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EXHIBIT 1.2
THE RYLAND GROUP, INC.
(a Maryland corporation)
$150,000,000
9.75% Senior Notes due 2010
TERMS AGREEMENT
August 21, 2000
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: 9.75% Senior Notes due 2010
Principal Amount
to be Issued: $150,000,000
Date of Maturity: September 1, 2010
Interest Payment: March 1 and September 1 of each year, commencing
March 1, 2001
Public Offering
Price: 100.00%
Purchase Price: 98.6212% (payable in immediately available funds).
Underwriting
Commission: 1.3788%
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Redemption
Provisions: Redeemable at the option of the Company in
whole or in part at any time on or after
September 1, 2005 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.
Delayed Delivery
Contracts: None
Closing Date and
Location: August 24, 2000, 10:00 A.M.;
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Additional
Co-Managers,
if any: None
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
"Salomon Smith Barney Inc., 390 Greenwich Street, New York, New
York 10013".
(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".
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(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 judgement 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."
(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,
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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 (333-31034)
filed with the Commission on February 24, 2000, as amended by Pre-Effective
Amendment No. 1, filed with the Commission on February 29, 2000 and further
amended by Post-Effective Amendment No. 1 to the Registration Statement filed
with the Commission on August 21, 2000.
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.
This Agreement shall be governed by the laws of the State of New York.
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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,
SALOMON SMITH BARNEY INC.
By: /s/ STEPHEN P. CUNNINGHAM
-----------------------------
Name: Stephen P. Cunningham
Title: Vice President
Confirmed and accepted as of the date first above written:
THE RYLAND GROUP, INC.
By: /s/ GORDON MILNE
--------------------------
Name: Gordon Milne
Title: Senior Vice President
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SCHEDULE A
<TABLE>
<CAPTION>
Underwriter Principal Amount
----------- of Securities
to be Purchased
-----------------
<S> <C>
Salomon Smith Barney Inc...................... $150,000,000
------------
Total ......................... $150,000,000
============
</TABLE>
