8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

May 10, 2012

Date of Report
(Date of earliest event reported)

THE RYLAND GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Maryland	001-08029	52-0849948
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3011 Townsgate Road, Suite 200, Westlake Village, CA  91361-3027

(Address of Principal Executive Offices)  (ZIP Code)

Registrant’s telephone number, including area code: (805) 367-3800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

oWritten communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement

On May 10, 2012, The Ryland Group, Inc. (the “Company”) and certain of its subsidiaries entered into a Terms Agreement (including the Underwriting Agreement Basic Provisions) to sell $225 million aggregate principal amount of its 1.625% Convertible Senior Notes due 2018 (the “Notes”).  The offering of the Notes closed on May 16, 2012.  The Company received net proceeds of approximately $218.8 million from this offering, before offering expenses.  The Company expects to use these proceeds for general corporate purposes, which may include repayment or repurchase of outstanding indebtedness. The Company made certain customary representations, warranties and covenants concerning the Company in the Terms Agreement (including the Underwriting Agreement Basic Provisions) and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

The Company will pay interest on the Notes on May 15 and November 15 of each year, commencing on November 15, 2012.  The Notes will mature on May 15, 2018.  The Notes will initially be convertible into shares of the Company’s common stock (the “Common Stock”) at a conversion rate of 31.2168 shares of the Company’s Common Stock per $1,000 principal amount of Notes, corresponding to an initial conversion price of approximately $32.03 per share, representing a conversion premium of approximately 42.5% based on the closing price of $22.48 per share of the Common Stock on May 10, 2012. The conversion rate will be subject to adjustment upon the occurrence of certain events. The Notes will be fully and unconditionally guaranteed, jointly and severally, by substantially all of the Company’s wholly owned homebuilding subsidiaries (the “Guarantors”).

The Notes were issued under an indenture with The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as trustee. (the “Trustee”), dated June 28, 1996 (the “Indenture”), as supplemented by that certain Seventh Supplemental Indenture, dated as of May 16, 2012, by and among the Company, the Guarantors and the Trustee (the “Supplemental Indenture”). A copy of the press release announcing the closing is filed as Exhibit 99.1 hereto.

A legality opinion of DLA Piper LLP (US) with respect to the validity of the Notes, the Guarantees and the shares of Common Stock issuable upon conversion of the Notes is attached hereto as Exhibit 5.1 and is incorporated herein by reference.

The Terms Agreement under which the Company sold the Notes (including the Underwriting Agreement Basic Provisions), the Indenture, a form of the Notes, the Supplemental Indenture and the statement of eligibility of the trustee are all filed or incorporated by reference as exhibits to this current report.

Item 2.03Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 is incorporated by reference into this Item 2.03.

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Item 9.01Financial Statements and Exhibits

(d)  Exhibits

1.1Terms Agreement (including the Underwriting Agreement Basic Provisions) dated May 10, 2012, among the Company, the Guarantors and the Underwriters named therein.

4.1Indenture dated as of June 28, 1996 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as trustee (incorporated by reference to Form S-3 (No. 33-50933) filed May 15, 1996).

4.2Seventh Supplemental Indenture dated as of May 16, 2012 by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as trustee.

4.3Form of 1.625% Convertible Senior Note due 2018 (included in Exhibit 4.2).

4.4Form of Guarantee of 1.625% Convertible Senior Note due 2018 (included in Exhibit 4.2).

5.1Opinion of DLA Piper LLP (US) dated May 16, 2012.

23.1Consent of DLA Piper LLP (US) (included in Exhibit 5.1).

25.1Statement of Eligibility of The Bank of New York Mellon Trust Company, N.A., to act as trustee under the Indenture (incorporated by reference to Form S-3 (No. 333-179206 filed January 27, 2012)).

99.1Press release dated May 16, 2012.

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE RYLAND GROUP, INC.
Date: May 16, 2012	By:	/s/ Timothy J. Geckle
		Timothy J. Geckle
		Senior Vice President, General Counsel
		and Secretary

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EXHIBIT INDEX

Exhibit Number	Description
1.1	Terms Agreement (including the Underwriting Agreement Basic Provisions) dated May 10, 2012, among the Company, the Guarantors and the Underwriters named therein.
4.1	Indenture dated as of June 28, 1996 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as trustee (incorporated by reference to Form S-3 (No. 33-50933) filed May 15, 1996).
4.2	Seventh Supplemental Indenture dated as of May 16, 2012 by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as trustee.
4.3	Form of 1.625% Convertible Senior Note due 2018 (included in Exhibit 4.2).
4.4	Form of Guarantee of 1.625% Convertible Senior Note due 2018 (included in Exhibit 4.2).
5.1	Opinion of DLA Piper LLP (US) dated May 16, 2012.
23.1	Consent of DLA Piper LLP (US) (included in Exhibit 5.1).
25.1	Statement of Eligibility of The Bank of New York Mellon Trust Company, N.A., to act as trustee under the Indenture (incorporated by reference to Form S-3 (No. 333-179206 filed January 27, 2012)).
99.1	Press release dated May 16, 2012.

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EX-1.1

Exhibit 1.1

EXECUTION VERSION

THE RYLAND GROUP, INC.

(a Maryland corporation)

$200,000,000

1.625% Convertible Senior Notes due 2018

Terms Agreement

May 10, 2012

To:The Ryland Group, Inc.

3011 Townsgate Road

Suite 200

Westlake Village, California  91361-3027

Dear Sirs:

Reference is made to The Ryland Group, Inc. Convertible Debt Securities Underwriting Agreement Basic Provisions, dated May 10, 2012 (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:	1.625% Convertible Senior Notes due 2018
Principal Amount to be Issued:	$200,000,000

Over-allotment Option:	$25,000,000. Said option may be exercised in whole or in part at any time on or before the 30th day after the date of the Final Prospectus upon written or telegraphic notice by the Representatives to the Company setting forth the aggregate principal amount of the Option Securities as to which the several Underwriters are exercising the option and the Option Delivery Date. The aggregate principal amount of Option Securities to be purchased by each Underwriter shall be the same percentage of the total aggregate principal amount of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as the Representatives in their absolute discretion shall make to ensure that the Option Securities are not issued in minimum denominations of less than $1,000 or whole multiples thereof.
Date of Maturity:	May 15, 2018
Interest Payment:	May 15 and November 15 of each year, commencing November 15, 2012
Public Offering Price:	100% of the aggregate principal amount plus accrued interest, if any, from and including May 16, 2012.
Purchase Price:	100% (payable in immediately available funds)
Underwriting Commission:	3.00%
Subsidiary Guarantees:	Fully and unconditionally guaranteed on an unsecured and unsubordinated basis by the subsidiaries listed on the signature page hereto.
Conversion Rate and Other Terms:	As set forth in Pricing Term Sheet dated May 10, 2012 referenced in Schedule 1 hereto.
Closing Date and Location:	May 16, 2012, 10:00 A.M. (New York Time); Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017
Joint Book-Running Managers and Representatives:	Citigroup Global Markets Inc. J.P. Morgan Securities LLC
Co-Manager:	UBS Securities LLC

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Additional Underwriters, if any:	None.
Underwriter controlling lock-up release under Section 5(q) of the Underwriting Agreement:	Citigroup Global Markets Inc.

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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.

The Company and the Subsidiary Guarantors jointly and severally represent and warrant to us that the representations and warranties of the Company and the Subsidiary Guarantors 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 on Form S-3 (file number 333-179206) initially filed with the Commission on January 27, 2012.

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.  As contemplated by Section 1 of the Underwriting Agreement, attached as Schedule 1 hereto is a complete list of the Issuer Free Writing Prospectuses, which shall be a part of this Agreement and the Underwriting Agreement.

This Agreement shall be governed by, and construed in accordance with, 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 Underwriters and you, please sign and return to the Underwriters a counterpart hereof, whereupon this instrument along with all counterparts and together with the Underwriting Agreement shall be a binding agreement between the Underwriters and you in accordance with its terms and the terms of the Underwriting Agreement.

			Very truly yours,
			CITIGROUP GLOBAL MARKETS INC.
			By:	/s/ Richard Moriarty
				Name:	Richard Moriarty
				Title:	Managing Director
			J.P. MORGAN SECURITIES LLC
			By:	/s/ Santosh Sreenivasan
				Name:	Santosh Sreenivasan
				Title:	Managing Director
			For themselves and as Representatives of the several Underwriters named in Schedule A to the foregoing Agreement
Confirmed and accepted as of the date first above written:
THE RYLAND GROUP, INC.
By:	/s/ Gordon A. Milne
	Name:	Gordon A. Milne
	Title:	Executive Vice President and
	Chief Financial Officer

(Signature page continued on next page)

Confirmed and accepted as of the date first above written:

Moore’s Orchard, LLC (1)

RH Builders of Indiana, Inc. (2)

RH Investment of Indiana, Inc. (2)

RH of Indiana, L.P. (3)

RH of Texas Limited Partnership (4)

Ryland Communities, Inc. (2)

Ryland Homes Investment-Texas, Inc. (2)

Ryland Homes Nevada, LLC (5)

Ryland Homes of Texas, Inc. (2)

Ryland Homes of Arizona, Inc. (2)

Ryland Homes of California, Inc. (2)

Ryland Organization Company (2)

Ryland Ventures III, Inc. (2)

The Regency Organization, Inc. (2)

The Ryland Corporation (2)

(Signature page continued on next page)

(1)	By:	Ryland Ventures III, Inc.
		Its: General Manager
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(2)	By:	/s/ Timothy J. Geckle
		Name: Timothy J. Geckle
		Title: Secretary
(3)	By:	RH Builders of Indiana, Inc.
		Its: General Partner
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(4)	By:	Ryland Homes of Texas, Inc.
		Its: General Partner
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(5)	By:	The Ryland Group, Inc.
		Its: Sole Member
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary

SCHEDULE A

Underwriter	Principal Amount of Securities to be Purchased
Citigroup Global Markets Inc.	$	120,000,000
J.P. Morgan Securities LLC	60,000,000
UBS Securities LLC	20,000,000
Total	$	200,000,000

ANNEX A

EXECUTION VERSION

THE RYLAND GROUP, INC.

Convertible Debt Securities

Underwriting Agreement Basic Provisions

May 10, 2012

The basic provisions set forth herein are intended to be incorporated by reference in a terms agreement (a “Terms Agreement”) of the type referred to in Section 2 hereof.  With respect to any particular Terms Agreement, the Terms Agreement, together with the provisions hereof incorporated therein by reference, is herein referred to as this “Agreement” and all references herein to the “Terms Agreement” shall refer to each respective Terms Agreement.  Terms defined in the Terms Agreement are used herein as therein defined.  The term “Representative,” as used herein, means the Underwriter or Underwriters (as defined below) named in a Terms Agreement as Representative or Representatives.  If no Underwriter or Underwriters are named in the Terms Agreement as Representative or Representatives, then the terms “Underwriters” and “Representatives” as used herein shall mean the Underwriter (if only one) or all Underwriters (if more than one) listed in such Terms Agreement.

The Ryland Group, Inc., a Maryland corporation (the “Company”), may issue and sell from time to time series of its convertible debt securities registered under the registration statement referred to in Section 1(a) hereof (the “Underwritten Securities”) to the Underwriters (the “Underwriters”) named in the Terms Agreement relating to any such Securities.  The Underwritten Securities may have varying designations, denominations, interest rates and payment dates, maturities, redemption provisions, conversion rates and selling prices and may be guaranteed by certain of the Company’s subsidiaries (the “Subsidiary Guarantors”), with all such terms for any particular series of Securities (together with any other terms relating to such series) to be determined and set forth in the Terms Agreement relating to the series. The Company may also grant to the Underwriters an option to purchase an additional principal amount of Underwritten Securities to cover over-allotments (the “Option Securities”; the Option Securities, together with the Underwritten Securities, hereinafter called the “Securities”). The Securities will be convertible into shares of Common Stock, par value $1.00 per share (the “Common Stock”), of the Company.

1.             The Company and the Subsidiary Guarantors (upon becoming parties hereto), jointly and severally, represent, warrant and agree that as of the Execution Time and on the Delivery Date:

(a)           (i)  A registration statement on Form S-3, including a related Base Prospectus, with respect to the Securities has been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder and has become effective.  If any post-effective amendment to such registration statement has been filed with the Commission prior to the execution and delivery of the Terms Agreement, the most recent such amendment has been declared effective by the Commission.  Copies of such registration statement as amended as of the Execution Time have

been delivered by the Company to the Representatives.  As used in this Agreement, (i) “Preliminary Prospectus” means any preliminary prospectus supplement to the Base Prospectus referred to above specifically relating to the Subject Securities (as defined below) which is used prior to the filing of the Final Prospectus, together with the Base Prospectus; (ii) “Registration Statement” means the registration statement referred to above, including exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations and deemed part of such registration statement pursuant to Rule 430B of the Rules and Regulations, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Delivery Date, shall also mean such registration statement as so amended; (iii) “Base Prospectus” shall mean the base prospectus referred to above contained in the Registration Statement at the Execution Time; (iv) “Final Prospectus” means the prospectus supplement specifically relating to the Securities to be purchased by the Underwriters pursuant to the Terms Agreement (the “Subject Securities”) that was first filed pursuant to Rule 424(b) of the Rules and Regulations after the Execution Time, together with the Base Prospectus; (v) “Free Writing Prospectus” means a free writing prospectus, as defined in Rule 405 of the Rules and Regulations; (vi) “Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433 of the Rules and Regulations; (vii) “Disclosure Package” shall mean (A) the Base Prospectus, (B) the Preliminary Prospectus used most recently prior to the Execution Time, (C) the Issuer Free Writing Prospectuses, if any, identified in Schedule 1 to the Terms Agreement, and (D) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package; and (viii) “Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective; (ix) “Execution Time” shall mean the time when sales of the Securities were first made.

(ii)           The Company meets the requirements for the use of Form S-3 under the Act, and as of the Execution Time the Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus, the Final Prospectus or the Registration Statement; no proceeding for that purpose or pursuant to Section 8A of the Act against the Company or related to the offering has been initiated or, to the knowledge of the Company or any Subsidiary Guarantor, threatened by the Commission; no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company.

(iii)          Any reference herein to the Registration Statement, the Preliminary Prospectus, the Disclosure Package or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this Agreement and, if the Company files any document pursuant to the Exchange Act after the date of this Agreement and prior to the termination of the offering of the Subject Securities by the Underwriters, which documents are deemed to be incorporated by reference into the Final Prospectus, such filing shall constitute an amendment or supplement to the Final Prospectus and the term “Final Prospectus” shall refer also to said prospectus as supplemented by the documents so filed from and after the time said documents are filed with the Commission.

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(b)           On each Effective Date, the Registration Statement did, and when the Final Prospectus is first filed in accordance with Rule 424(b) and on the Delivery Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Delivery Date (the “Option Delivery Date”), the Final Prospectus (and any supplement thereto) will, contain all statements which are required to be contained therein by the Act, the Exchange Act, the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission under such acts; on the Effective Date and on the Delivery Date the indenture, including any amendments and supplements thereto, pursuant to which the Subject Securities and any related guarantees (the “Subsidiary Guarantees”) will be issued (the “Indenture”), did or will conform with the requirements of the Trust Indenture Act and the rules and regulations of the Commission thereunder; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and on the date of the Final Prospectus and any amendment or supplement thereto and on the Delivery Date and the Option Delivery Date, if applicable, the Final Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Subsidiary Guarantors, if any, make no representation or warranty as to information contained or omitted from the Registration Statement or the Final Prospectus in reliance upon and in conformity with written information furnished to the Company through the Representatives specifically for inclusion therein.  The foregoing representations, warranties and agreements shall not apply to that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification under the Trust Indenture Act (Form T-1) of the Trustee under the Indenture.  The Indenture has been qualified under the Trust Indenture Act.

