Document:

EXHIBIT 4.2

 

FORM OF WARRANT

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS. 
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO PROUROCARE MEDICAL INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

WARRANT TO PURCHASE

COMMON STOCK

OF

PROUROCARE MEDICAL INC. 

VOID AFTER DECEMBER 31, 2012

 

This Warrant is issued to [                ],
or its registered assigns (“Holder”) by ProUroCare Medical Inc., a Nevada corporation (the “Company”),
on [Insert date], 2008(1) (the
“Warrant Issue Date”) for a purchase price of
$[      ] (the “Warrant Purchase Price”).  This Warrant is issued pursuant to the terms
of that certain Unit Purchase Agreement dated as of
                                  ,
2008 (the “Purchase Agreement”) in connection with the Company’s
issuance to the Holder of a Convertible Promissory Note dated as of the date hereof (the “Note”),
in the original principal amount of
$                    .  This Warrant is intended to be an investment
warrant and is not issued in consideration of any services.

 

1.     Purchase of Shares.  Subject to the terms and conditions hereinafter set
forth and set forth in the Purchase Agreement, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company (or at such
other place as the Company shall notify the holder hereof in writing), to
purchase from the Company up to
[                  ]
fully paid and nonassessable shares of Common Stock of the Company, as
constituted on the Warrant Issue Date (the “Common Stock”).  The number of shares of Common Stock issuable
pursuant to this Section 1 (the “Shares”) shall be subject to
adjustment pursuant to Section 8 hereof.

 

2.     Exercise Price. 
The purchase price
for the Shares shall be (a) equal to 50%  of the per share or other unit
price at which equity securities are sold in the Company’s Public Offering (as
defined below) or, (b) in the event that the Company fails to close the
Public Offering prior to [the eighteen-month anniversary of the date of the Purchase Agreement] (the “Conversion Date”), the per share purchase price for the Shares shall
be equal to 50% of the closing price of the
Common Stock on [the
eighteen-month anniversary of the date of the Purchase Agreement]. 
Such price is herein referred to as the “Exercise Price”.  For purposes of this Warrant, “Public
Offering” shall mean an underwritten public offering of equity securities
of the Company.

 

1 The date of the Purchase Agreement.

 

 

3.     Exercise Period.  This Warrant shall become exercisable, in whole or
in part, commencing upon the earlier of (i) the closing of the Public
Offering or (ii)  the Conversion Date, and it shall remain so exercisable
until 5:00 p.m., Minneapolis time, on December 31, 2012.

 

4.     Method of Exercise.  While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise,
in whole or in part, the purchase rights evidenced hereby.  Such exercise shall be effected by:

 

(a)   the surrender of the Warrant, together with a
duly executed copy of the form of Notice of Exercise attached hereto, to the
Secretary of the Company at its principal offices;

 

(b)   the payment to the Company of a cash amount
equal to the aggregate Exercise Price for the number of Shares being purchased;
and

 

(c)   the delivery of a subscription agreement, an
investment letter or similar document acceptable to the Company demonstrating
that the sale of Shares to be purchased is exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), and any
applicable state securities laws (unless a registration statement covering the
Shares being purchased shall have been declared effective by the Securities and
Exchange Commission).

 

5.     Certificates for Common
Stock.  Upon the exercise of the purchase rights evidenced
by this Warrant, one or more certificates for the number of Shares so purchased
shall be issued as soon as practicable thereafter, bearing the restrictive
legend set forth in Section 12 of this Warrant, and in any event within 30
days of the delivery of the subscription notice.

 

6.     Intentionally Omitted.

 

7.     Issuance of Shares.  The Company covenants that the Shares, when
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and
charges with respect to the issuance thereof.

 

8.     Adjustment of Exercise Price
and Number of Shares.  The number of and kind of
securities purchasable upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as follows:

 

(a)   Subdivisions, Combinations and Other
Issuances.  If the Company shall at
any time prior to the expiration of this Warrant subdivide its Common Stock, by
split-up or otherwise, or combine its Common Stock, or issue additional shares
of its Common Stock as a dividend with respect to any shares of its Common
Stock, the number of Shares issuable on the exercise of this Warrant shall
forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made to
the purchase price payable per share, but the aggregate purchase price payable
for the total number of Shares purchasable under this Warrant (as adjusted)
shall remain the same.  Any adjustment
under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.

