded to Grantor in the future) to purchase shares of
Attorney's common stock and to hold, retire, collect, sell or dispose of the
shares (or the proceeds of such shares) acquired pursuant to such option
exercises to satisfy any liability Grantor may owe to Attorney (even if such
liability is not then currently due); (b) pay or discharge any taxes, liens,
security interests, or other encumbrances levied or placed on or threatened
against Grantor or its property; (c) defend any suit, action or proceeding
brought against Grantor if Grantor does not defend such suit, action or
proceeding or if Attorney believes that Grantor is not pursuing such defense in
a manner that will maximize the recovery to Attorney, and settle, compromise or
adjust any suit, action, or proceeding described above and, in connection
therewith, give such discharges or releases as Attorney may deem appropriate;
(d) file or prosecute any claim, litigation, suit or proceeding in any court of
competent jurisdiction or before any arbitrator, or take any other action
otherwise deemed appropriate by Attorney for the purpose of collecting any and
all such moneys due to Grantor whenever payable and to enforce any other right
in respect of Grantor's property; (e) communicate in its own name with any party
to any contract with regard to the assignment of the right, title and interest
of Grantor in and under the contracts and other matters relating thereto; (f) to
file such financing statements with respect to any security agreement, with or
without Grantor's signature, or to file a photocopy of any security agreement in
substitution for a financing statement, as Attorney may deem appropriate and to
execute in Grantor's name such financing statements and amendments thereto and
continuation statements which may require Grantor's signature; and (g) execute,
in connection with any sale provided for in any Loan Document, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
collateral and to otherwise direct such sale or resale, all as though Attorney
were the absolute owner of the property of Grantor for all purposes, and to do,
at Attorney's option and Grantor's expense, at any time or from time to time,
all acts and other things that Attorney reasonably deems necessary to

<PAGE>

perfect, preserve, or realize upon Grantor's property or assets and Attorney's
liens thereon, all as fully and effectively as Grantor might do. Grantor hereby
ratifies, to the extent permitted by law, all that said Attorney shall lawfully
do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor this
_____________ day of _____________________.

                                             "GRANTOR"

                                             DAVID C. HAYDEN

                                              /s/ David Hayden
                                             __________________________________<PAGE>
                                                                   EXHIBIT 10.4

                                 3/02 AMENDMENT
                              (THE NINTH AMENDMENT)

                           DATED AS OF MARCH 29, 2002
                                       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

         $35,000,000 (ORIGINALLY $100,000,000) REVOLVING CREDIT FACILITY

<PAGE>

                                      INDEX

<TABLE>
<S>                                                                  <C>
"3/02 AMENDMENT"......................................................1
"AGENT"...............................................................1
"BORROWER"............................................................1
"CHASE"...............................................................1
"COMPANIES"...........................................................1
"GUARANTOR"...........................................................1
"LENDERS".............................................................1
"LOAN AGREEMENT"......................................................1
"STATED TERMINATION DATE".............................................1
</TABLE>

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                        <C>
         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
</TABLE>

<PAGE>

                               3/02 AMENDMENT TO
                         REPURCHASE FINANCING AGREEMENT

                                    PREAMBLE

        THIS 3/02 AMENDMENT TO REPURCHASE FINANCING AGREEMENT (the "3/02
AMENDMENT") entered into as of March 29, 2002, among ASSOCIATES FUNDING, INC., a
Delaware corporation ("BORROWER"), RYLAND MORTGAGE COMPANY, an Ohio corporation
("GUARANTOR"), JPMORGAN CHASE BANK ("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
Chase, as currently the only lender party to the Loan Agreement (defined below)
to amend (for the ninth time) the Loan Agreement, recites and provides as
follows:

                                    RECITALS

        Borrower and Guarantor (the "COMPANIES") and 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 and
subsequently (by the 9/00 Amendment to Repurchase Financing Agreement dated as
of September 1, 2000) to increase it back up to $45 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 $35 MILLION AND (ii) EXTENDING THE STATED TERMINATION DATE TO MARCH 31,
2003. Accordingly, for valuable and acknowledged consideration, the parties to
this amendment agree as follows:

                                   AMENDMENTS

                          1. AMENDMENT OF SECTION 1.1.

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

                "3/02 AMENDMENT" means the 3/02 Amendment to Repurchase
        Financing Agreement dated as of March 29, 2002, executed by the parties
        hereto and amending this Agreement (for the ninth time).

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

                "STATED TERMINATION DATE" means March 31, 2003.

        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 9/00 Amendment
to Repurchase Financing Agreement dated September 1, 2000) is amended in its
entirety to henceforth read as does SCHEDULE 3/02-1.1(a) attached to this
amendment and hereby made a part hereof.
<PAGE>

                            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 13, 2001, an
unsigned copy of which is attached as EXHIBIT 3/02-1 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 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

                                       2
<PAGE>

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
<PAGE>

        EXECUTED as of the day and year first stated above.

ASSOCIATES FUNDING, INC.                     RYLAND MORTGAGE COMPANY

By: /s/ SUSAN M. CASS                        By: /s/ SUSAN M. CASS
    -------------------------------             -------------------------------
(Name) SUSAN M. CASS                         (Name) SUSAN M. CASS
      -----------------------------                ----------------------------
(Title) SR. VP & CFO                         (Title) SR. VP & CFO
       ----------------------------                 ---------------------------

JPMORGAN CHASE BANK, as Agent and as a Lender

By: /s/ CYNTHIA E. CRITES
    -------------------------------
(Name) CYNTHIA E. CRITES
      -----------------------------
(Title) VICE PRESIDENT
       ----------------------------

      Counterpart signature page to 3/02 Amendment to Repurchase Financing
        Agreement among Associates Funding, Inc., Ryland Mortgage Company
                             and JPMorgan Chase Bank

<PAGE>
                              SCHEDULE 3/02-1.1(a)

                             LENDERS AND COMMITMENTS

<TABLE>
<CAPTION>
================================================================================
             NAME OF LENDER                                        COMMITMENT
--------------------------------------------------------------------------------
<S>                                                               <C>
JPMorgan Chase Bank                                                $35,000,000
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
================================================================================
</TABLE>
<PAGE>
                                [JPMORGAN LOGO]

                            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
<PAGE>

Ms. Susan Cass
September 27, 2001
Page 3

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 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 Section 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

<PAGE>

Ms. Susan Cass
September 27, 2001
Page 4

        (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 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,
                                          [Original signed by
                                          Cynthia E. Crites]
                                          Vice President

Agreed:

RYLAND MORTGAGE COMPANY

By: [Original signed by Susan M. Cass]
    ------------------------------------------------------
Name: [Susan M. Cass]
      ----------------------------------------------------
Title: [Senior Vice President and Chief Financial Officer]
       ---------------------------------------------------
Date:  [September 27]                 , 2001
       ---------------------------------------------------

<PAGE>

                                    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.

<PAGE>

                                    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.

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