(c)           (i)  The Disclosure Package and (ii) each electronic roadshow used by the Company when taken together as a whole with the Disclosure Package do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Subsidiary Guarantors, if any, make no representation or warranty as to information contained or omitted from the Registration Statement or the Final Prospectus in reliance upon and in conformity with written information furnished to the Company through the Representatives specifically for inclusion therein.

(d)           Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein and any prospectus supplement deemed to be a part thereof that has not been superseded or modified.  The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company through the Representatives specifically for inclusion therein.

(e)           Neither the Company nor any of its subsidiaries (as defined in Rule 405 of the Rules and Regulations) is in violation of its corporate charter or by-laws or other organizational documents or in default under any agreement, indenture or instrument, the effect

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of which violation or default would be material to the Company and its subsidiaries taken as a whole; the execution, delivery and performance of the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”), the consummation of the transactions contemplated hereby and compliance by the Company with the provisions of the Subject Securities and the Indenture will not conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of its subsidiaries pursuant to the terms of, or result in a breach of any of the terms of or constitute a default under, any loan agreement, indenture, mortgage, deed of trust, other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in a violation of the corporate charter or by-laws or other organizational documents of the Company or any of its subsidiaries or any law, statute or any applicable order, rule or regulation of any court, regulatory body, administrative agency or governmental agency or authority having jurisdiction over the Company, any of its subsidiaries or their respective properties; and except as required by the Act, the Trust Indenture Act, the Exchange Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court, regulatory body, administrative agency or governmental agency or authority is required for the execution, delivery and performance of this Agreement and the Indenture by the Company and the Subsidiary Guarantors, if any, and the consummation of the transactions contemplated hereby.

(f)            Except as contemplated in the Disclosure Package and the Final Prospectus, subsequent to the respective dates as of which information is given in the Disclosure Package and the Final Prospectus, (i) 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, and (ii) there has not been any material change, on a consolidated basis, in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries.

(g)           Ernst & Young, whose report appears in the Company’s most recent Annual Report on Form 10-K (and, if applicable, Current Report on Form 8-K) which is incorporated by reference in the most recent Preliminary Prospectus and the Final Prospectus, is an independent registered public accounting firm as required by the rules and regulations adopted by the Public Company Accounting Oversight Board (United States), by the Act and the Rules and Regulations.

(h)           The audited financial statements included or incorporated by reference in the most recent Preliminary Prospectus and the Final Prospectus present fairly the financial condition and results of operations of the entities to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved; and the supporting schedules included or incorporated by reference in the most recent Preliminary Prospectus and the Final Prospectus present fairly the information required to be stated therein.  The unaudited financial statements of the Company included or incorporated by reference in the most recent Preliminary Prospectus and the Final Prospectus and the related notes, present fairly, in all material respects, the financial position of the Company and its subsidiaries and, to the extent applicable are prepared in accordance with the instructions to Form 10-Q.

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(i)            On the Delivery Date (as defined in Section 4 hereof) (i) the Indenture will have been validly authorized, executed and delivered by the Company and, if applicable, the Subsidiary Guarantors and will constitute the legally binding obligation of the Company and, if applicable, the Subsidiary Guarantors, enforceable in accordance with its terms; (ii) the Subject Securities will have been validly authorized for issuance, and, upon execution, authentication, delivery and payment therefor as provided in this Agreement and the Indenture, will be validly issued and outstanding, and will constitute valid and legally binding obligations of the Company enforceable against the Company and entitled to the benefits of the Indenture; (iii) the Subsidiary Guarantees will have been validly authorized by the Subsidiary Guarantors and, when duly executed and delivered by the Subsidiary Guarantors in accordance with the terms of the Indenture, upon the due execution, authentication and delivery of the Subject Securities in accordance with the Indenture and the issuance of the Subject Securities in the sale to the Underwriters contemplated by this Agreement, will constitute valid and legally binding obligations of the Subsidiary Guarantors enforceable against the Subsidiary Guarantors and entitled to the benefits of the Indenture; (iv) the shares of Common Stock issuable upon conversion of the Subject Securities have been validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Subject Securities and the Indenture, will be validly issued, fully paid and non-assessable; and (v) the Subject Securities, the Indenture, the Subsidiary Guarantees and the Common Stock will conform to the descriptions thereof contained in the Disclosure Package and the Final Prospectus.

(j)            The Company and each of its subsidiaries have been duly incorporated or organized, are validly existing and in good standing under the laws of their respective jurisdictions of incorporation or organization, are duly qualified to do business and in good standing as foreign corporations or other entities in each jurisdiction in which their respective ownership of property or the conduct of their respective businesses requires such qualifications (except where the failure to so qualify would not have a material adverse effect upon the Company and its subsidiaries taken as a whole).

(k)           The Company and each of its subsidiaries have all requisite power and authority and all necessary material authorizations, approvals, orders, licenses, certificates and permits of and from all regulatory or governmental officials, bodies and tribunals, to own or lease their respective properties and to conduct their respective businesses as now being conducted and as described in the Disclosure Package and the Final Prospectus; and all such authorizations, approvals, licenses, certificates and permits are in full force and effect, and the Company and each of its subsidiaries are in all material respects complying therewith.

(l)            Except as contemplated in the most recent Preliminary Prospectus and the Final Prospectus, there is not pending or, to the knowledge of the Company or any Subsidiary Guarantor, threatened any action, suit or proceeding to which the Company or any of its subsidiaries is a party, before or by any court, regulatory body, administrative agency or governmental agency or authority that is reasonably likely to result in any material adverse change in the net worth, financial condition or results of operations of the Company and its subsidiaries taken as a whole, or is reasonably likely to materially adversely affect the properties or assets of the Company and its subsidiaries taken as a whole.

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(m)          The documents incorporated by reference in the Registration Statement, the Prospectus, any amendment or supplement thereto or any Preliminary Prospectus, when they became or become effective under the Act or were or are filed with the Commission under the Exchange Act, as the case may be, conformed or will conform in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder.

(n)           There are no contracts or other documents which are required to be filed as exhibits to the Registration Statement by the Act or by the Rules and Regulations, or which were required to be filed as exhibits to any document incorporated by reference in the Preliminary Prospectus or Final Prospectus by the Exchange Act or the rules and regulations of the Commission thereunder, which have not been filed as exhibits to the Registration Statement or to such document or incorporated therein by reference as permitted by the Rules and Regulations or the rules and regulations of the Commission under the Exchange Act, as the case may be.

(o)           The Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”) has been duly authorized, executed and delivered by the Company and each Subsidiary Guarantor and the Company and each Subsidiary Guarantor has full power and authority to execute, deliver and perform the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”).

(p)           There are no holders of securities of the Company who, by reason of the filing of the Registration Statement under the Act or the execution by the Company of this Agreement, have the right to request or demand that the Company register under the Act securities held by them.

(q)           The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and its subsidiaries’ internal controls over financial reporting are effective and the Company and its subsidiaries are not aware of any material weakness in their internal control over financial reporting.

(r)            The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and that the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus fairly

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presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidance applicable thereto.  The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

(s)           The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

2.             The obligation of the Underwriters to purchase, and the Company to sell, the Subject Securities is evidenced by a Terms Agreement delivered at the time the Company determines to sell the Subject Securities.  The obligations of the Underwriters to purchase the Subject Securities will be several and not joint.  The Terms Agreement specifies the firm or firms which will be Underwriters, the principal amount of the Subject Securities to be purchased by each Underwriter, the purchase price to be paid by the Underwriters for the Subject Securities, the public offering price of the Subject Securities, the firm, if any, which will serve as a “qualified independent underwriter” within the meaning of Conduct Rule 2720 of the Financial Industry Regulatory Authority, Inc. (in such capacity and not otherwise the “QIU”) with respect to the offering of the Subject Securities and the amount of the underwriting discount to be received by such firm which shall be deemed compensation for its services as QIU and certain terms of the Subject Securities not already specified in the Indenture (including, without limitation, designations, denominations, interest rates and payment dates, maturity, redemption provisions, conversion rates and sinking fund requirements).

3.             The Company shall not be obligated to deliver any Subject Securities except upon payment for all Subject Securities to be purchased pursuant to this Agreement as hereinafter provided.

If any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Underwriters shall be obligated to purchase the Subject Securities which the defaulting Underwriter agreed but failed to purchase in the respective proportions which the principal amount of Subject Securities set forth in the Terms Agreement to be purchased by each remaining non-defaulting Underwriter bears to the aggregate principal amount of Subject Securities set forth in such Terms Agreement for all the remaining non-defaulting Underwriters; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any Subject Securities if the aggregate principal amount of Subject Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase exceeds 9.99% of the total principal amount of Subject Securities, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the principal amount of Subject Securities set forth in the Terms Agreement to be purchased by it.  If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to the Underwriters who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all the Subject Securities.  If the remaining Underwriters or other underwriters satisfactory to the remaining Underwriters do not elect to purchase the Subject Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase, this Agreement shall terminate without liability on

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the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of the expenses as set forth in Section 5(m) and with respect to any non-defaulting Underwriter as set forth in Section 6 and shall not continue to be liable for the payment of expenses of any defaulting Underwriter as set forth in Section 6.

Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, it may have to the Company and any non-defaulting Underwriter for damages caused by its default.  If other Underwriters agree to purchase the Subject Securities of a defaulting Underwriter, either the remaining non-defaulting Underwriters or the Company may postpone the Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, any Preliminary Prospectus or the Final Prospectus or in any other document or arrangement.

4.             Delivery of and payment for the Underwritten Securities and the Option Securities (if the option to purchase Option Securities shall have been exercised on or before the third business day immediately preceding the Delivery Date) shall be made at the office of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, at 10:00 A.M., New York City time, on the third business day following the Execution Time or at such other location, time and date as shall be agreed upon between the Underwriters and the Company.  This date and time are sometimes referred to as the “Delivery Date.”  On the Delivery Date, the Company shall deliver the Underwritten Securities and the Option Securities, if applicable, to the Underwriters against payment to or upon the order of the Company of the purchase price payable in immediately available funds.  Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder.  The Underwritten Securities and the Option Securities, if applicable, shall be prepared in definitive fully registered form in such denominations, and registered in such names as the Underwriters shall request in writing not less than two full business days prior to the Delivery Date.  The Company shall make the Underwritten Securities and the Option Securities, if applicable, available for inspection by the Underwriters in New York, New York not later than 1:00 P.M., New York City time, on the business day prior to the Delivery Date.

If the option to purchase Option Securities is exercised after the third business day immediately preceding the Delivery Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives at the office of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, at 10:00 A.M., New York City time, on the date specified by the Representatives (which shall be within three business days after exercise of said option) or at such other location, time and date as shall be agreed upon between the Underwriters and the Company. If settlement for the Option Securities occurs after the Delivery Date, the Company shall deliver the Option Securities to the Underwriters against payment to or upon the order of the Company of the purchase price payable in immediately available funds.  Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder.  The Option Securities shall be prepared in definitive fully registered form in such denominations, and registered in such names as the Underwriters shall request in writing not less than two full business days prior to the Option Delivery Date.  The Company shall make the

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Option Securities available for inspection by the Underwriters in New York, New York not later than 1:00 P.M., New York City time, on the business day prior to the Option Delivery Date. The obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Delivery Date pursuant to Section 9 hereof.

5.             The Company and the Subsidiary Guarantors, jointly and severally, agree:

(a)           To furnish promptly to the Representatives and to counsel for the Underwriters a signed copy of the Registration Statement as originally filed and each amendment or supplement thereto filed with the Commission, including all documents incorporated therein by reference and all consents and exhibits filed therewith.

(b)           To deliver promptly to the Underwriters such number of the following documents as the Underwriters may request during the period referred to in (c) below:  (i) conformed copies of the Registration Statement (excluding exhibits other than the computation of the ratio of earnings to fixed charges, the Indenture and this “Underwriting Agreement Basic Provisions”, (ii) any Preliminary Prospectus, (iii) the Final Prospectus, (iv) any Issuer Free Writing Prospectus and (v) any documents incorporated by reference in the Registration Statement, the most recent Preliminary Prospectus or the Final Prospectus.

(c)           Prior to the termination of the offering of the Subject Securities, not to file any amendment of the Registration Statement or supplement (including the Final Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished a copy thereof to the Underwriters and to counsel for the Underwriters and obtained the consent of the Underwriters to the filing (which consent shall not be unreasonably withheld; provided, however, with respect to any filing that is required to be made under the Exchange Act, prior consent of the Underwriters to such filing will not be required hereunder if it would be impracticable to obtain such consent prior to the time such filing is required to be made).

(d)           To cause the Final Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing.

(e)           To advise the Underwriters promptly (i) when the Final Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Subject Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Final Prospectus or for any additional information (to the extent that the amendment or supplement relates to or covers the Subject Securities), (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose or pursuant to Section 8A of the Act, (v) of receipt by the Company of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vi) of receipt by the

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Company of any notification with respect to the suspension of the qualification (or exemption from qualification) of the Subject Securities for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose.

(f)            If, during the period referred to in (d) above, the Commission shall issue a stop order suspending the effectiveness of the Registration Statement, to use its best efforts to obtain as soon as possible the withdrawal of that order at the earliest possible time.

(g)           To prepare any material required to be filed by the Company pursuant to Rule 433(d) under the Act and to file any such materials within the applicable time periods prescribed for such filings by Rule 433.  To prepare a final term sheet, containing solely a description of final terms of the Subject Securities and the offering thereof, in a form approved by the Representatives and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule.

(h)           If, at any time prior to the filing of a final prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at such time not misleading, the Company will (i) notify promptly the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement to the Representatives in such quantities as the Representatives may reasonably request.

(i)            The Company agrees that, unless it has obtained or will obtain the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Subject Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than the information contained in the final term sheet prepared and filed pursuant to Section 5(g) above and any electronic roadshow; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule 1 to the Terms Agreement.  Any such free writing prospectus consented to by the Representatives or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. Notwithstanding anything to the contrary herein, the Company consents to the use by any Underwriter of a Free Writing Prospectus that contains only (A) information describing only the preliminary terms of the Subject Securities or their offering and that is included in the final term sheet of the Company, or (B) other information that is not “issuer information” as defined in Rule 433 of the Rules and Regulations.

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(j)As soon as practicable after the date of each Terms Agreement, to make generally available to its security holders and to deliver to the Underwriters an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the Rules and Regulations (including, at the option of the Company, Rule 158).

(k)During the period of three years after the date of any Terms Agreement, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, if any, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report or definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request pursuant to the Exchange Act or any rule or regulation of the Commission thereunder.

(l)To promptly arrange, in cooperation with the Underwriters, for the qualification, or exemption from qualification, of the Subject Securities for sale under the laws of such jurisdictions as the Underwriters may designate and will maintain such qualifications in effect so long as required for the distribution of the Subject Securities and will pay all fees and expenses (including reasonable counsel fees and expenses) relating to the qualification of the Subject Securities under the securities laws pursuant to this Section 5(l); provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction.

(m)To pay the costs incident to the authorization, issuance, sale and delivery of the Subject Securities and any taxes payable in that connection; the costs incident to the preparation, printing and filing under the Act of the Registration Statement and any amendments, supplements and exhibits thereto; the costs incident to the preparation, printing and filing of any document and any amendments and exhibits thereto required to be filed by the Company under the Exchange Act; the costs of distributing the Registration Statement as originally filed and each amendment and post-effective amendment thereof (including exhibits), any preliminary prospectus, the Preliminary Prospectus, any Free Writing Prospectus, the Final Prospectus and any documents incorporated by reference in any of the foregoing documents; the costs of printing this Agreement; the costs of any filings with the Financial Industry Regulatory Authority, Inc.; fees paid to rating agencies in connection with the rating of the Subject Securities; the fees and expenses of listing the Common Stock on the New York Stock Exchange; the fees and expenses of qualifying the Subject Securities under the securities laws of the several jurisdictions as provided in this Section and of preparing and printing a Blue Sky Memorandum, and a memorandum concerning the legality of the Subject Securities as an investment (including reasonable fees of counsel to the Underwriters payable with respect thereto); and all other costs and expenses incident to the performance of the Company’s obligations under this Agreement; provided that, except as provided in this Section and in Section 6 and Section 10 hereof, the Underwriters shall pay their own costs and expenses, including the fees and expenses of their counsel, any transfer taxes on the Subject Securities which they may sell and the expenses of advertising any offering of the Subject Securities made by the Underwriters.