 

 

2

 

(b)   Reclassification, Reorganization,
Consolidation, Merger and Other
Changes.  In case of any
reclassification, capital reorganization or change in the Common Stock of the
Company (other than as a result of a subdivision, combination, or stock
dividend provided for in Section 8(a) above), or consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of the Company’s
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for such Common Stock,  then, as a condition of such reclassification,
reorganization, change, consolidation, merger
or sale, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder, so that the Holder shall have the right at any time prior to the
expiration of this Warrant to purchase, at a total price equal to that payable
upon the exercise of this Warrant, the kind and amount of shares of stock and
other securities and property receivable in connection with such
reclassification, reorganization, change, consolidation, merger or sale by a holder of the
same number of shares of Common Stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization, change,
consolidation, merger or sale.  In any such case appropriate provisions shall
be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per share payable
hereunder, provided the aggregate purchase price shall remain the same.

 

(c)   Minimum Adjustment.  Notwithstanding anything herein to the
contrary, no adjustment under this Section 8 need be made to the Exercise
Price unless such adjustment would require an increase or decrease of at least
1% of the Exercise Price then in effect. 
Any lesser adjustment shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment, which, together with
any adjustment or adjustments so carried forward, shall amount to an increase
or decrease of at least 1% of such Exercise Price.  Any adjustment to the Exercise Price carried
forward and not theretofore made shall be made immediately prior to the
conversion of this Warrant pursuant thereto.

 

(d)   Other Adjustment. 
If the Company at any time or from time to time shall take any other
action, or if any other event occurs, affecting the shares of Common Stock or
its other equity interests, if any, other than an action described in this Section 8, then, and in each such case, the Exercise
Price shall be adjusted in such manner and at such time as the Board of
Directors of the Company in good faith determines to be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Holder).

 

(e)   Notice
of Adjustment.  When any
adjustment is required to be made in the number or kind of shares purchasable
upon exercise of the Warrant, or in the Exercise Price, the Company shall
promptly notify the Holder of such event and of the number of shares of Common
Stock or other securities or property thereafter purchasable upon exercise of
this Warrant setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

 

 

3

 

(f)    Effects of Reverse Stock Split.  Notwithstanding any of the foregoing, the
Exercise Price shall not be adjusted under this Section 8 for the Company’s
Reverse Stock Split.  For purposes of
this Warrant, “Reverse Stock Split” shall mean the ten-for-one reverse split of the
Company’s Common Stock effective prior to the effectiveness of a Public Offering.  For example, after the Reverse
Stock Split, the per share purchase price for the Shares shall be 50%  of the per share or other unit price at which equity securities are
sold by the Company in a Public Offering  or, in the event that the Company fails to close the
Public Offering prior to the Conversion Date, the per share purchase price for the Shares shall
be equal to 50%  of
the closing price of the Common Stock on [the eighteen-month  anniversary of the date of
the Purchase Agreement].

 

9.     No Fractional Shares or
Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in
lieu of such fractional shares the Company shall make a cash payment therefore
on the basis of the Exercise Price then in effect.

 

10.  No Stockholder Rights.  Prior to exercise of this Warrant, the Holder shall
not be entitled to any rights of a stockholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive dividends
or other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company.  However, nothing in this Section 10
shall limit the right of the Holder to be provided the Notices required under
this Warrant or the Purchase Agreement.

 

11.  Exchange of Warrant.  This Warrant is exchangeable, without expense, at
the option of the Holder, upon presentation and surrender hereof to the Company
for other Warrants of different denominations entitling the Holder thereof to
purchase in the aggregate the same number of Warrant Shares purchasable
hereunder on the same terms and conditions as herein set forth.

