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EXHIBIT 1.2
THE RYLAND GROUP, INC.
(a Maryland corporation)
$150,000,000
9 1/8% Senior Subordinated Notes due 2011
TERMS AGREEMENT
June 8, 2001
To: The Ryland Group, Inc.
24025 Park Sorrento
Suite 400
Calabasas, California 91302
Dear Sirs:
Reference is made to The Ryland Group, Inc. Debt Securities
Underwriting Agreement Basic Provisions, dated July 2, 1996 (the "Underwriting
Agreement"). This Agreement is the Terms Agreement referred to in the
Underwriting Agreement. We offer to purchase, on and subject to the terms and
conditions of the Underwriting Agreement, the following securities
("Securities") on the following terms:
Title: 9 1/8% Senior Subordinated Notes due 2011
Principal Amount
to be Issued: $150,000,000
Date of Maturity: June 15, 2011
Interest Payment: June 15 and December 15 of each year, commencing December
15, 2001
Public Offering
Price: 100.00%
Purchase Price: 98.56% (payable in immediately available funds)
Underwriting
Commission: 1.443%
Redemption Provisions: Redeemable at the option of the Company in whole or in
part at any time on or after June 15, 2006 and prior to
maturity at the redemption prices set forth in the
Prospectus relating to the Securities plus accrued and
unpaid interest, if any, to the date fixed for redemption.
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Delayed Delivery
Contracts: None
Closing Date and
Location: June 13, 2001, 10:00 A.M.;
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Additional
Co-Managers,
if any: UBS Warburg LLC, as Joint Book-Running Lead Manager
Banc One Capital Markets, Inc., as Co-Manager
Additional
Underwriters,
if any: None
Other Terms:
All provisions contained in the Underwriting Agreement, a copy of which
is attached hereto, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein, except that:
(a) Section 4 of the Underwriting Agreement shall be amended as
follows:
The phrase "Dillon, Read & Co. Inc., 535 Madison Avenue, New
York, New York 10022," shall be stricken and replaced with
"Banc of America Securities LLC, 9 West 57th Street, New York,
New York 10019".
(b) Section 6(a) of the Underwriting Agreement shall be amended as
follows:
The phrase "and each of their directors, officers, employees
and agents" shall be inserted after the word "Underwriter" in
the second line.
The words "that Underwriter" in the third line shall be
stricken and replaced with the word "they".
(c) The following paragraph shall be added to the end of Section
6(c) of the Underwriting Agreement:
"An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding."
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(d) Clause (vii) of Section 8 of the Underwriting Agreement shall
be amended to read in its entirety as follows:
"(vii) a downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that terms is
defined by the Commission for purposes of Rule 436(g)(2) or
such organization shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of any of the Company's debt
securities,"
(e) Section 9(d) of the Underwriting Agreement shall be amended as
follows:
The phrase "Dave Lesser, Esq., Executive Vice President and
General Counsel of the Company" shall be stricken and replaced
with the phrase "Timothy J. Geckle, Senior Vice President and
General Counsel of the Company".
(f) Section 9(e) of the Underwriting Agreement shall be amended as
follows:
The phrase "Piper & Marbury" shall be stricken and replaced
with the phrase "Piper Marbury Rudnick & Wolfe LLP".
(g) Clause (iv) of Section 9(f) of the Underwriting Agreement
shall be amended to read in its entirety as follows:
"(iv) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse
change in the financial condition, prospects, earnings,
business, properties or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus or any
material change in the Capital Stock or long-term debt of the
Company and its subsidiaries taken as a whole."
The Company represents and warrants to us that the representations and
warranties of the Company set forth in Section 1 of the Underwriting Agreement
are accurate as though expressly made at and as of the date hereof. Except as
otherwise provided above, all of the provisions contained in the Underwriting
Agreement, a copy of which is attached hereto as Annex A, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
The term "registration statement" appearing in Section 1(a) of the Underwriting
Agreement shall be deemed to refer to the Registration Statement (333-58208)
filed with the Commission on April 3, 2001.
As contemplated by Section 2 of the Underwriting Agreement, attached as
Schedule A hereto is a completed list of our underwriting commitment, which
shall be a part of this Agreement and the Underwriting Agreement.
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This Agreement shall be governed by the laws of the State of New York.
If the foregoing is in accordance with your understanding of the
agreement between the Underwriter and you, please sign and return to the
Underwriter a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement between the Underwriter and you in accordance with its terms and the
terms of the Underwriting Agreement.
Very truly yours,
BANC OF AMERICA SECURITIES LLC
By: /s/ Stephan T. Jaeger
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Name: Stephan T. Jaeger
Title: Vice President
Confirmed and accepted as of
the date first above written:
THE RYLAND GROUP, INC.
By: /s/ Timothy J. Geckle
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Name: Timothy J. Geckle
Title: Senior Vice President, General Counsel
and Secretary
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SCHEDULE A
Underwriter Principal Amount
----------- of Securities
to be Purchased
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Banc of America Securities LLC $90,000,000
UBS Warburg LLC 45,000,000
Banc One Capital Markets, Inc. 15,000,000
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Total ... $150,000,000