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(n)Subject to Section 5(c) hereof, until the termination of the offering of the Subject Securities, to timely file all documents, and any amendments to previously filed documents, required to be filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.

(o)If at any time when the Final Prospectus relating to the Subject Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event relating to or affecting the Company or any of its subsidiaries occurs as a result of which the Final Prospectus as then supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made at such time, not misleading, or if it is necessary, at any time to amend the Registration Statement, file a new registration statement or supplement the Final Prospectus to comply with the Act or the Exchange Act, including in connection with use or delivery of the Final Prospectus, the Company will (i) promptly notify the Representatives thereof, (ii) will prepare an amendment or supplement or new registration statement (in form and substance reasonably satisfactory to counsel to the Underwriters) or, with the consent of counsel to the Underwriters (which shall not be unreasonably withheld), make an appropriate filing pursuant to Section 13 or 14 of the Exchange Act which will correct such statement or omission or effect such compliance, (iii) use its best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Final Prospectus and (iv) supply any supplemented Final Prospectus to the Representatives in such quantities as the Representatives may reasonably request.

(p)During the period beginning on the date of the Term Agreement and continuing to the Delivery Date, not to publicly offer, sell, contract to sell or otherwise dispose of any debt securities of the Company with maturities longer than one year, other than the Subject Securities to the Underwriters.

(q)The Company will not, without the prior written consent of one or more of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock; or publicly announce an intention to effect any such transaction, until 60 days after the Delivery Date, provided, however, that the Company may issue and sell Common Stock pursuant to any employee stock option plan, stock ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time and the Company may issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution Time.

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(r)The Company will reserve and keep available at all times, free of preemptive rights, the full number of shares of Common Stock issuable upon conversion of the Subject Securities.

(s)Between the date hereof and the Delivery Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion rate.

6.(a)  The Company and each of the Subsidiary Guarantors, jointly and severally, shall indemnify and hold harmless each Underwriter, its affiliates, partners, directors, officers, employees and agents and any person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons from and against any losses, claims, damages or liabilities, joint or several, to which they may become subject, under the Act, the Exchange Act, or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Subject Securities, the Final Prospectus, the Disclosure Package or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each such indemnified party for any legal and other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Subsidiary Guarantors shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of, or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Subject Securities, the Final Prospectus, the Disclosure Package or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by the Underwriters through the Representatives specifically for use in the preparation thereof.  This indemnity agreement is in addition to any liability which the Company and any Subsidiary Guarantor may otherwise have to any Underwriter.

(b)Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company and each Subsidiary Guarantor against any losses, claims, damages or liabilities, joint or several, to which their directors and officers who signed the Registration Statement, and any person who controls the Company and each Subsidiary Guarantor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons from and may become subject, under the Act, the Exchange Act, or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities (or actions in respect thereof), arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Subject Securities, the Final Prospectus, the Disclosure Package or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated

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therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use in the preparation thereof; and shall reimburse such indemnified party for any legal and other expenses reasonably incurred by the Company or any Subsidiary Guarantor  in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred.

(c)Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party under this Section 6 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party otherwise than under such subsection.  In case any such action shall be brought against an indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to the indemnified party of its election to assume the defense thereof, the indemnifying party shall not be liable to the indemnified party under such subsection for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (plus any local counsel), approved by the Representatives in the case of paragraph (a) of this Section 6, representing the indemnified parties under such paragraph (a) who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding

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in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party.

(d)If the indemnification provided in this Section 6 shall be unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages, or liabilities, referred to in subsection (a) or (b) above, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the Underwriters on the other from the offering of the Subject Securities or (ii) if the allocation provided by the clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Subsidiary Guarantors on the one hand and the Underwriters on the other with respect to the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the Underwriters on the other shall be deemed to be in the proportion as the total net proceeds from the offering of the Subject Securities (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Subsidiary Guarantors on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company, the Subsidiary Guarantors and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to in the first sentence of this subsection (d).  The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim that is subject to this subsection (d).  Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Subject Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations to contribute as provided in this subsection (d) are several in proportion to their respective underwriting obligations and not joint.

(e)The obligations of the Company and the Subsidiary Guarantors under this Section 6 shall be in addition to any liability that the Company and the Subsidiary Guarantors

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may otherwise have and shall extend, upon the same terms and conditions, to each affiliate, partner, director, officer, employee and agent of any Underwriter and to each person, if any, who controls any Underwriter within the meaning of either the Act or the Exchange Act; and the obligations of the Underwriters under this Section 6 shall be in addition to any liability that the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company or the Subsidiary Guarantors (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company and the Subsidiary Guarantors), to each officer of the Company and the Subsidiary Guarantors who has signed the Registration Statement and to each person, if any, who controls the Company and the Subsidiary Guarantors within the meaning of either the Act or the Exchange Act.

(f)The indemnity agreements contained in this Section and in Section 7 and the representations, warranties and agreements of the Company and the Subsidiary Guarantors in Section 1 and Section 5 hereof shall survive the delivery of the Subject Securities and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

7.(a)  The Company and each Subsidiary Guarantor, jointly and severally, shall indemnify and hold harmless the firm, if any, acting as QIU against any losses, claims, damages or liabilities, joint or several, to which the QIU may become subject in its capacity as QIU, under the Act, the Exchange Act, or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Subject Securities, the Final Prospectus, the Disclosure Package or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the QIU for any legal and other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that such firm, in its capacity as QIU, shall not be entitled to indemnification pursuant to this Section 7 in respect of any losses, claims, damages or liabilities to the extent and only to the extent that it would be denied indemnification in its capacity as an Underwriter pursuant to Section 6 hereof in respect of such losses, claims, damages or liabilities.  This indemnity agreement is in addition to any liability which the Company and the Subsidiary Guarantors may otherwise have.

(b)Promptly after receipt by the QIU under subsection (a) above of notice of the commencement of any action, the QIU shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party under this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to the QIU otherwise than under such subsection.  In case any such action shall be brought against the QIU, and it shall

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notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to the QIU (who shall not, except with the consent of the QIU, be counsel to the indemnifying party), and after notice from the indemnifying party to the QIU of its election to assume the defense thereof, the indemnifying party shall not be liable to the QIU under such subsection for any legal or other expenses subsequently incurred by the QIU in connection with the defense thereof other than reasonable costs of investigation; provided, however, that if the defendants in any such action include both the QIU and the indemnifying party and the QIU shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the QIU shall have the right to select separate counsel to defend such action on behalf of itself; provided, further, that the QIU shall not have such right to select separate counsel if any Underwriter or Underwriters shall have exercised their right set forth in the proviso in Section 6(c) to select separate counsel in respect of such action, in which case, such counsel shall represent the QIU as well.  Upon receipt of notice from the indemnifying party to the QIU of its election so to appoint counsel to defend such action and approval by the QIU of such counsel, the indemnifying party will not be liable to the QIU under this Section 7 for any legal or other expenses subsequently incurred by the QIU in connection with the defense thereof unless (i) the QIU shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (plus any local counsel), approved by the QIU in the case of paragraph (a) of this Section 7, representing the QIU under such paragraph (a)), (ii) the indemnifying party shall not have employed counsel satisfactory to the QIU to represent the QIU within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the QIU at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).

(c)If the indemnification provided in this Section 7 shall be unavailable or insufficient to hold harmless the QIU under subsection (a) above then the indemnifying party shall contribute to the amount paid or payable by the QIU in its capacity as QIU as a result of the losses, claims, damages or liabilities, referred to in subsection (a) above, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the QIU on the other from the offering of the Subject Securities or (ii) if the allocation provided by the clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Subsidiary Guarantors on the one hand and the QIU on the other with respect to the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the QIU on the other shall be deemed to be in the proportion as the total net proceeds from the offering of the Subject Securities (before deducting expenses) received by the Company as set forth in the table on the cover page of the Final Prospectus bear to the portion of the underwriting discount received by the QIU which is deemed to be compensation for its services as QIU as set forth in the applicable Terms Agreement.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission

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or alleged omission to state a material fact relates to information supplied by the Company and the Subsidiary Guarantors on the one hand or the QIU on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company, the Subsidiary Guarantors and the QIU agree that it would not be just and equitable if contributions pursuant to this subsection (c) were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the first sentence of this subsection (c).  The amount paid by the QIU as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (c) shall be deemed to include, any legal or other expenses reasonably incurred by the QIU in connection with investigating or defending any such action or claim that is subject to this subsection (c).  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(d)The obligations of the Company and the Subsidiary Guarantors under this Section 7 shall be in addition to any liability that the Company and the Subsidiary Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the QIU within the meaning of either the Act or the Exchange Act.  For purposes of this Section 7, each person who controls the QIU within the meaning of either the Act or the Exchange Act shall have the same rights to contribution as the QIU.

8.The obligations of the Underwriters under this Agreement may be terminated by the Underwriters by giving notice as hereinafter specified at any time prior to the Delivery Date or the Option Delivery Date, as the case may be, if (i) any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the most recent Preliminary Prospectus and the Final Prospectus (excluding any amendment or supplement thereto), the effect of which is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering, sale or the delivery of the Subject Securities being delivered in connection therewith on the terms and in the manner contemplated in the Preliminary Prospectus, (ii) the Company shall have failed, refused or been unable, at or prior to the Delivery Date or the Option Delivery Date, as the case may be, to perform any agreement on its part to be performed hereunder, (iii) any other condition of the Underwriter’s obligations hereunder is not fulfilled, (iv) trading of the Company’s capital stock on the New York Stock Exchange or trading generally on the New York Stock Exchange or the American Stock Exchange shall have been suspended, (v) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange or the American Stock Exchange, by such Exchange or by the Commission or any other governmental authority having jurisdiction, (vi)a material disruption in securities settlement, payment or clearance services in the United States, (vii) a banking moratorium shall have been declared by Federal, Maryland or New York authorities, (viii) a downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as that term 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, (ix) the outbreak or escalation of hostilities or acts of terrorism involving the United States or the declaration by the

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United States of a national emergency or war or (x) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representatives, inadvisable or impractical to proceed with the public offering, sale or delivery of the Subject Securities.  Any such termination shall be without liability of any party to any other party with respect to Subject Securities not purchased by reason of such termination except that the provisions of Sections 6 and 7 hereof shall at all times be effective. If the Underwriters elect to terminate this Agreement as provided in this Section, the Company shall be notified promptly by the Underwriters by telephone, telex or telecopy, confirmed by letter.

9.The respective obligations of the Underwriters under this Agreement with respect to the Subject Securities are subject to the accuracy, as of the Execution Time, on the Delivery Date and the Option Delivery Date, as the case may be, of the representations and warranties of the Company contained herein, the performance by the Company and the Subsidiary Guarantors, if any, of their respective obligations hereunder, and to each of the following additional terms and conditions:

(a)The Final Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by Section 5(g) hereto, and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433.

(b)As of the Delivery Date and the Option Delivery Date, as the case may be, (i)  no stop order suspending the effectiveness of the Registration Statement nor any similar order directed to any document incorporated by reference in the Preliminary Prospectus or the Final Prospectus shall have been issued and prior to that time no stop order proceeding shall have been initiated or, to the knowledge of the Company or any Subsidiary Guarantor, threatened by the Commission, (ii) no proceeding for that purpose or pursuant to Section 8A of the Act against the Company or related to the offering has been initiated or, to the knowledge of the Company or any Subsidiary Guarantor, threatened by the Commission, (iii) no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company, (iv) no challenge shall have been made to the accuracy or adequacy of any document incorporated by reference in the Preliminary Prospectus or the Final Prospectus, (v) any request of the Commission for inclusion of additional information in the Registration Statement, the Preliminary Prospectus or the Final Prospectus or otherwise shall have been complied with, and (vi) the Company shall not have filed with the Commission any amendment or supplement to the Registration Statement, the Preliminary Prospectus or the Final Prospectus (or any document incorporated by reference therein) without the consent of the Underwriters (which consent shall not be unreasonably withheld).

(c)No Underwriter shall have discovered and disclosed to the Company on or prior to the Delivery Date that the Registration Statement, the Disclosure Package or the Final Prospectus (together with any supplement thereto) contain an untrue statement of fact which, in the opinion of Simpson Thacher & Bartlett LLP, counsel for the Underwriters, is material or

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omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(d)All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Subject Securities, the Subsidiary Guarantees, if any, the Common Stock and the Indenture and the form of the Registration Statement, the Preliminary Prospectus or the Final Prospectus (other than financial statements and other financial data) and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be satisfactory in all material respects to Simpson Thacher & Bartlett LLP, counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

(e)The Company shall have furnished to the Underwriters the opinion of Timothy J. Geckle, Senior Vice President and General Counsel of the Company addressed to the Underwriters and dated the Delivery Date or the Option Delivery Date, as the case may be, in form and substance satisfactory to the Underwriters and their counsel, to the effect that:

(i)Each of the Company and the Subsidiary Guarantors (or, if none, the significant subsidiaries (as defined in Rule 405)) has been duly incorporated or organized and is validly existing as a corporation or other entity in good standing under the laws of the jurisdiction in which it is chartered or organized, with full power and authority to own or lease its properties and conduct its business as described in the Disclosure Package, taken as a whole, and the Final Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification except where the failure to so qualify would not have a material adverse effect on the business, operations, properties or financial condition of the Company and its subsidiaries taken as a whole;

(ii)All of the issued and outstanding shares of capital stock of each Subsidiary Guarantor (or, if none, of each significant subsidiary) have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Disclosure Package, taken as a whole, and the Final Prospectus or in such opinion, all outstanding shares of capital stock of the Subsidiary Guarantors (or, if applicable, the significant subsidiaries) are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the best knowledge of such counsel, after due inquiry, any other security interests, claims, liens or encumbrances, and the Company has no subsidiaries required by Regulation S-K under the Act to be listed as a subsidiary on Exhibit 21 other than those listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011;

(iii)The Indenture has been duly authorized, executed and delivered by the Company and the Subsidiary Guarantors and duly qualified under the Trust Indenture Act and is a valid and legally binding instrument of the Company and the Subsidiary Guarantors enforceable in accordance with its terms;

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(iv)The Subject Securities are in a form contemplated by the Indenture and have been duly authorized by all necessary corporate action, have been duly executed and, assuming the due authentication and delivery thereof by the Trustee (and payment therefor by the Underwriters), are legal, valid and binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits of the Indenture;

(v)The Subsidiary Guarantees have been duly authorized by the Subsidiary Guarantors, have been duly executed and, assuming the due authentication and delivery of the Indenture and the Subject Securities by the Trustee (and payment for the Subject Securities by the Underwriters) and when endorsed on the Subject Securities in the manner provided in the Indenture, are legal, valid and binding obligations of the Subsidiary Guarantors enforceable in accordance with their terms and entitled to the benefits of the Indenture;

(vi)The statements in the Disclosure Package and the Final Prospectus under the following (or comparable) captions “Description of Notes,” “General Description of Securities—Description of Debt Securities” and “General Description of Securities—Description of Common Stock”, insofar as they purport to summarize in all material respects the provisions of documents or agreements specifically referred to therein, fairly present the information called for with respect thereto by the Rules and Regulations of the Commission;

(vii)To the best knowledge of such counsel, after due inquiry, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries of a character required to be disclosed in the Registration Statement which is not adequately disclosed in any Preliminary Prospectus and the Final Prospectus, and there is no franchise, contract or other document of a character required to be described in the Registration Statement, any Preliminary Prospectus or the Final Prospectus, or to be filed as an exhibit, which is not described or filed as required;