 

12.  Application of Restrictions on Transfer.

 

(a)   Transferability.  No
transfer of this Warrant may be completed unless and until (i) the Company
has received an opinion of counsel for the Company that such securities may be
sold pursuant to an exemption from registration under the Securities Act, or (ii) a
registration statement relating to this warrant has been filed by the Company
and declared effective by the Commission. 
Subject to the foregoing, this Warrant and all rights hereunder are
transferable, in whole or in part, at the principal office of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
properly endorsed to any person or entity who represents in writing that
he/she/it is acquiring the warrant for investment and without any view to the
sale or other distribution thereof.  Each
Holder of this Warrant, by taking or holding the same, consents and agrees that
the bearer of this Warrant, when endorsed, may be treated by the Company and
all other persons dealing with this warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant or perform the obligations required hereby, or to the transfer hereof
on the books of the Company, any notice to the contrary notwithstanding; but
until such transfer on such books, the Company may treat the registered owner
hereof as the owner for all purposes.

 

 

4

 

(b)   Restrictive Legend.  Each certificate for shares issued upon the
exercise of the rights represented by this Warrant shall bear a legend as
follows unless, in the opinion of counsel to the Company, such legend is not
required in order to ensure compliance with the Securities Act:

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, AND IN RELIANCE UPON
THE HOLDER’S REPRESENTATION THAT SUCH SECURITIES WERE BEING ACQUIRED FOR
INVESTMENT AND NOT FOR RESALE.  NO
TRANSFER OF THE SECURITIES MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS (i) SUCH
TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR (ii) THE
HOLDER SHALL HAVE PROVIDED THE COMPANY WITH AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO SUCH REGISTRATION IS REQUIRED.”

 

13.  Successors and Assigns.  The terms and provisions of this Warrant and the
Purchase Agreement shall inure to the benefit of, and be binding upon, the
Company and the Holders hereof and their respective successors and assigns.

 

14.  Loss or Mutilation of
Warrant.  Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction, or mutilation of this Warrant, and (in
the case of loss, theft or destruction) or reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor and
date and any such lost, stolen or destroyed Warrant shall thereupon
become void.  Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen,
destroyed, or mutilated shall be at any time enforceable by anyone.

 

15.  Amendments and Waivers.  Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of warrants representing a
majority of the shares then issuable pursuant to the exercise of Warrants
issued pursuant to the Purchase Agreement (the “Majority Purchasers”); provided,
however, that no amendment, change or modification respecting this
Warrant may be made by the Majority Purchasers without the consent of the
Holder unless a comparable amendment, change or modification is made respecting
all of the Warrants issued pursuant to the Purchase Agreement.  Any waiver or amendment effected in
accordance with this Section 15 shall be binding upon each holder of a
Warrant purchased under the Purchase Agreement, each future holder of all such
Warrants and the Company.

 

 

5

 

16.  Effect of Amendment or
Waiver.  The Holder acknowledges that by operation of Section 15
hereof, the holders of warrants representing a majority of the shares then
issuable pursuant to the exercise of Warrants issued pursuant to the Purchase
Agreement will have the right and power to diminish or eliminate all rights of
such holder under this Warrant or under the Purchase Agreement.

 

17.  Notices.  All notices required under this Warrant shall be
deemed to have been given or made for all purposes (i) upon personal
delivery, (ii) upon confirmation receipt that the communication was
successfully sent to the applicable number if sent by facsimile; (iii) one
day after being sent, when sent by professional overnight courier service, or (iv) five
days after posting when sent by registered or certified mail.  Notices to the Company shall be sent to
ProUroCare Medical Inc., 5500 Wayzata Blvd., Suite 310, Golden Valley, MN,
55416 (or at such other place as the Company shall notify the Holder hereof in
writing).  Notices to the Holder shall be
sent to the address of the Holder on the books of the Company (or at such other
place as the Holder shall notify the Company hereof in writing).

 

18.  Attorneys’ Fees.  If any action of law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys’ fees, costs and disbursements in addition
to any other relief to which it may be entitled.