(viii)The Registration Statement has become effective under the Act; any required filing of the Base Prospectus, any Preliminary Prospectus and the Final Prospectus,  and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); the final term sheet, containing solely a description of final terms of the Subject Securities and the offering thereof, had been filed pursuant to Rule 433(d) within the time required by such Rule; to the best knowledge of such counsel, after due inquiry, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose or pursuant to Section 8A of the Act have been instituted or threatened, no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company, and the Registration Statement and the Final Prospectus and the documents incorporated by reference therein (other than the financial statements and other financial and statistical information contained therein as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act, the Trust Indenture Act and the Exchange Act and the respective rules thereunder;

(ix)The Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”) has been duly authorized, executed and delivered

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by the Company and the Subsidiary Guarantors; the execution, delivery and performance of the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”), the consummation of the transactions contemplated hereby, including the issuance of the Common Stock upon the conversion of the Subject Securities, compliance by the Company with the provisions of the Subject Securities and the Indenture and compliance by the Subsidiary Guarantors with the provisions of the Subsidiary Guarantees and the Indenture will not conflict with or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of its subsidiaries pursuant to the terms of, or constitute a default under, any loan agreement, indenture, mortgage, deed of trust, other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in a violation of the corporate charter or by-laws of the Company or any of the Subsidiary Guarantors (or, if none, the significant subsidiaries) or of any law, order, rule or regulation  of any court, regulatory body, administrative agency or governmental body or arbitrator known to such counsel and having jurisdiction over the Company, any of the Subsidiary Guarantors (or, if none, the significant subsidiaries) or their respective properties;

(x)No consent, authorization or order of, or filing or registration with, any court, regulatory body, administrative agency or governmental body or arbitrator is required for the execution, delivery and performance by the Company or the Subsidiary Guarantors of the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”), the consummation of the transactions contemplated hereby, compliance by the Company with the provisions of the Subject Securities and the Indenture and compliance by the Subsidiary Guarantors with the provisions of the Subsidiary Guarantees and the Indenture, except such as have been obtained under the Act, the Trust Indenture Act and the Exchange Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Subject Securities and the Subsidiary Guarantees by the Underwriters and such other approvals (specified in such opinion) as have been obtained;

(xi)No holders of securities of the Company have rights to the registration of such securities under the Registration Statement; and

(xii)The outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable; the shares of Common Stock issuable upon conversion of the Subject Securities have been duly authorized and, when issued upon conversion of the Subject Securities in accordance with the Indenture, will be validly issued, fully paid and nonassessable; the Board of Directors of the Company has duly and validly adopted resolutions reserving such shares of Common Stock for issuance upon conversion of the Subject Securities; the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Subject Securities or shares of Common Stock issuable upon conversion thereof; and the shares of Common Stock are duly listed, and admitted and authorized for trading, subject to official notice of issuance and evidence of satisfactory distribution on the New York Stock Exchange.

In addition, such opinion shall also contain a statement to the effect that while such counsel is not passing upon, and does not assume responsibility for, the accuracy, completeness or fairness of the Registration Statement, Final Prospectus or Disclosure Package (except as and

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to the extent set forth in clause (vi) above), based upon the procedures referred to in such opinion nothing has come to the attention of such counsel which leads him to believe that (i) on the Effective Date the Registration Statement contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) the Final Prospectus as of its date and as of the date of the opinion contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel will not comment as to the financial statements and schedules and other financial and statistical data or reports on internal control of financial reporting included or incorporated by reference in the Registration Statement or the Final Prospectus); or (iii) the Disclosure Package, when taken together as a whole, as of the time of the pricing of the offering of the Subject Securities, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of circumstances under which they were made, not misleading.

Such opinion may state that it is limited solely to Federal law and the laws of the State of Maryland, except that such counsel has examined (A) the corporate laws of the States of California, Indiana, Delaware, Florida, Texas and Arizona, (B) the limited liability company laws of the State of Delaware, and (C) the limited partnership laws of the State of Indiana solely for the purpose of rendering the opinions concerning the organization of the Subsidiary Guarantors, if any (other than the Subsidiary Guarantors organized under the laws of the State of Maryland), and the due authorization of the execution and delivery of the Terms Agreement and the Subsidiary Guarantees by the Subsidiary Guarantors, if any (other than the Subsidiary Guarantors organized under the laws of the State of Maryland).

(f)DLA Piper LLP (US) shall have furnished to the Underwriters their opinion, addressed to the Underwriters and dated the Delivery Date or the Option Delivery Date, as the case may be, as counsel to the Company, to the effect that:

(i)The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction in which it is chartered or organized, with full corporate power and authority to own its properties and conduct its business as described in the Disclosure Package, taken as a whole, and the Final Prospectus;

(ii)The Subsidiary Guarantors organized in Delaware or Maryland have been duly incorporated or organized and are validly existing in good standing under the laws of their respective jurisdictions in which they are organized, with full power and authority to own their respective properties and conduct their respective businesses as described in the Disclosure Package, taken as a whole, and the Final Prospectus;

(iii)The Indenture has been duly authorized, executed and delivered by the Company and the Subsidiary Guarantors and duly qualified under the Trust Indenture Act and is a valid and legally binding instrument of the Company and the Subsidiary Guarantors enforceable in accordance with its terms;

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(iv)The Subject Securities are in a form contemplated by the Indenture and have been duly authorized by all necessary corporate action, have been duly executed and, assuming the due authentication and delivery thereof by the Trustee (and payment therefor by the Underwriters) are legal, valid and binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits of the Indenture; and the Subject Securities will be convertible into Common Stock in accordance with their terms and the terms of the Indenture;

(v)The Subsidiary Guarantees have been duly authorized by the Subsidiary Guarantors, have been duly executed and, assuming the due authentication and delivery of the Indenture and the Subject Securities by the Trustee (and payment for the Subject Securities by the Underwriters) and when endorsed on the Subject Securities in the manner provided in the Indenture, are legal, valid and binding obligations of the Subsidiary Guarantors enforceable in accordance with their terms and entitled to the benefits of the Indenture;

(vi)The Registration Statement has become effective under the Act; any required filing of the Base Prospectus, any Preliminary Prospectus and the Final Prospectus,  and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); the final term sheet, containing solely a description of final terms of the Subject Securities and the offering thereof, had been filed pursuant to Rule 433(d) within the time required by such Rule; to the best knowledge of such counsel, after due inquiry, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose or pursuant to Section 8A of the Act have been instituted or threatened, no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company, and the Registration Statement and the Final Prospectus and the documents incorporated by reference therein (other than the financial statements and other financial and statistical information contained therein as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act, the Trust Indenture Act and the Exchange Act and the respective rules thereunder;

(vii)The statements made in the Disclosure Package and the Final Prospectus under the following (or comparable) captions:  “Description of Notes,” “General Description of Securities—Description of Debt Securities” and “General Description of Securities—Description of Common Stock”, insofar as they purport to summarize in all material respects the provisions of documents or agreements specifically referred to therein, fairly present the information called for with respect thereto the Rules and Regulations of the Commission;

(viii)The statements made in the Disclosure Package and the Final Prospectus under the caption “Material United States Federal Income Tax Consequences,” insofar as they purport to summarize the applicable U.S. federal income tax law or legal conclusions with respect thereto, are accurate in all material respects.

(ix)The Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”) has been duly authorized, executed and delivered by the Company and the Subsidiary Guarantors organized in Delaware or Maryland; the execution, delivery and performance of the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”), compliance by the Company with the provisions

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of the Subject Securities and the Indenture and compliance by the Subsidiary Guarantors with the provisions of the Subsidiary Guarantees or the consummation of the transactions contemplated herein, including the issuance of the Common Stock upon the conversion of the Subject Securities, or the fulfillment of the terms hereof will not conflict with, result or constitute a default (nor an event which with the notice or lapse of time, or both, would constitute a default) under the charter or by-laws of the Company or Ryland Mortgage Company (“RMC”) or any Subsidiary Guarantor organized under the laws of Delaware or Maryland or the terms of any indenture, other agreement or instrument known to such counsel and to which the Company or RMC or any Subsidiary Guarantor organized under the laws of Delaware or Maryland is a party or bound and which is material to the financial condition of the Company and its subsidiaries taken as a whole or result in a violation of any law, order or regulation known to such counsel to be applicable to the Company or RMC or any Subsidiary Guarantor organized under the laws of Delaware or Maryland of any court, regulatory body, administrative agency or governmental body or arbitrator having jurisdiction over the Company, the Subsidiary Guarantors organized under the laws of Delaware or Maryland or any of their respective properties; and no consent, authorization or order of, or filing or registration with, any court, regulatory body, administrative agency or governmental body or arbitrator is required for the execution, delivery and performance by the Company or the Subsidiary Guarantors of the Terms Agreement (including the provisions of this “Underwriting Agreement Basic Provisions”) compliance by the Company with the provisions of the Subject Securities and the Indenture and compliance by the Subsidiary Guarantors with the provisions of the Subsidiary Guarantees or the consummation of the transactions contemplated herein or the fulfillment of the terms hereof, except such as may be required by the Act, the Trust Indenture Act, the Exchange Act or state securities laws; and

(x)The Company is not and each of the Subsidiary Guarantors is not an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(xi)The shares of Common Stock are duly listed, and admitted and authorized for trading, subject to official notice of issuance and evidence of satisfactory distribution on the Stock Exchange.

In addition, such opinion shall also contain a statement to the effect that while such counsel is not passing upon, and does not assume responsibility for, the accuracy, completeness or fairness of the Registration Statement, Final Prospectus or Disclosure Package, based upon the procedures referred to in such opinion nothing has come to the attention of such counsel which leads it to believe that (i) on the Effective Date the Registration Statement contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) the Final Prospectus as of its date and as of the date of the opinion contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel will not comment as to the financial statements and schedules and other financial and statistical data or reports on internal control of financial reporting included or incorporated by reference in the Registration Statement or the Final Prospectus); or (iii) the Disclosure Package, when taken together as a whole, as of the time of the pricing of the offering of the Subject Securities, contained any untrue statement of a material fact or omitted to state any material fact

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necessary in order to make the statements therein, in the light of circumstances under which they were made, not misleading.

Any opinions given by such counsel as to enforceability, if any, may be subject to the effect of liquidation, conservatorship, insolvency, bankruptcy, reorganization, moratorium, and other similar laws generally affecting the rights of creditors, the application of equitable principles (whether in equity or at law) and the availability of equitable remedies (whether in equity or at law).

(g)The Underwriters shall have received from Simpson Thacher & Bartlett LLP, counsel for the Underwriters, such opinion or opinions, dated the Delivery Date or the Option Delivery Date, as the case may be, with respect to the issuance and sale of the Subject Securities, the Subsidiary Guarantees, the Indenture, the Registration Statement, the Disclosure Package, the Final Prospectus (together with any supplements thereto) and other related matters as the Underwriters may reasonably require, and the Company and the Subsidiary Guarantors shall have furnished to such counsel such documents as they may reasonably request for the purpose of enabling them to pass upon such matters.

(h)The Company shall have furnished to the Underwriters on the Delivery Date or the Option Delivery Date, as the case may be, a certificate, dated the Delivery Date or the Option Delivery Date, as the case may be, of its Chairman of the Board, President and Chief Executive Officer and its principal financial or accounting officer stating that:

(i)the representations, warranties and agreements of the Company in Section 1 hereof are true and correct in all material respects as of the Delivery Date or the Option Delivery Date, as the case may be; the Company has complied in all material respects with all of its agreements contained herein to be performed or complied with at or before the Delivery Date or the Option Delivery Date, as the case may be; and the conditions set forth in Section 9(a) hereof have been fulfilled in all material respects;

(ii)they have carefully examined the Registration Statement, the Disclosure Package and any supplements or amendments thereto, as well as each electronic roadshow used to offer the Subject Securities, the Final Prospectus and this Agreement and, in their opinion (A) as of its Effective Date the Registration Statement did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (B) the Final Prospectus does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (C) since the effective date of the Registration Statement there has not occurred any event required to be set forth in an amended or supplemented prospectus which has not been so set forth and (D) the Disclosure Package, when taken together as a whole, as of the time of the pricing of the offering of the Subject Securities, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of circumstances under which they were made, not misleading;

(iii)no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose or pursuant to Section 8A of the Act

26

have been instituted or, to the best of the Company’s knowledge, threatened, and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company; and

(iv)except as set forth in or contemplated in the Disclosure Package and the Final Prospectus, since the date of the most recent financial statements included or incorporated by reference in the Final Prospectus, (i) 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, and (ii) there has not been any material change, on a consolidated basis, in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries.

(i)Each Subsidiary Guarantor shall have furnished to the Underwriters on the Delivery Date a certificate, dated the Delivery Date or the Option Delivery Date, as the case may be, of its Chairman of the Board, President and Chief Executive Officer or Vice President or its Treasurer, principal financial or accounting officer stating that the representations, warranties and agreements of such Subsidiary Guarantor are true and correct in all material respects as of the Delivery Date or the Option Delivery Date, as the case may be; and such Subsidiary Guarantor has complied in all material respects with all of its agreements contained herein to be performed or complied with at or before the Delivery Date or the Option Delivery Date, as the case may be;

(j)Subsequent to the respective dates as of which information is given in the Registration Statement and the Final Prospectus, there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (k) of this Section 9 or (ii) any change, or any development involving a prospective change, in or affecting the business, properties or results of operations of the Company and its subsidiaries taken as a whole.

(k)Prior to the Delivery Date or the Option Delivery Date, as the case may be, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request.

(l)The Company shall have furnished to the Underwriters letters of Ernst & Young, addressed to the Underwriters, dated respectively as of the date of the Terms Agreement, as of the Delivery Date and as of the Option Delivery Date, as the case may be, in form and substance satisfactory to the Representatives, confirming that they are an independent registered public accounting firm within the meaning of the Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as of the respective date of such letter (or, with respect to matters involving changes or development since the respective dates as of which specified financial information is given in the Preliminary Prospectus and the Final Prospectus, as of a date not more than three days prior to the date of such letter), the conclusions and findings of such firm with respect to the financial information and other matters of the type customarily included in accountants’ “comfort letters” to underwriters with respect to financial information and other matters contained in or incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Final Prospectus.

27

(m)The shares of Common Stock issuable upon conversion thereof shall have been listed and admitted and authorized for trading on the New York Stock Exchange, and satisfactory evidence of such actions shall have been provided to the Representatives.

(n)At the Execution Time, the Company shall have furnished to the Representatives a letter substantially in the form of Exhibit A hereto from each officer and director of the Company addressed to the Representatives.

If any of the conditions specified in this Section 9 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and Simpson Thacher & Bartlett LLP, counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Delivery Date or the Option Delivery Date, as the case may be, by the Representatives.  Notice of such cancellation shall be given to the Company in writing or by telephone or telegraph confirmed in writing.

10.If the Company or the Subsidiary Guarantors shall fail to tender the Subject Securities or the Subsidiary Guarantees on the Delivery Date or the Option Delivery Date, as the case may be, or if the Underwriters shall decline to purchase the Subject Securities for any reason permitted under this Agreement (other than pursuant to Section 3 or any of clauses (iv) (other than with respect to the Company’s capital stock), (v), (vi), (vii), (ix) or (x) of Section 8 hereof), the Company shall reimburse the Underwriters for the reasonable fees and expenses of their counsel and for such other out-of-pocket expenses as shall have been incurred by them in connection with this Agreement and the proposed purchase of the Subject Securities, and upon demand the Company shall pay the full amount thereof to the Underwriters.  If this Agreement is terminated pursuant to Section 3 hereof by reason of the default of one or more Underwriters or pursuant to any of clauses (iv) (other than with respect to the Company’s capital stock), (v), (vi), (vii), (ix) or (x) of Section 8 hereof, the Company shall not be obligated to reimburse any Underwriter on account of such expenses except that the Company will continue to be liable for the payment of the expenses as set forth in Section 5(m) and with respect to any non-defaulting underwriter and the QIU as set forth in Sections 6 and 7, respectively, and shall not continue to be liable for the payment of expenses of any defaulting underwriter as set forth in Section 6.

11.The Company and the Subsidiary Guarantors shall be entitled to act and rely upon any request, consent, notice or agreement of the Underwriters.  Any notice by the Company to the Underwriters shall be sufficient if given in writing or by telegraph addressed to the Representatives at the address set forth for that purpose in the Terms Agreement, and any notice by the Underwriters to the Company shall be sufficient if given by the Representatives in writing or by telecopy addressed to the Company at 3011 Townsgate Road, Suite 200, Westlake Village, California 91361-3027, attention: General Counsel.

12.This Agreement shall be binding upon the Underwriters, the Company, the Subsidiary Guarantors and their respective successors.  This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and agreements of the Company and the Subsidiary Guarantors contained in this Agreement shall also be deemed to be for the benefit of any partner,

28

director or officer or the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Act, (b) the indemnity agreement of the Underwriters contained in Section 6 hereof shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company and (c) the indemnity agreement of the Company contained in Section 7 shall be for the benefit of the QIU.  Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

13.For purpose of this Agreement, “business day” means any day on which the New York Stock Exchange, Inc. is open for trading.

14.The Company and the Subsidiary Guarantors acknowledge and agree that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Company and the Subsidiary Guarantors with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Company, the Subsidiary Guarantors or any other person.  Additionally, neither the Representatives nor any other Underwriter is advising the Company, the Subsidiary Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Company and the Subsidiary Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the Company or the Subsidiary Guarantors with respect thereto. Any review by the Representatives or any Underwriter of the Company, the Subsidiary Guarantors and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives or such Underwriter, as the case may be, and shall not be on behalf of the Company, the Subsidiary Guarantors or any other person.

15.THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK.  THE TERMS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, AND IF EXECUTED IN MORE THAN ONE COUNTERPART THE EXECUTED COUNTERPARTS SHALL TOGETHER CONSTITUTE A SINGLE AGREEMENT.

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EXHIBIT A

[Letterhead of officer or director]

The Ryland Group, Inc.
Public Offering of Convertible Securities

May       , 2012

[Insert address of Representatives]

Ladies and Gentlemen:

This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), between The Ryland Group, Inc., a Maryland corporation (the “Company”), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of Convertible Senior Notes due 2018 (the “Convertible Notes”) of the Company.  The Convertible Notes will be convertible into shares of the common stock, $1.00 par value (the “Common Stock”), of the Company.

In order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of one or more the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 60 days after the date of the Underwriting Agreement, other than shares of Common Stock disposed of as bona fide gifts approved by one or more of the Representatives.

If for any reason the Underwriting Agreement shall be terminated prior to the Delivery Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated.

Yours very truly,

[Signature of officer or director]

  [Name and address of officer or director]

SCHEDULE 1

Final Term Sheet dated May 10, 2012 relating to the 1.625% Convertible Senior Notes due 2018, as filed pursuant to Rule 433 under the Securities Act

EX-4.2

Exhibit 4.2

EXECUTION VERSION

THE RYLAND GROUP, INC.,

as Issuer,

THE SUBSIDIARY GUARANTORS NAMED HEREIN

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

(as successor to JPMorgan Chase Bank, N.A. f/k/a Chemical Bank),

as Trustee

SEVENTH SUPPLEMENTAL INDENTURE

DATED AS OF MAY 16, 2012

TO INDENTURE

DATED AS OF JUNE 28, 1996

Relating To

1.625% Convertible Senior Notes Due 2018

TABLE OF CONTENTS

		Page
ARTICLE ONE DEFINITIONS		1
Section 1.01	Capitalized Terms	1
Section 1.02	References	2
Section 1.03	Definitions	2
Section 1.04	References to Interest	9
ARTICLE TWO GENERAL TERMS AND CONDITIONS OF THE NOTES		9
Section 2.01	Designation and Principal Amount	9
Section 2.02	Maturity	9
Section 2.03	Form and Payment	9
Section 2.04	Interest	10
Section 2.05	Transfer, Exchange and Conversion	10
Section 2.06	Purchase and Cancellation	11
ARTICLE THREE REDEMPTION AND REPURCHASE		11
Section 3.01	No Redemption	11
Section 3.02	Purchase at Option of Holders Upon a Fundamental Change	11
ARTICLE FOUR CONSOLIDATION, MERGER AND SALE OF ASSETS		13
ARTICLE FIVE CONVERSION OF NOTES		14
Section 5.01	Right to Convert	14
Section 5.02	Section 382 Limitation on Beneficial Ownership Upon Conversion	15
Section 5.03	Settlement upon Conversion	15
Section 5.04	Conversion Procedures	16
Section 5.05	Conversion Rate Adjustments	16
Section 5.06	Recapitalizations, Reclassifications and Changes to the Common Stock	25
Section 5.07	Adjustment to Conversion Rate upon Conversion upon a Make-Whole Adjustment Event	26
Section 5.08	Reserved Shares	27
Section 5.09	Trustee Adjustment Disclaimer	28
ARTICLE SIX GUARANTEE OF NOTES		28
Section 6.01	Guarantee	28
Section 6.02	Execution and Delivery of Guarantee	28
Section 6.03	Guarantee Unconditional	29

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Section 6.04	Discharge, Release and Reinstatement of Guarantee In Certain Circumstances	29
Section 6.05	Waivers	30
Section 6.06	Subordination; Subrogation	30
Section 6.07	Stay of Acceleration	30
Section 6.08	Limitation on Obligations	30
Section 6.09	Default and Enforcement	31
Section 6.10	Amendment, Etc.	32
Section 6.11	Acknowledgment	32
Section 6.12	Costs and Expenses	32
Section 6.13	No Merger or Waiver; Cumulative Remedies	32
Section 6.14	Guarantee in Addition to Other Obligations	32
Section 6.15	Severability	32
Section 6.16	Successors and Assigns	33
Section 6.17	Acknowledgement under the Trust Indenture Act	33
ARTICLE SEVEN EVENTS OF DEFAULT		33
Section 7.01	Events of Default	33
Section 7.02	Acceleration	34
Section 7.03	Additional Interest	34
Section 7.04	Suits	35
Section 7.05	Waivers	35
Section 7.06	Notice of Default	36
ARTICLE EIGHT DISCHARGE		36
Section 8.01	Discharge	36
Section 8.02	No Defeasance	37
ARTICLE NINE SUPPLEMENTAL INDENTURES		37
Section 9.01	Supplemental Indentures Without Consent of Holders	37
Section 9.02	Supplemental Indenture with Consent of Holder	38
ARTICLE TEN COVENANTS		39
Section 10.01	Reports	39
Section 10.02	Future Subsidiaries	39
ARTICLE ELEVEN MISCELLANEOUS		40
Section 11.01	Form of Notes	40
Section 11.02	Ratification of Base Indenture	40
Section 11.03	Trust Indenture Act Controls	40

ii

Section 11.04	Conflict with Indenture	40
Section 11.05	Governing Law	41
Section 11.06	Successors	41
Section 11.07	Counterparts	41
Section 11.08	Waiver of Jury Trial	41
Section 11.09	Force Majeure	41
Section 11.10	Calculations in Respect of the Notes	42
Section 11.11	Notices	42
Section 11.12	No Personal Liability of Directors, Officers, Employees and Shareholders	42

iii

SEVENTH SUPPLEMENTAL INDENTURE

SEVENTH SUPPLEMENTAL INDENTURE, dated as of May 16, 2012 (the “Supplemental Indenture”), to the Indenture (defined below) among The Ryland Group, Inc. (the “Company”), a Maryland corporation, each of the Subsidiary Guarantors named herein (the “Subsidiary Guarantors”), and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A. f/k/a Chemical Bank), as trustee (the “Trustee”).

RECITALS

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of June 28, 1996 (the “Base Indenture”), providing for the issuance from time to time of its notes and other evidences of senior debt securities, to be issued in one or more series as therein provided (“Securities”);

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 1.625% Convertible Senior Notes due 2018 (the “Notes”), the form and substance of such Notes and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Supplemental Indenture (together, the “Indenture”);

WHEREAS, pursuant to the terms of the Notes, the Subsidiary Guarantors will fully and unconditionally guarantee the obligations of the Company under the Notes and the Indenture, on a senior and unsubordinated basis (the “Subsidiary Guarantees”); and

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture and all requirements necessary to make this Supplemental Indenture a valid instrument in accordance with its terms, and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, and to make the Subsidiary Guarantees, when executed by the Subsidiary Guarantors and authenticated and delivered by the Trustee, the valid obligations of the Subsidiary Guarantors, and all acts and things necessary have been done and performed to make this Supplemental Indenture enforceable in accordance with its terms, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects.

WITNESSETH:

NOW, THEREFORE, for and in consideration of the premises contained herein, each party agrees for the benefit of each other party and for the equal and ratable benefit of the Holders, as follows:

ARTICLE ONE

DEFINITIONS

Section 1.01Capitalized Terms.  Capitalized terms used but not defined in this Supplemental Indenture shall have the meanings ascribed to them in the Base Indenture.

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Section 1.02References.  References in this Supplemental Indenture to article and section numbers shall be deemed to be references to article and section numbers of this Supplemental Indenture unless otherwise specified.

Section 1.03Definitions.  For purposes of this Supplemental Indenture, the following terms have the meanings ascribed to them as follows:

“Acquiring Person” shall have the meaning provided in the Rights Agreement.

“Additional Interest” shall have the meaning provided in Section 7.03.

“Additional Shares” has the meaning provided in Section 5.07(a).

“Base Indenture” has the meaning provided in the recitals.

“Beneficial Owner” has the meaning provided in Section 2.03.

“Business Day” means any day other than (x) a Saturday, (y) Sunday or (z) a day on which state or federally chartered banking institutions in New York, New York are not required to be open.

“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a lease that is required to be capitalized for financial reporting purposes in accordance with generally accepted accounting principles, and the amount of such obligations will be the capitalized amount thereof determined in accordance with generally accepted accounting principles.

A “Change in Control” will be deemed to have occurred if any of the following occurs after the time the Notes are originally issued:

(1)any “person” or “group” within the meaning of Section 13(d) under the Exchange Act is or becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of shares of the Company’s Voting Stock representing 50% or more of the total voting power of all outstanding classes of the Company’s Voting Stock entitled to vote generally in elections of directors, or has the power, directly or indirectly, to elect a majority of the members of the Board of Directors;

(2)the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, or other property or assets; (B) any consolidation, merger, combination or binding share exchange of the Company pursuant to which the Common Stock will be converted into, or exchanged for, cash, stock, other securities, or other property or assets; or (C) any sale, assignment, conveyance, transfer, lease or other disposition, in one transaction or a series of transactions, of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of its subsidiaries; provided that a transaction described in clause (B) above pursuant to which the Persons that “beneficially owned,” directly or indirectly, the shares of the Company’s Voting Stock immediately prior to such transaction “beneficially own,”

2

directly or indirectly, shares of Voting Stock representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction will be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction will not constitute a “Change in Control”;

(3)the first day on which a majority of the members of the Board of Directors are not Continuing Directors; or

(4)the holders of the Company’s capital stock approve any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the Indenture).

However, notwithstanding the foregoing, a “Change in Control” will not be deemed to have occurred if at least 90% of the consideration paid for the Common Stock in a transaction or transactions described under clause (2) of the definition of Change in Control above, excluding cash payments for any fractional share and cash payments made pursuant to dissenters’ appraisal rights, consists of shares of common stock traded on The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors), or will be so traded immediately following such transaction, and, as a result therefrom, such consideration becomes the Reference Property for the Notes.

“Clause A Distribution” has the meaning provided in 5.05(c)(A).

“Clause B Distribution” has the meaning provided in 5.05(c)(A).

“Clause C Distribution” has the meaning provided in 5.05(c)(A).

“Close of Business” means 5:00 p.m., New York City time.

“Closing Sale Price” of the Common Stock on any date means the closing per share sale price (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) at 4:00 p.m., New York City time, on such date as reported in composite transactions for The New York Stock Exchange or, if the Common Stock is not listed on The New York Stock Exchange, the principal U.S. national or regional securities exchange on which the Common Stock is listed for trading or, if the Common Stock is not listed on a U.S. national or regional securities exchange, as reported by OTC Markets Group Inc. at 4:00 p.m., New York City time, on such date (or in either case the then-standard closing time for regular trading on the relevant exchange or trading system). If the closing sale price of the Common Stock is not so reported, the “Closing Sale Price” will be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

“Common Stock” means the Company’s common stock, $1.00 par value per share.

3

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (i) was a member of the Board of Directors on the Issue Date, or (ii) was nominated for election or elected to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election.

“Conversion Agent” has the meaning provided in Section 2.05.

“Conversion Date” means the date a Holder complies with the relevant procedures for conversion.

“Conversion Notice” means a “Conversion Notice” in the form attached to Exhibit B attached hereto.

“Conversion Price” of a Note at any time is equal to $1,000 divided by the Conversion Rate in effect at such time.

“Conversion Rate” shall initially be 31.2168 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as provided in Article Five.

“Depositary” has the meaning provided in Section 2.03.

“Dividend Threshold Amount” has the meaning provided in Section 5.05(d).

“Effective Date” has the meaning provided in Section 5.07(b).

“Event of Default” has the meaning provided in Section 7.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of the Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

“Expiration Date” has the meaning provided in Section 5.05(e).

“Expiration Time” has the meaning provided in Section 5.05(e).

“Financial Services Segment” means the business segment of the Company and its Subsidiaries engaged in mortgage banking (including mortgage origination, loan servicing, mortgage brokerage and title and escrow businesses), master servicing and related activities, including, without limitation, a Subsidiary which facilitates the financing of mortgage loans and mortgage-backed securities and the securitization of mortgage-backed bonds and other related activities, which segment currently consists principally of the activities of Ryland Mortgage Company and its Subsidiaries but excludes the Limited Purpose Subsidiaries.

4

“Financial Services Subsidiary” means a Subsidiary engaged in mortgage banking (including mortgage origination, loan servicing, mortgage brokerage and title and escrow businesses), master servicing and related activities, including, without limitation, a Subsidiary which facilitates the financing of mortgage loans and mortgage-backed securities and the securitization of mortgage-backed bonds and other related activities.

“Fundamental Change” means the occurrence of a Change in Control or a Termination of Trading.

“Fundamental Change Notice” has the meaning provided in Section 3.02(c).

“Fundamental Change Purchase Date” has the meaning provided in Section 3.02(a).

“Fundamental Change Purchase Notice” has the meaning provided in Section 3.02(b).

“Fundamental Change Purchase Price” has the meaning provided in Section 3.02(a).

“Fundamental Change Purchase Right” has the meaning provided in Section 3.02(a).

“Guaranteed Obligations” has the meaning provided in Section 6.01.

“Holder” means a Person in whose name a Note is registered on the Security Registrar’s books.

“Homebuilding Segment” means the business segment of the Company and its Subsidiaries engaged in the construction and sale of single-family attached and unattached dwellings and related activities, including all activities of the Company outside the Financial Services Segment but excluding the Limited-Purpose Subsidiaries.

“Homebuilding Subsidiaries” means Subsidiaries of the Company included within the Homebuilding Segment.

“Indebtedness” means:

(1)any liability of any person (A) for borrowed money, or (B) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a current liability arising in the ordinary course of business), or (C) for the payment of money relating to a Capitalized Lease Obligation or (D) for all Redeemable Capital Stock valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;

(2)any liability of others described in the preceding clause (1) that such person has guaranteed or that is otherwise its legal liability;

(3)all Indebtedness referred to in (but not excluded from) clauses (1) and (2) above of other persons and all dividends of other persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be

5

secured by) any Security Interest upon or in property (including, without limitation, accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such Indebtedness; and

(4)any amendment, supplement, modification, deferral, renewal, extension or refunding or any liability of the types referred to in clauses (1), (2) and (3) above.

“Indenture” has the meaning provided in the recitals.

“Interest Payment Date” has the meaning provided in Section 2.04.

“Issue Date” means May 16, 2012.