 

19.  Captions.  The section and subsection headings of this Warrant
are inserted for convenience only and shall not constitute a part of this
Warrant in construing or interpreting any provision hereof.

 

20.           Governing Law.  This
Warrant shall be governed by the laws of the State of Minnesota as applied to
agreements among Minnesota residents made and to be performed entirely within
the State of Minnesota.

 

IN
WITNESS WHEREOF, ProUroCare
Medical Inc. caused this Warrant to be executed by an officer thereunto
duly authorized.

 

	
   

  	
  PROUROCARE MEDICAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

 

6

 

WARRANT ASSIGNMENT

 

(to be signed only upon transfer of this warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
                                                                        
the right represented by the within Warrant to purchase, from ProUroCare Medical Inc., a Nevada corporation
(the “Company”), shares of the Common Stock of the Company, to which the
within Warrant relates and appoints
                                                              
attorney to transfer said right on the books of ProUroCare Medical Inc., with full power of substitution in the
premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security or
  other Tax Identification No.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please print present
  name and address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  

 

 

7

 

NOTICE OF EXERCISE

 

To:                              ProUroCare Medical Inc.

 

The undersigned hereby elects to purchase
                              
shares of Common Stock of ProUroCare Medical Inc., pursuant to
the terms of the attached Warrant and payment of the Exercise Price per share
required under such Warrant accompanies this notice.

 

The undersigned
hereby represents and warrants that the undersigned is acquiring such shares
for its own account for investment purposes only, and not for resale or with a
view to distribution of such shares or any part thereof.

 

	
   

  	
  Name of Warrant
  Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name in which shares should be registered:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

 

8Exhibit 10.1

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

This SECOND AMENDMENT TO CREDIT AGREEMENT (“Amendment”),
dated as of February 15, 2008, among THE RYLAND GROUP, INC., a Maryland
corporation (the “Borrower”), the Lenders that are identified on the signature pages hereto
and JPMORGAN CHASE BANK, N.A., as Agent (the “Agent”).

 

RECITALS

 

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

 

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

 

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

 

1.                                       Amendment
of Article 1.

 

(a)         The following defined terms in Article 1
of the Credit Agreement are hereby amended and restated as follows:

 

                “Borrowing
Base” means, except as set forth below, an amount equal to the sum of the
following Unrestricted Cash owned by the Borrower or any Guarantor,
Unencumbered Real Estate Inventory owned by the Borrower or any Guarantor and
Home Proceeds Receivable owned by the Borrower or any Guarantor:

 

(a)           100% of the Unrestricted Cash of the
Borrower and the Guarantors in excess of $25,000,000 but not to exceed
$300,000,000; plus

 

(b)           90%
of the amount of Home Proceeds Receivable; plus

 

(c)           90%
of the book value of Sold Construction in Progress and Sold Completed Units; plus

 

(d)           80%
of the book value of Unsold Construction in Progress and Unsold Completed
Units; plus

 

(e)           70%
of the book value of Finished Lots; plus

 

(f)            50%
of the book value of the Land Under Development; plus

 

(g)           25%
of the book value of the Raw Land – Entitled;

 

 

provided,
however, that the amount set forth in clause (g) shall not exceed
10% of the Borrowing Base; and provided  further that the sum of
the amounts set forth in clauses (e), (f) and (g) shall not exceed
40% of the Borrowing Base.

 

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

 

“Material Indebtedness” means Indebtedness in
an outstanding principal amount of $20,000,000 or more in the aggregate.

 

“Material Indebtedness Agreement” means any
agreement to which the Borrower or any Guarantor is a party (or is otherwise
obligated in respect thereof) under which any Indebtedness was created or is
governed, which Indebtedness has an outstanding principal balance of
$20,000,000 or more or which provides for the incurrence of Indebtedness on a
revolving basis in an amount which would constitute Material Indebtedness
(whether or not an amount of Indebtedness constituting Material Indebtedness is
outstanding thereunder).

 

(b)        The following defined
term is hereby added to Article 1 of the Credit Agreement:

 

“Unrestricted
Cash” means cash and Cash Equivalents of the Borrower and the Guarantors that
are free and clear of all Liens and not subject to any restrictions on the use
thereof to pay Indebtedness and other obligations of the Borrower and
Guarantors.

 

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

 

6.24         Consolidated Tangible Net Worth.  The Borrower shall not permit Consolidated
Tangible Net Worth at any time to be less than the sum of (a) $850,000,000 plus (b) 50% of the Consolidated Net Income (without
deduction for losses sustained during any fiscal quarter) for each fiscal
quarter subsequent to the fiscal quarter ended 
December 31, 2007, plus (c) 50%
of the net proceeds from any equity offerings of the Borrower from and after December 31,
2007.  Notwithstanding the foregoing, in
the event that the Borrower shall at any time engage in an Acquisition with a
purchase price (determined under GAAP) equaling or exceeding $100,000,000, the
minimum Consolidated Tangible Net Worth requirement shall be adjusted to the
sum of (i) 80% of Consolidated Tangible Net Worth at the end of the fiscal
quarter in which the closing of such Acquisition occurs, plus
(ii) an amount equal to 50% of the Consolidated Net Income (without
deduction for losses sustained in any fiscal quarter) for each fiscal quarter
subsequent to the closing of such Acquisition, plus
(iii) 50% of the net proceeds received by the Borrower for any capital
stock issued after the closing of such Acquisition.

 

3.             Borrowing
Base and Compliance Certificates. 
The form of Borrowing Base Certificate attached as Exhibit A
to the Credit Agreement is replaced by Exhibit A attached

 

2

 

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

 

4.             Conditions
Precedent.  This Amendment shall be
effective as of the date (“Amendment Effective Date”) upon which the following
conditions are satisfied:

 

(a)         The Agent shall have received from the
Borrower and the Required Lenders a counterpart of this Amendment signed on
behalf of each such party.

 

(b)        The Agent shall have received from the
Guarantors the Consent and Agreement substantially in the form attached hereto
as Appendix I.

 

(c)         The Agent shall have
received such documents and certificates as the Agent or its counsel may
reasonably request relating to the organization or formation, existence and
good standing of the Borrower, the authorization of this Amendment and any
other legal matters relating to the Borrower, the Agreement or this Amendment,
all in form and substance satisfactory to the Agent and its counsel.

 

(d)        The Agent shall have
received all fees and other amounts due and payable on or prior to the
Amendment Effective Date, including reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

 

The Agent shall notify the Borrower and the Lenders of the Amendment
Effective Date, and such notice shall be conclusive and binding.

 

5.             Representations
and Warranties.  The Borrower hereby
represents and warrants that as of the date hereof:

 

(a)           The representations and warranties of
the Borrower in the Credit Agreement are true and correct in all material
respects.

 

(b)           There exists no Default or Unmatured
Default.

 

6.             Ratification.  The Credit Agreement, as amended hereby, is
hereby ratified and remains in full force and effect.

 

7.             Counterparts.  This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement and
any of the parties hereto may execute this Amendment by signing any such
counterpart.

 

8.             Choice
of Law.  This Agreement shall be
construed in accordance with the internal laws (but without regard to the
conflict of laws provisions) of the State of New York, but giving effect to
federal laws applicable to national banks.

 

3

 

IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have
caused this Amendment to be duly executed as of the date first above written.

 

 

	
   

  	
  Borrower:

  
	
   

  
	
   

  	
  THE RYLAND GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gordon Milne

  	
   

  
	
   

  	
  Name:

  	
  Gordon Milne

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lenders:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  As Lender and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly I. Turner

  	
   

  
	
   

  	
  Name:

  	
  Kimberly I. Turner

  	
   

  
	
   

  	
  Its:

  	
  Executive Director

  	
   

  
									

 

4

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eyal Namordi

  
	
   

  	
  Name:

  	
  Eyal Namordi

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CITICORP NORTH AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marni McManus

  
	
   

  	
  Name:

  	
  Marni McManus

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nicholas A. Bell

  
	