“Limited-Purpose Subsidiaries” means subsidiaries of the Company included within the Limited-Purpose Subsidiaries Segment.

“Limited-Purpose Subsidiaries Segment” means the business segment of the Company and its Subsidiaries which facilitates, through special-purpose entities created or existing solely for such purpose, the financing of mortgage loans and mortgage-backed securities and the securitization of mortgage loans and other related activities.

“Make-Whole Adjustment Event” means (i) any Change in Control (determined after giving effect to any exceptions or exclusions from such definition but without giving effect to the proviso in clause (2) of the definition thereof) and (ii) any Termination of Trading.

“Make-Whole Conversion Period” has the meaning provided in Section 5.07(a).

“Maturity Date” means May 15, 2018.

“Maximum Liability” has the meaning provided in Section 6.08.

“Non-Paying Guarantor” has the meaning provided in Section 6.08.

“Non-Recourse Indebtedness” means the Company’s or any of the Company’s Subsidiaries’ Indebtedness or other obligations secured by a lien on property to the extent that the liability for the Indebtedness or other obligations is limited to the security of the property without liability for any deficiency, including liability by reason of any agreement between the Company or any Subsidiary to provide additional capital or maintain the financial condition of or otherwise support the credit of the Subsidiary incurring the Indebtedness.

“Notes” has the meaning provided in the recitals.

“Open of Business” means 9:00 a.m., New York City time.

“Paying Guarantor” has the meaning provided in Section 6.08.

“Permitted Exchange” has the meaning provided in the definition of Termination of Trading.

6

“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

“Pro Rata Share” has the meaning provided in Section 6.08.

“Publicly Traded Debt Securities” means any issue of debt securities of the Company or any of its Homebuilding Subsidiaries originally issued in a public offering registered with the Commission or in an offering pursuant to Rule 144A under the Securities Act and of which issue at least $20.0 million aggregate principal amount is outstanding.

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other property or in which Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, statute, contract or otherwise).

“Redeemable Capital Stock” means any capital stock of the Company or any Subsidiary that, either by its terms, by the terms of any security into which it is convertible or exchangeable or otherwise, (1) is or upon the happening of an event or passage of time would be required to be redeemed on or prior to the final stated maturity of the securities or (2) is redeemable at the option of the holder thereof at any time prior to such final stated maturity or (3) is convertible into or exchangeable for debt securities at any time prior to such final stated maturity.

“Reference Property” has the meaning provided in Section 5.06.

“Regular Record Date” has the meaning provided in Section 2.04.

“Relevant Distribution” has the meaning provided in Section 5.05(c).

“Rights Agreement” means the Company’s stockholders rights agreement, dated December 17, 2008, as amended.

“Section 382 Limitation” has the meaning provided in Section 5.02.

“Securities” has the meaning provided in the recitals.

“Security Interest” means any mortgage, pledge, lien, encumbrance or other security interest which secures the payment or performance of an obligation.

“Settlement Amount” means the shares of Common Stock (along with the cash payment in lieu of any fractional share) the Company is required to deliver upon conversion of the Notes.

“Spin-Off” has the meaning provided in Section 5.05(c)(B).

“Stock Price” has the meaning provided in Section 5.07(b).

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“Subsidiary” means any corporation of which at the time of determination by the Company, directly and/or indirectly through one or more Subsidiaries, owns more than 50% of the shares of Voting Stock.

“Subsidiary Guarantees” has the meaning provided in the recitals.

“Subsidiary Guarantor” means each direct and indirect Wholly-Owned Subsidiary of the Company that is a Homebuilding Subsidiary on the Issue Date that guarantees any Publicly Traded Debt Securities and any direct or indirect Wholly-Owned Subsidiary of the Company that is a Homebuilding Subsidiary created or acquired by the Company after the Issue Date that becomes a guarantor of any Publicly Traded Debt Securities.

“Supplemental Indenture” has the meaning provided in the preamble.

“Termination of Trading” means the Common Stock (or Reference Property into which the Notes are convertible) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors, a “Permitted Exchange”), or the announcement by any such exchange on which the Common Stock (or such Reference Property) is trading that the Common Stock (or such Reference Property) will no longer be listed or admitted for trading and will not be immediately relisted or readmitted for trading on any Permitted Exchange.

“Trading Day” means a day on which (i) The New York Stock Exchange or, if the Common Stock is not listed on The New York Stock Exchange, the principal other U.S. national or regional securities exchange on which the Common Stock is then listed is open for trading, in each case, with a scheduled closing time of 4:00 p.m., New York City time, or the then-standard closing time for regular trading on the relevant exchange or market and (ii) a Closing Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock is not so listed, any Business Day.

“Trigger Event” has the meaning provided in Section 5.05(c)(A).

“Valuation Period” has the meaning provided in Section 5.05(c).

“Voting Stock” means any class or classes of capital stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of any person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).

“Wholly Owned Subsidiary” of a Person means (i) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by any such Person or one or more Wholly Owned Subsidiaries of such Person, or by such Person and one or more Wholly Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company, association, joint venture or similar business organization all of the ownership interests (having ordinary voting power) of which shall at the time be owned or controlled, directly or indirectly, by any such Person or one or more Wholly Owned Subsidiaries of such Person, or by such Person and one or more Wholly Owned Subsidiaries of such Person.

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Section 1.04References to Interest.  Any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to Section 7.03. Any express mention of the payment of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

ARTICLE TWO

GENERAL TERMS AND CONDITIONS OF THE NOTES

Section 2.01Designation and Principal Amount.

The Notes are hereby authorized and are designated the “1.625% Convertible Senior Notes due 2018.”  The Notes issued on the Issue Date pursuant to the terms of this Indenture will be in an aggregate principal amount of $225,000,000, which amount shall be set forth in a written order of the Company for the authentication and delivery of the Notes pursuant to Section 303 of the Base Indenture.  In addition, the Company may from time to time, without the consent of the Holders, reopen the Indenture and issue additional Notes under the Indenture with the same terms (other than the date of issuance and, in some cases, the date from which interest will initially accrue) as the Notes issued on the Issue Date in an unlimited aggregate principal amount; provided that if any such additional Notes are not fungible with the Notes issued on the Issue Date for U.S. federal income tax purposes, such additional Notes will have a separate CUSIP number. The Notes issued on the Issue Date and any such additional Notes would be treated as a single class for all purposes under the Indenture and would vote together as one class on all matters with respect to the Notes.

Section 2.02Maturity.

The principal amount of the Notes will be payable on the Maturity Date.

Section 2.03Form and Payment.

The Notes will be issued as global notes, in fully registered book-entry form without coupons in denominations of $1,000 and integral multiples of $1,000.

Principal and/or interest, if any, on the global notes representing the Notes will be made to The Depository Trust Company (the “Depositary”).

The global notes representing the Notes will be deposited with, or on behalf of, the Depositary and will be registered in the name of the Depositary or a nominee of the Depositary.  No global note may be transferred except as a whole by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or such nominee to a successor of the Depositary or a nominee of such successor.

So long as the Depositary or its nominee is the registered owner of a global note, the Depositary or its nominee, as the case may be, will be the sole Holder of the Notes represented thereby for all purposes under the Indenture.  Except as otherwise provided herein, each actual purchaser of each Note represented by a global note (“Beneficial Owner”) will not be entitled to

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receive physical delivery of certificated Notes and will not be considered the Holders thereof for any purpose under the Indenture, and no global note representing the Notes shall be exchangeable or transferable.  Accordingly, each Beneficial Owner must rely on the procedures of the Depositary and, if such Beneficial Owner is not a participant, on the procedures of the participant through which such Beneficial Owner owns its interest in order to exercise any rights of a Holder under such global note or the Indenture.

The global notes representing the Notes will be exchangeable for certificated Notes of like tenor and terms and of differing authorized denominations aggregating a like principal amount, only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the global debt securities and a successor to the Depositary is not appointed within 90 days, (ii) the Depositary ceases to be a clearing agency registered under the Exchange Act and a successor to the Depository is not appointed by the Company within 90 days, (iii) the Company in its sole discretion determines that the global notes shall be exchangeable for certificated Notes and notifies the Trustee in writing of such determination or (iv) there shall have occurred and be continuing an Event of Default under the Indenture with respect to the Notes and any Beneficial Owner requests that its Notes be issued in physical, certificated form.  Upon any such exchange, the certificated Notes shall be registered in the names of the Beneficial Owners of the global notes representing the Notes, which names shall be provided by the Depositary’s relevant participants (as identified by the Depositary) to the Trustee.  In such event the Company will execute, and subject to Section 303 of the Base Indenture, the Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Company, will authenticate and deliver the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the global notes in exchange for such global notes.  Upon the exchange of the global notes for such Notes in definitive registered form without coupons, in authorized denominations, the global notes shall be cancelled by the Trustee.  Such Notes in definitive registered form issued in exchange for the global notes shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee in writing.  The Trustee shall deliver such Notes to the Depositary for delivery to the Persons in whose names such Notes are so registered.

Section 2.04Interest.

The Notes shall bear interest at a rate equal to 1.625% per year.  Interest on the Notes shall accrue from May 16, 2012, or from the most recent Interest Payment Date to which interest has been paid or duly provided upon for the Notes, as the case may be.  Interest on the Notes shall be payable semi-annually in arrears on May 15 and November 15, commencing November 15, 2012 (each an “Interest Payment Date”), to the persons in whose names the Notes are registered at the Close of Business on May 1 and November 1 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date (a “Regular Record Date”).

Section 2.05Transfer, Exchange and Conversion.

In addition to its obligations under Section 305 of the Base Indenture, the Company shall also cause to be kept at one of the offices or agencies maintained pursuant to Section 1002 of the

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Base Indenture an office where Notes may be presented for conversion (the “Conversion Agent”).

The Company initially appoints the Trustee as Paying Agent, Security Registrar and Conversion Agent for the Notes.

The Company reserves the right to:

(i)vary or terminate the appointment of the Security Registrar, Paying Agent or Conversion Agent;

(ii)appoint additional Paying Agents or Conversion Agents; or

(iii)approve any change in the office through which any Security Registrar or any Paying Agent or Conversion Agent acts.

The Company shall not be required to transfer or exchange any Note surrendered for purchase or conversion except for any portion of that Note not being purchased or converted, as the case may be.

Section 2.06Purchase and Cancellation.

Each of the Security Registrar, Paying Agent and Conversion Agent (if other than the Trustee) will forward to the Trustee any Notes surrendered to it by Holders for transfer, exchange, payment or conversion. All Notes delivered to the Trustee shall be cancelled promptly by the Trustee in the manner provided in the Base Indenture and may not be reissued or resold. No Notes shall be authenticated in exchange for any Notes cancelled, except as provided in the Base Indenture.

The Company may, to the extent permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to the Company), purchase Notes in the open market or by tender offer at any price or by private agreement. The Company shall cause any Notes so purchased (other than Notes purchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation, and such Notes will no longer be considered “Outstanding” under the Indenture upon their repurchase.

ARTICLE THREE

REDEMPTION AND REPURCHASE

Section 3.01No Redemption. Article Eleven of the Base Indenture shall not apply to the Notes. The Company may not redeem the Notes prior to maturity. In addition, no sinking fund is provided for the Notes.

Section 3.02Purchase at Option of Holders Upon a Fundamental Change.

(a)If a Fundamental Change occurs, each Holder will have the option to require the Company to purchase for cash (a “Fundamental Change Purchase Right”) all or any portion of

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such Holder’s Notes that is equal to $1,000, or an integral multiple of $1,000, on the day of the Company’s choosing that is not less than 20 or more than 35 Business Days after the occurrence of such Fundamental Change (such day, the “Fundamental Change Purchase Date”) at a purchase price (the “Fundamental Change Purchase Price”) equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest to, but excluding, the Fundamental Change Purchase Date (unless the Fundamental Change Purchase Date is after a Regular Record Date and on or prior to the Interest Payment Date to which it relates, in which case interest accrued to the Interest Payment Date will be paid to Holders as of the preceding Regular Record Date, and the price the Company is required to pay to the Holder surrendering the Note for purchase will be equal to 100% of the principal amount of Notes subject to purchase and will not include any accrued and unpaid interest).

(b)A Holder must deliver written notice (a “Fundamental Change Purchase Notice”) of its exercise of this Fundamental Change Purchase Right to the Paying Agent during the period between the delivery of the Fundamental Change Notice and the Close of Business on the Business Day immediately preceding the Fundamental Change Purchase Date in the form set forth in the global note attached as Exhibit B to this Indenture, in each case duly completed and signed, with appropriate signature guarantee, specifying the Notes for which the Fundamental Change Purchase Right is being exercised. If a Holder wishes to withdraw this election, it must provide a written notice of withdrawal to the Paying Agent at any time until the Close of Business on the Business Day immediately preceding the Fundamental Change Purchase Date. If the Notes are not in certificated form, the notice given by each Holder (and any withdrawal notice) must comply with applicable DTC procedures.

(c)The Company shall mail to the Trustee and to each Holder a written notice of a Fundamental Change (the “Fundamental Change Notice”) within five Business Days after the occurrence of such Fundamental Change and issue a press release announcing the occurrence of such Fundamental Change (and make a press release available on its website). This Fundamental Change Notice shall state certain specified information, including:

(i)the events causing the Fundamental Change;

(ii)the effective date of the Fundamental Change, and whether the Fundamental Change is a Make-Whole Adjustment Event;

(iii)the last date on which a Holder may exercise the Fundamental Change Purchase Right;

(iv)the Fundamental Change Purchase Price;

(v)the Fundamental Change Purchase Date;

(vi)the Conversion Rate and any adjustments to the Conversion Rate, and the procedures required for exercise of a Holder’s right to convert its Notes;

(vii)the procedures required for exercise of the Fundamental Change Purchase Right, and the procedures required for withdrawal of any such exercise; and

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(viii)the name and address of the Paying Agent and Conversion Agent.

No failure of the Company to give a Fundamental Change Notice shall limit any Holder’s right pursuant hereto to exercise their Fundamental Change Purchase Right.

(d)The Company shall be required to purchase Notes that have been validly surrendered for purchase and not withdrawn on the Fundamental Change Purchase Date. The Holder will receive payment of the Fundamental Change Purchase Price on the later of the Fundamental Change Purchase Date and the time of book-entry transfer or the delivery of such Holder’s Notes.  If the Paying Agent holds money sufficient to pay the Fundamental Change Purchase Price of the Notes for which a Fundamental Change Purchase Notice has been submitted and not validly withdrawn, then:

(i)such Notes shall cease to be outstanding and interest will cease to accrue (whether or not book-entry transfer of the Notes is made or whether or not the Note is delivered to the Paying Agent) and

(ii)all other rights of the relevant Holders of such Notes shall terminate (other than the right to receive the Fundamental Change Purchase Price and, if the Fundamental Change Purchase Date is after a Regular Record Date and on or prior to the related Interest Payment Date, the right of the Holder on such Regular Record Date to receive the related interest payment).

(e)No Notes may be purchased by the Company at the option of Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the Fundamental Change Purchase Date (except in the case of an acceleration resulting from a default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Notes). The Paying Agent shall promptly return to the respective Holders thereof any Notes held by it during the continuance of such an acceleration.

(f)In connection with any Fundamental Change Purchase Right, the Company shall, to the extent applicable:

(i)comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act, to the extent such rules as applicable;

(ii)file a Schedule TO or any successor or similar schedule, if required, under the Exchange Act; and

(iii)otherwise comply with all applicable federal and state securities laws.

ARTICLE FOUR

CONSOLIDATION, MERGER AND SALE OF ASSETS

Article Eight of the Base Indenture is hereby replaced by the following:

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The Company shall not consolidate with, or merge with or into, enter into any combination or binding share exchange with, another Person or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any successor Person unless:

(i)the successor Person, if any, is a corporation organized and existing under the laws of the United States of America or any state thereof or the District of Columbia and expressly assumes by supplemental indenture all the obligations of the Company under the Notes and the Indenture;

(ii)if as a result of such transaction the Notes become convertible into common stock or other securities issued by a third party (subject to the provisions set forth under Section 5.03), such third party fully and unconditionally guarantees all the obligations of the Company or such successor Person under the Notes and the Indenture;

(iii)immediately after giving effect to the transaction, no default or Event of Default with respect to the Notes shall have occurred and be continuing; and

(iv)the Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate to the foregoing effect and an Opinion of Counsel (which may rely upon such Officer’s Certificate as to the absence of defaults and Events of Default) stating that the proposed transaction and such supplemental indenture will, upon consummation of the proposed transaction, comply with this Indenture.

Upon any such consolidation, merger, combination, binding share exchange, or sale, assignment, conveyance, transfer, lease or other disposition, the resulting, surviving or transferee corporation (if not the Company) shall succeed to the Company, and may exercise every right and power of the Company, under this Indenture, and the Company shall be discharged from its obligations under the Notes and this Indenture except in the case of any such lease. For purposes of the foregoing, any sale, assignment, conveyance, transfer, lease or other disposition of the assets of one or more of the Company’s Subsidiaries that would, if the Company had held such assets directly, have constituted the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, will be treated as such under this Indenture.

ARTICLE FIVE

CONVERSION OF NOTES

Section 5.01Right to Convert.  (a)  At any time prior to the Close of Business on the Business Day immediately preceding the Maturity Date, a Holder may convert all or any portion of its Notes at the Conversion Rate in effect on the Conversion Date. A Holder may convert fewer than all of such Holder’s Notes so long as the Notes converted are in an integral multiple of $1,000 principal amount.

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(b)Upon conversion of a Note, a Holder will not receive any additional cash payment for accrued and unpaid interest, if any, unless such Holder is the Holder on a Regular Record Date and such conversion occurs between such Regular Record Date and the Interest Payment Date to which it relates as described in Section 5.01(c), and the Company will not adjust the Conversion Rate to account for accrued and unpaid interest. Except as described in Section 5.01(c), the Company’s settlement of conversions pursuant to Section 5.03 shall be deemed to satisfy the Company’s obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the Conversion Date.

(c)Holders at the Close of Business on a Regular Record Date will receive payment of interest payable on the corresponding Interest Payment Date notwithstanding the conversion of such Notes at any time after the Close of Business on the applicable Regular Record Date. Notes surrendered for conversion by a Holder after the Close of Business on any Regular Record Date but prior to the next Interest Payment Date must be accompanied by payment of an amount equal to the interest that will be payable on the Notes; provided, however, that no such payment shall be required (1) if the Company has specified a Fundamental Change Purchase Date following a Fundamental Change that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, (2) with respect to any Notes surrendered for conversion following the Regular Record Date immediately preceding the Maturity Date or (3) only to the extent of overdue interest, if any overdue interest exists at the time of conversion with respect to such Notes.

(d)The Company shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of the shares of the Common Stock upon conversion of the Notes, unless the tax is due because the Holder requests such shares of Common Stock to be issued in a name other than the Holder’s name, in which case the Holder shall pay the tax.

Section 5.02Section 382 Limitation on Beneficial Ownership Upon Conversion. Notwithstanding Section 5.01, no Holder will be entitled to receive shares of Common Stock upon conversion, and any purported delivery of shares of Common Stock upon conversion of Notes shall be void and of no effect, to the extent (but only to the extent) that such receipt or delivery would cause such converting Holder to become an Acquiring Person, unless such converting Holder has received prior approval of the Board of Directors (the “Section 382 Limitation”). If any delivery of shares of Common Stock owed to a Holder upon conversion of Notes is not made, in whole or in part, as a result of the Section 382 Limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such shares of Common Stock as promptly as practicable after such delivery would not result in such converting Holder being an Acquiring Person and such converting Holder gives notice thereof to the Company.

Section 5.03Settlement upon Conversion.  (a)  Upon conversion, the Company shall deliver to Holders in respect of each $1,000 principal amount of Notes being converted a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the Close of Business on the relevant Conversion Date. No fractional shares will be issued upon conversion. Instead, the Company will pay cash in lieu of any fractional share based on the Closing Sale Price of the Common Stock on the relevant Conversion Date.

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(b)Each conversion will be deemed to have been effected as to any Notes surrendered for conversion on the Conversion Date, and with respect to the shares of Common Stock that are issuable upon such conversion, the Person in whose name the certificate or certificates for such shares will be registered shall be treated as the holder of record of such shares as of the Close of Business on the Conversion Date.

(c)The Company shall deliver the consideration due in respect of any conversion on the third Business Day immediately following the relevant Conversion Date.

Section 5.04Conversion Procedures.

(a)(1)If a Note is represented by a certificated security, to exercise its right of conversion, a Holder must:

(i)complete and manually sign the Conversion Notice, with the appropriate signature guarantee, or facsimile of the Conversion Notice and deliver the completed Conversion Notice (which shall be irrevocable) to the Conversion Agent;

(ii)surrender the certificated Note to the Conversion Agent;

(iii)furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent;

(iv)pay all transfer or similar taxes if required pursuant to Section 5.01(d); and

(v)pay funds equal to interest payable on the next Interest Payment Date required by Section 5.01(c), or

(2)If a Note is represented by a global security, to exercise its right of conversion, a Holder must comply with Section 5.04(a)(1)(iv) and Section 5.04(a)(1)(v) above and the Depositary’s procedures for converting a beneficial interest in a global security.

(b)If a Holder has submitted its Notes for purchase upon a Fundamental Change, such Holder may only convert its Notes if it withdraws its Fundamental Change Purchase Notice prior to the Fundamental Change Purchase Date, pursuant to Section 3.02(b). If such Holder’s Notes are submitted for purchase upon a Fundamental Change, such Holder’s right to withdraw its Fundamental Change Purchase Notice and convert its Notes that are subject to purchase will terminate at the Close of Business on the Business Day immediately preceding the Fundamental Change Purchase Date.

Section 5.05Conversion Rate Adjustments.  The Conversion Rate shall be subject to adjustment from time to time, without duplication, upon the occurrence of any of the following events:

(a)If the Company issues solely shares of Common Stock as a dividend or distribution on all or substantially all of its shares of Common Stock, or if the Company subdivides or combines Common Stock, the Conversion Rate shall be adjusted based on the following formula:

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CR = CR0  ×	OS
	OS0

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such dividend or distribution, or immediately prior to the Open of Business on the effective date of such subdivision or combination of Common Stock, as the case may be;

CR = the Conversion Rate in effect immediately after the Close of Business on the Record Date for such dividend or distribution, or immediately after the Open of Business on the effective date of such subdivision or combination of Common Stock, as the case may be;

OS0` = the number of shares of Common Stock outstanding immediately prior to the Close of Business on the Record Date for such dividend or distribution, or immediately prior to the Open of Business on the effective date of such subdivision or combination of Common Stock, as the case may be; and

OS = the number of shares of Common Stock that would be outstanding immediately after giving effect to such dividend or distribution, or immediately after the effective date of such subdivision or combination of Common Stock, as the case may be.

Any adjustment made under this Section 5.05(a) shall become effective immediately after the Close of Business on the Record Date for such dividend or distribution, or immediately after the Open of Business on the effective date of such subdivision or combination of Common Stock, as the case may be.  If such dividend, distribution, subdivision or combination described in this Section 5.05(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution or to effect such subdivision or combination, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or subdivision or combination had not been announced.

(b)If an Ex-Dividend Date occurs for a distribution to all or substantially all holders of Common Stock of any rights, options or warrants entitling such holders for a period of not more than 60 calendar days from the announcement date for such distribution to subscribe for or purchase shares of Common Stock, at a price per share less than the average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date for such distribution, the Conversion Rate shall be increased based on the following formula:

CR = CR0  ×	OS0 + X
	OS0 + Y

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such distribution;

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CR = the Conversion Rate in effect immediately after the Close of Business on the Record Date for such distribution;

OS0 = the number of shares of Common Stock outstanding immediately prior to the Close of Business on the Record Date for such distribution;

X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Closing Sale Prices of Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date for such distribution.

Any increase made under this Section 5.05(b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the Close of Business on the Record Date for such distribution. To the extent that shares of Common Stock are not delivered after the exercise of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.  If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if the Record Date for such distribution had not occurred.

For purposes of this Section 5.05(b), in determining whether any rights, options or warrants entitle the Holders to subscribe for or purchase shares of Common Stock at a price that is less than the average of the Closing Sale Prices of the Common Stock over the applicable 10 consecutive Trading Day period, there shall be taken into account any consideration the Company receives for such rights, options or warrants and any amount payable on exercise thereof, with the value of such consideration if other than cash to be determined in good faith by the Board of Directors.

(c)(A)If an Ex-Dividend Date occurs for a distribution (a “Relevant Distribution”) of shares of the Company’s capital stock, evidences of the Company’s indebtedness or other assets or property of the Company or rights, options or warrants to acquire the Company’s capital stock or other securities, to all or substantially all holders of the Common Stock (excluding (i) dividends or distributions and rights, options or warrants as to which an adjustment was effected under Section 5.05(a) or Section 5.05(b) above; (ii) dividends or distributions paid exclusively in cash covered under Section 5.05(d); and (iii) Spin-Offs), then the Conversion Rate shall be increased based on the following formula:

CR = CR0 ×	SP0
	SP0 – FMV

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such distribution;

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CR = the Conversion Rate in effect immediately after the Close of Business on the Record Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined in good faith by the Board of Directors) of the shares of capital stock, evidences of indebtedness, assets or property or rights, options or warrants distributed with respect to each outstanding share of Common Stock as of the Open of Business on the Ex-Dividend Date for such distribution.

Any increase made under the above portion of this Section 5.05(c) shall become effective immediately after the Close of Business on the Record Date for such distribution. No adjustment pursuant to the above formula will result in a decrease of the Conversion Rate. However, if such distribution is not so paid or made, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock, without having to convert its Notes, the amount and kind of the Relevant Distribution that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for the distribution.

For purposes of this Section 5.05(c)(A) (and subject in all respects to Section 5.05(f)):

(1)Rights, options or warrants distributed by the Company to all or substantially all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s capital stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (a “Trigger Event”):

(i)are deemed to be transferred with such shares of the Common Stock;

(ii)are not exercisable; and

(iii)are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 5.05(c) (and no adjustment to the Conversion Rate under this Section 5.05(c) shall be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 5.05(c).

(2)If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the Issue Date, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be

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deemed to be the date of distribution and the Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof).

(3)In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event of the type described in the immediately preceding clause (2) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 5.05(c) was made:

(i)in the case of any such rights, options or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, upon such final redemption or repurchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution pursuant to Section 5.05(d), equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase; and

(ii)in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

(4)For purposes of Section 5.05(a), Section 5.05(b) and this Section 5.05(c), if any dividend or distribution to which this Section 5.05(c) is applicable includes one or both of:

(i)a dividend or distribution of shares of Common Stock to which Section 5.05(a) is applicable (the “Clause A Distribution”); or

(ii)an issuance of rights, options or warrants to which Section 5.05(b) is applicable (the “Clause B Distribution”),

then:

(1)such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 5.05(c) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 5.05(c) with respect to such Clause C Distribution shall then be made; and

(2)the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 5.05(a) and Section 5.05(b) with respect thereto shall then be made, except that, if determined by the Company (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the Close of Business on the Record Date or

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immediately prior to the Open of Business on such effective date” within the meaning of Section 5.05(a) or “outstanding immediately prior to the Close of Business on the Record Date” within the meaning of Section 5.05(b).

(B)With respect to an adjustment pursuant to this Section 5.05(c) where there has been an Ex-Dividend Date for a dividend or other distribution on the Common Stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

CR = CR0 ×	FMV + MP0
	MP0

where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for the Spin-Off;

CR = the Conversion Rate in effect immediately after the Close of Business on the Record Date for the Spin-Off;

FMV = the average of the Closing Sale Prices of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock (determined by reference to the definition of “Closing Sale Price” as if references therein to Common Stock were to such capital stock or similar equity interest) over the first 10 consecutive Trading Day period commencing on, and including, the effective date for the Spin-Off (such period, the “Valuation Period”); and

MP0 = the average of the Closing Sale Prices of the Common Stock over the Valuation Period.

The adjustment to the Conversion Rate under the preceding paragraph of this Section 5.05(c) shall be determined on the last day of the Valuation Period but will be given effect immediately after the Close of Business on the Record Date for the Spin-Off.  In respect of any conversion during the Valuation Period for any Spin-Off, references within this Section 5.05(c)(B) related to 10 Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the effective date for such Spin-Off to, but excluding, the relevant Conversion Date.

(d)If an Ex-Dividend Date occurs for a cash dividend or distribution to all or substantially all holders of the Common Stock (other than (i) any dividend or distribution in connection with the Company’s liquidation, dissolution or winding up and (ii) a regular cash dividend that does not exceed $0.03 per share per quarter (the “Dividend Threshold Amount”)), the Conversion Rate shall be increased based on the following formula:

CR = CR0 ×	SP0 – T
	SP0 – C

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where,

CR0 = the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such distribution;

CR = the Conversion Rate in effect immediately after the Close of Business on the Record Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution;

T = the Dividend Threshold Amount; provided that if the dividend or distribution is not a regular quarterly cash dividend, the Dividend Threshold Amount will be deemed to be zero; and

C = the amount in cash per share of Common Stock the Company pays, or distributes, to all or substantially all holders of the Common Stock.

The Dividend Threshold Amount is subject to adjustment in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment will be made to the Dividend Threshold Amount for any adjustment to the Conversion Rate made under this Section 5.05(d).

Any increase made under this Section 5.05(d) shall become effective immediately after the Close of Business on the Record Date for such dividend or distribution. No adjustment pursuant to the above formula will result in a decrease of the Conversion Rate. However, if any dividend or distribution described in this Section 5.05(d) is declared but not so paid or made, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of Common Stock, without having to convert its Notes, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such cash dividend or distribution.

(e)If the Company or any of its Subsidiaries makes a payment in respect of a tender or exchange offer for the Common Stock and, if the cash and value of any other consideration included in the payment per share of Common Stock exceeds the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate shall be increased based on the following formula:

CR = CR0 ×	AC + (OS x SP)
	OS0 x SP

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where,

CR0 = the Conversion Rate in effect immediately prior to the Open of Business on the Trading Day next succeeding the Expiration Date;

CR = the Conversion Rate in effect immediately after the Open of Business on the Trading Day next succeeding the Expiration Date;

AC = the aggregate value of all cash and any other consideration (as determined in good faith by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS0 = the number of shares of Common Stock outstanding immediately prior to the time (the “Expiration Time”) such tender or exchange offer expires (prior to giving effect to such tender or exchange offer);

OS = the number of shares of Common Stock outstanding immediately after the Expiration Time (after giving effect to such tender or exchange offer); and

SP = the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

The adjustment to the Conversion Rate under this Section 5.05(e) shall be determined at the Close of Business on the tenth Trading Day immediately following, but excluding, the Expiration Date but shall be given effect at the Open of Business on the Trading Day next succeeding the Expiration Date. In respect of any conversion during the 10 Trading Days commencing on the Trading Day next succeeding the Expiration Date, references within this Section 5.05(e) to 10 Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the Expiration Date to, but excluding, the relevant Conversion Date. No adjustment pursuant to the above formula will result in a decrease of the Conversion Rate.

(f)To the extent that the Company has a rights plan in effect upon conversion of the Notes, the Holders shall receive, in addition to the Common Stock received in connection with such conversion, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Stock, in which case the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock, shares of the Company’s capital stock, evidences of indebtedness or other assets or property as described in Section 5.05(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

(g)To the extent permitted by applicable law and applicable listing rules of The New York Stock Exchange and any other securities exchange on which the Company’s securities are then listed, (i) the Company is permitted to increase the Conversion Rate of the Notes by any amount for a period of at least 20 Business Days so long as the increase is irrevocable during the

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period and the Board of Directors determines that such increase would be in the Company’s best interest and (ii) the Company may (but is not required to) increase the Conversion Rate to avoid or diminish income tax to holders of the Common Stock or rights to purchase shares of the Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar events. The Company must give at least 15 days’ prior notice of any such increase in the Conversion Rate.