   

  	
  Name:

  	
  Nicholas A. Bell

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  COUNTRYWIDE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas A. Dixon

  
	
   

  	
  Name:

  	
  Douglas A. Dixon

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  GUARANTY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ross Evans

  
	
   

  	
  Name:

  	
  Ross Evans

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. John Wendler

  
	
   

  	
  Name:

  	
  W. John Wendler

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

	
   

  	
  WASHINGTON MUTUAL BANK, FA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

	
   

  	
  REGIONS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronny Hudspeth

  
	
   

  	
  Name:

  	
  Ronny Hudspeth

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas G. Paul

  
	
   

  	
  Name:

  	
  Douglas G. Paul

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

	
   

  	
  UBS LOAN FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
  Name:

  	
  Irja R. Otsa

  
	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary E. Evans

  
	
   

  	
  Name:

  	
  Mary E. Evans

  
	
   

  	
  Title:

  	
  Associate Director

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  COMERICA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leslie A. Vogel

  
	
   

  	
  Name:

  	
  Leslie A. Vogel

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  NATIXIS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marie-Edith Dugeny

  
	
   

  	
  Name:

  	
  Marie-Edith Dugeny

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Natalie Trojan

  
	
   

  	
  Name:

  	
  Natalie Trojan

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CALYON NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert S. Smith

  
	
   

  	
  Name:

  	
  Robert S. Smith

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Myers

  
	
   

  	
  Name:

  	
  Brian Myers

  
	
   

  	
  Title:

  	
  Managing Director

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CITY NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Xavier Barrera

  
	
   

  	
  Name:

  	
  Xavier Barrera

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  THE GOVERNOR AND COMPANY OF

  THE BANK OF IRELAND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer Lyons

  
	
   

  	
  Name:

  	
  Jennifer Lyons

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elaine Crowley

  
	
   

  	
  Name:

  	
  Elaine Crowley

  
	
   

  	
  Title

  	
   

  
						

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  CHANG HWA COMMERCIAL BANK,

  LTD., LOS ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wen Che Chen

  
	
   

  	
  Name:

  	
  Wen Che Chen

  
	
   

  	
  Title:

  	
  Vice President & General Manager

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  FIRST COMMERCIAL BANK, 

  LOS ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Jen-Yu Lai

  
	
   

  	
  Name:

  	
  Larry Jen-Yu Lai

  
	
   

  	
  Title:

  	
  SAVP and Deputy General Manager

  
					

 

 

SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT
AGREEMENT

WITH THE RYLAND GROUP, INC.

 

 

	
   

  	
  MALAYAN BANKING BERHAD,

  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Fauzi Zulkifli

  
	
   

  	
  Name:

  	
  Fauzi Zulkifli

  
	
   

  	
  Title:

  	
  General Manager

  
					

 

 

EXHIBIT
A

 

BORROWING BASE CERTIFICATE

 

                The
undersigned, being the duly elected                                     
of The Ryland Group, Inc. (the “Company”) hereby certifies that the
following is a true and correct calculation of the Borrowing Base as of                                     
(the “Statement Date”). 
Capitalized terms used but not defined herein shall have the meanings
set forth in the Credit Agreement dated as of January 12, 2006, as
amended, extended, supplemented or otherwise modified from time to time (the “Agreement”),
by and among the Company, the several financial institutions party thereto (the
“Lenders”) and JPMorgan Chase Bank, N.A., as agent for the Lenders.

 

	
  Period Ending/Statement Date:

  	
                    ,
  200    

  

 

	
   

  	
   

  	
  ($000’s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Homes Proceeds Receivables

  	
   

  	
  $

  	
   

  	
   

  
	
  Sold – Construction in Progress/Completed

  	
   

  	
  $

  	
   

  	
   

  
	
  Unsold – Construction in Progress/Completed

  	
   

  	
  $

  	
   

  	
   

  
	
  Finished Lots

  	
   

  	
  $

  	
   

  	
   

  
	
  Land Under Development

  	
   

  	
  $

  	
   

  	
   

  
	
  Raw Land – Entitled

  	
   

  	
  $

  	
   

  	
   

  
	
  Raw Land – Unentitled

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Inventory

  	
   

  	
  $

  	
   

  	
   

  

 

Borrowing Base Calculation

 

A.            Borrowing Base.

 

1.  The following Unencumbered
Real Estate Inventory, Home Proceeds Receivable and Unrestricted Cash of the
Company and any Guarantor qualify for inclusion in the Borrowing Base (all
figures are as of Statement Date):

 

	
  100% of Unrestricted Cash in excess of
  $25,000,000 but not to 

  exceed $300,000,000

  	
   

  	
  $

  	
   

  	
   

  
	
  90% of Home Proceeds Receivable

  	
   

  	
  $

  	
   

  	
   

  
	
  90% of the book value of Sold Construction
  in Progress and Sold

  Completed Units

  	
   

  	
  $

  	
   

  	
   

  
	
  80% of the book value of Unsold
  Construction in Progress and Unsold

  Completed Units

  	
   

  	
  $

  	
   

  	
   

  
	
  70% of the book value of Finished Lots

  	
   

  	
  $

  	
   

  	
   

  
	
  50% of the book value of Land Under Development

  	
   

  	
  $

  	
   

  	
   

  
	
  25% of the book value of Raw Land – Entitled

  	
   

  	
  $

  	
   

  	
   

  

 

 

	
  Total

  	
     

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.  The sum of 70% of Finished
  Lots, 50% of Land Under Development

  	
   

  	
   

  	
   

  	
   

  
	
  and 25% of Raw Land Entitled shall not exceed 40% of the Borrowing
  Base

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  70% of the book value of Finished Lots

  	
   

  	
  $

  	
   

  	
   

  
	
  50% of the book value of Land Under Development

  	
   

  	
  $

  	
   

  	
   

  
	
  25% of the book value of Raw Land – Entitled

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  40% of Borrowing Base

  	
   

  	
  $

  	
   

  	
   

  
	
  Cushion/(Violation)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.  25% of the book value of
  Raw Land – Entitled shall not exceed

  	
   

  	
   

  	
   

  	
   

  
	
  10% of the Borrowing Base

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25% of book value of Raw Land – Entitled

  	
   

  	
  $

  	
   

  	
   

  
	
  10% of Borrowing Base

  	
   

  	
  $

  	
   

  	
   

  
	
  Cushion/(Violation)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. The Total Borrowing Base equals the total in item 1 above

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less adjustments
  (if any) required under item 2 or 3 above

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Borrowing Base

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.           Senior
  Permitted Debt.  The following
  figures are as of the

  	
   

  	
   

  	
   

  	
   

  
	
  Statement Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Senior Permitted Debt:

  	
   

  	
   

  	
   

  	
   

  
	
  Loans, including Swing Line Loans

  	
   

  	
  $

  	
   

  	
   

  
	
  Outstanding Facility LCs issued under the Agreement

  	
   

  	
  $

  	
   

  	
   

  
	
  Reimbursement Obligations

  	
   

  	
  $

  	
   

  	
   

  
	
  Other Senior Permitted Debt (as itemized in Annex I)

  	
   

  	
  $

  	
   

  	
   

  
	
  Total Senior Permitted Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base surplus/(deficit)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Certificate as of                                   ,
200   .

 

 

 

 

ANNEX I

 

TO BORROWING BASE CERTIFICATE

 

	
  Description
  of other Senior Permitted Debt

  	
   

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  5.375% Senior Notes due 6/1/08

  	
   

  	
  $

  
	
  b.

  	
   

  	
  5.375% Senior Notes due 5/15/12

  	
   

  	
  $

  
	
  c.

  	
   

  	
  5.375% Senior Notes due 1/15/15

  	
   

  	
  $

  
	
  d.

  	
   

  	
  Third party financial LC’s

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
								

 

 

Appendix I

 

CONSENT AND AGREEMENT OF GUARANTORS

 

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

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

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

 

[Guarantors]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]