(h)Adjustments to the Conversion Rate will be calculated to the nearest 1/10,000th of a share of Common Stock. Notwithstanding anything in this Section 5.05 to the contrary, the Company shall not be required to adjust the Conversion Rate unless the adjustment would result in a change of at least 1% of the Conversion Rate. However, the Company shall carry forward any adjustments that are less than 1% of the Conversion Rate and make such carried forward adjustments (1) when the cumulative net effect of all adjustments not yet made will result in a change of at least 1% of the Conversion Rate or (2) regardless of whether the aggregate adjustment is less than 1%, (i) upon any required purchases of the Notes in connection with a Fundamental Change and (ii) upon any conversion of Notes.

(i)Whenever any provision of this Indenture requires the Company to calculate the Closing Sale Prices or the Stock Price over a span of multiple days, the Board of Directors shall make appropriate adjustments to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Record Date, the Ex-Dividend Date, the Expiration Date or the Effective Date of the event occurs, at any time during the period from which such Closing Sale Prices or Stock Prices are to be calculated.

(j)No adjustment to the Conversion Rate need be made for a given transaction if Holders of the Notes will be entitled to participate in that transaction, without conversion of the Notes, on the same terms and at the same time as a holder of a number of shares of Common Stock equal to the principal amount of a Holder’s Notes divided by $1,000 and multiplied by the Conversion Rate would be entitled to participate.

(k)If the Company issues rights, options or warrants that are only exercisable upon the occurrence of certain triggering events, then (i) the Company will not adjust the Conversion Rate pursuant to the above provisions until the earliest of these triggering events occurs; and (ii) the Company will readjust the Conversion Rate to the extent any of these rights, options or warrants are not exercised before they expire.

(l)If the Company adjusts the Conversion Rate pursuant to the above provisions, the Company shall deliver to the Conversion Agent a certificate setting forth the Conversion Rate, detailing the calculation of the Conversion Rate and describing the facts upon which the adjustment is based. In addition, the Company shall issue a press release containing the relevant information (and make the press release available on its website).

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Section 5.06Recapitalizations, Reclassifications and Changes to the Common Stock. In the event of:

(a)any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination);

(b)a consolidation, merger, combination or binding share exchange involving the Company; or

(c)a sale, assignment, conveyance, transfer, lease or other disposition to another Person of the Company’s property and assets as an entirety or substantially as an entirety, in each case, in which holders of Common Stock are entitled to receive cash, securities or other property for their shares of Common Stock (“Reference Property”), the Company or the successor or purchasing company, as the case may be, shall execute with the Trustee a supplemental indenture, providing that, at and after the effective time of such transaction, Holders of each $1,000 principal amount of Notes will be entitled to convert their Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive upon such transaction. The supplemental indenture shall also provide for anti-dilution and other adjustments that are as nearly equivalent as possible to the adjustments described under Section 5.05. If the Reference Property in respect of any such transaction includes shares of stock, securities or other property or assets of a company other than the successor or purchasing corporation, as the case may be, in such transaction, such other company shall also execute such supplemental indenture, and such supplemental indenture shall contain such additional provisions to protect the interests of the Holders, including the right of Holders to require the Company to purchase their Notes upon a Fundamental Change as described in Section 3.02, as the Board of Directors reasonably considers necessary by reason of the foregoing. If the Notes become convertible into Reference Property, the Company shall notify the Trustee and issue a press release containing the relevant information (and make the press release available on its website).

For purposes of the foregoing, the type and amount of consideration that holders of the Common Stock are entitled to in the case of recapitalizations, reclassifications, changes of the Common Stock, consolidations, mergers, combinations, binding share exchanges, sales, assignments, conveyances, transfers, leases or other dispositions that cause the Common Stock to be converted into or exchanged for the right to receive more than a single type of consideration because the holders of Common Stock have the right to elect the type of consideration they receive will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election. The Company shall notify Holders of the weighted average as soon as practicable after such determination is made. The Company shall not become a party to any such transaction unless its terms are consistent with the foregoing.

If the Notes become convertible into Reference Property, the Company will adjust the Dividend Threshold Amount based on the number of shares of common stock comprising the Reference Property and (if applicable) the value of any non-stock consideration comprising the Reference Property. If the Reference Property is composed solely of non-stock consideration, the Dividend Threshold Amount will be zero.

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Section 5.07Adjustment to Conversion Rate upon Conversion upon a Make-Whole Adjustment Event.

(a)If a Holder elects to convert its Notes at any time from, and including, the Effective Date of a Make-Whole Adjustment Event to, and including, the Business Day immediately preceding the related Fundamental Change Purchase Date, or if a Make-Whole Adjustment Event does not also constitute a Fundamental Change, the 40th scheduled Trading Day immediately following the Effective Date of such Make-Whole Adjustment Event (the “Make-Whole Conversion Period”), the Conversion Rate will be increased by an additional number of shares of Common Stock (these shares being referred to as the “Additional Shares”) pursuant to Section 5.07(b) below. The Company will notify the Holders, the Trustee and the Conversion Agent of the anticipated Effective Date of such Make-Whole Adjustment Event and issue a press release as soon as practicable after the Company first determines the anticipated Effective Date of such Make-Whole Adjustment Event (and make the press release available on its website). The Company will use its commercially reasonable efforts to give notice to Holders of the anticipated Effective Date for a Make-Whole Adjustment Event at least 30 scheduled Trading Days prior to the anticipated Effective Date.

(b)The number of Additional Shares, if any, by which the Conversion Rate will be increased for conversions in connection with a Make-Whole Adjustment Event will be determined by reference to the table below, based on the date on which the Make-Whole Adjustment Event occurs or becomes effective (the “Effective Date”) and (1) the price paid per share of the Common Stock in the Change in Control in the case of a Make-Whole Adjustment Event described in clause (2) of the definition of “Change in Control,” in the event that the Common Stock is acquired for cash, or (2) the average of the Closing Sale Prices of the Common Stock over the five Trading Day period ending on the Trading Day immediately preceding the Effective Date of such other Make-Whole Adjustment Event, in the case of any other Make-Whole Adjustment Event. The amount determined under the first or second clause of the preceding sentence, as applicable, is referred to as the “Stock Price.”

The Stock Prices set forth in the first row of the table below (i.e., column headers) and the number of Additional Shares in the table below will be adjusted as of any date on which the Conversion Rate of the Notes is adjusted pursuant to Section 5.05. The adjusted Stock Prices will equal the Stock Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares will be adjusted in the same manner and at the same time as the Conversion Rate pursuant to Section 5.05.

The following table sets forth the number of Additional Shares by which the Conversion Rate for each $1,000 principal amount of Notes shall be increased based on the Stock Price and the Effective Date:

	Stock Price
Effective Date	$22.48	$25.00	$30.00	$35.00	$40.00	$50.00	$60.00	$70.00	$80.00	$90.00	$100.00	$120.00
May 16, 2012	13.2671	11.2861	7.9823	5.8718	4.4519	2.7382	1.7984	1.2373	0.8807	0.6427	0.4776	0.2730
May 15, 2013	13.2671	11.2200	7.7888	5.6246	4.1889	2.4920	1.5886	1.0645	0.7400	0.5286	0.3851	0.2118

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	Stock Price
Effective Date	$22.48	$25.00	$30.00	$35.00	$40.00	$50.00	$60.00	$70.00	$80.00	$90.00	$100.00	$120.00
May 15, 2014	13.2671	11.0630	7.4874	5.2701	3.8271	2.1708	1.3261	0.8559	0.5757	0.3994	0.2833	0.1480
May 15, 2015	13.2671	10.7718	7.0251	4.7572	3.3232	1.7500	1.0002	0.6097	0.3908	0.2603	0.1781	0.0871
May 15, 2016	13.2671	10.2994	6.3251	4.0098	2.6159	1.2041	0.6099	0.3365	0.1996	0.1254	0.0820	0.0370
May 15, 2017	13.2671	9.5212	5.1637	2.8149	1.5533	0.5049	0.1864	0.0797	0.0384	0.0190	0.0081	0.0008
May 15, 2018	13.2671	8.7832	2.1165	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

(c)The exact Stock Price and Effective Date may not be set forth in the table in Section 5.07(b), in which case if the Stock Price is:

(i)between two Stock Prices in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares will be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates based on a 365-day year, as applicable;

(ii)in excess of $120.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), the Conversion Rate will not be increased; and

(iii)less than $22.48 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), the Conversion Rate will not be increased.

(d)Notwithstanding anything herein to the contrary, the Company may not increase the Conversion Rate to more than 44.4839 shares per $1,000 principal amount of Notes, provided that the Company will adjust such number of shares for the same events for which the Company will adjust the Conversion Rate pursuant to Section 5.05.

Section 5.08Reserved Shares.  The Company shall at all times reserve out of its authorized but unissued Common Stock a sufficient number of shares of Common Stock to permit the conversion, in accordance herewith, of all of the Notes (assuming, for such purposes, that at the time of computation of such number of shares, all such Notes would be converted by a single Holder). The shares of Common Stock due upon conversion of a global note shall be delivered by the Company in accordance with the Depositary’s customary practices.

All shares of Common Stock issued upon conversion of the Notes shall be validly issued, fully paid and non-assessable and shall be free of preemptive or similar rights and free of any lien or adverse claim that arises from the action or inaction of the Company.

The Company shall comply with all securities laws regulating the offer and delivery of shares of Common Stock upon conversion of the Notes and shall list such shares on each national securities exchange or automated quotation system on which the shares of Common Stock are listed on the applicable Conversion Date.

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Section 5.09Trustee Adjustment Disclaimer.

The Trustee has no duty to determine when an adjustment under this Article Five should be made, how it should be made or what it should be.  The Trustee has no duty to determine whether a supplemental indenture need be entered into or whether any provisions of any supplemental indenture are correct.  The Trustee shall not be accountable for and makes no representation as to the validity or value of any securities or assets issued upon conversion of the Notes.  The Trustee shall not be responsible for making any calculations hereunder nor the Company’s failure to comply with this Article Five.  Each Conversion Agent (other than the Company or an Affiliate of the Company) shall have the same protection under this Section 5.09 as the Trustee.

ARTICLE SIX

GUARANTEE OF NOTES

Section 6.01Guarantee.

Subject to Section 6.08, each of the Subsidiary Guarantors hereby jointly and severally, absolutely and unconditionally guarantees, as primary obligor and not as surety, the full and punctual payment (whether at stated maturity, upon acceleration or early termination or otherwise, and at all times thereafter, at the time and place and in the manner provided for herein and in the Base Indenture) and performance of the Notes and all other amounts due from the Company under this Indenture to each Holder and to the Trustee (collectively with respect to each series of Notes, the “Guaranteed Obligations”).  Upon failure by the Company to pay punctually any such amount, each of the Subsidiary Guarantors agrees that it shall forthwith on demand pay to the Trustee for the benefit of the Holders of the Notes, the amount not so paid at the place and in the manner specified herein and in the Base Indenture.  This Article Six is a continuing guaranty of payment and not of collection.  Each of the Subsidiary Guarantors waives any right to require any of the Holders to sue the Company, any other guarantor, or any other Person obligated for all or any part of the Guaranteed Obligations, or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

The Subsidiary Guarantees with respect to a Note are not convertible and shall automatically terminate when that Note is converted into Common Stock.

Section 6.02Execution and Delivery of Guarantee.

To further evidence the Subsidiary Guarantee set forth in Section 6.01, each Subsidiary Guarantor hereby agrees to execute and deliver to the Trustee a Subsidiary Guarantee in substantially the form of Exhibit A hereto with respect to the Notes.  Such Subsidiary Guarantee shall be executed on behalf of each Subsidiary Guarantor by either manual or facsimile signature of an officer of each Subsidiary Guarantor, each of whom, in each case, shall have been duly authorized to so execute by all requisite corporate or equivalent organizational action.  The validity and enforceability of any Subsidiary Guarantee shall not be affected by the fact that it is not affixed to any Note or Notes.

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Section 6.03Guarantee Unconditional.

Subject to Section 6.08, the obligations of each of the Subsidiary Guarantors hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (1) any extension, renewal, settlement, compromise, waiver or release in respect of any of the Guaranteed Obligations, by operation of law or otherwise, or any obligation of any other guarantor of any of the Guaranteed Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Guaranteed Obligations; (2) any modification or amendment of or supplement hereto or to the Indenture; (3)  any change in the corporate existence, structure or ownership of the Company or any other guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company, or any other guarantor of the Guaranteed Obligations, or its assets or any resulting release or discharge of any obligation of the Company or any other guarantor of any of the Guaranteed Obligations; (4) the existence of any claim, setoff or other rights which the Subsidiary Guarantors may have at any time against the Company or any other guarantor of any of the Guaranteed Obligations, whether in connection herewith or any unrelated transactions; (5) any invalidity or unenforceability relating to or against the Company, or any other guarantor of any of the Guaranteed Obligations, for any reason related hereto or to the Indenture or any provision of applicable law or regulation purporting to prohibit the payment by the Company, or any other guarantor of the Guaranteed Obligations, of the principal of or interest on any Note or any other amount payable by the Company hereunder or under the Indenture; (6) any law, regulation or order of any jurisdiction, or any other event affecting any term of any Guaranteed Obligation or any Holder’s rights with respect thereto; or (7) any other act or omission to act or delay of any kind by the Company, any other Subsidiary Guarantor of the Guaranteed Obligations or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of any Subsidiary Guarantor’s obligations hereunder.

Section 6.04Discharge, Release and Reinstatement of Guarantee In Certain Circumstances.

(1)Subject to Sections 6.04(2), each of the Subsidiary Guarantor’s obligations hereunder with respect to the Notes shall remain in full force and effect until all Guaranteed Obligations with respect to the Notes shall have been indefeasibly paid in full.  If at any time any payment of the principal of or interest on any Note or any other amount payable by the Company or any other party hereunder or under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each of the Subsidiary Guarantor’s obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

(2)A Subsidiary Guarantor shall be automatically and unconditionally released from its Subsidiary Guarantee (i) if it no longer guarantees any other Publicly Traded Debt Securities (other than by reason of payment under any guarantee of any such Publicly Traded Debt Securities), (ii) if as a result of the sale or other disposition of its capital stock, it ceases to be a Subsidiary of the Company, (iii) upon a sale or other disposition of all or substantially all of its assets, or (iv) upon a merger or consolidation of a Subsidiary Guarantor with a Person other than the Company or another Subsidiary Guarantor.

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The Trustee shall, at the sole cost and expense of the Company and upon receipt an Opinion of Counsel that the provisions of Sections 6.04(2) have been complied with, deliver an appropriate instrument evidencing such release upon receipt of a request by the Company accompanied by an Officers’ Certificate certifying as to the compliance with Sections 6.04(2).  Any Subsidiary Guarantor not so released remains liable for the full amount of principal of and interest on the Notes and the other obligations of the Company hereunder as provided in this Article Six.

Section 6.05Waivers.

Each of the Subsidiary Guarantors irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company, any other guarantor of any of the Guaranteed Obligations, or any other Person.

Section 6.06Subordination; Subrogation.

Each of the Subsidiary Guarantors hereby subordinates to the Guaranteed Obligations all Indebtedness or other liabilities of the Company or of any other Subsidiary Guarantor to such Subsidiary Guarantor.  Each of the Subsidiary Guarantors hereby further agrees not to assert any right, claim or cause of action, including, without limitation, a claim for subrogation, reimbursement, indemnification or otherwise, against the Company arising out of or by reason of this Article Six or the obligations hereunder, including, without limitation, the payment or securing or purchasing of any of the Guaranteed Obligations by any of the Subsidiary Guarantors unless and until the Guaranteed Obligations are indefeasibly paid in full.

Section 6.07Stay of Acceleration.

If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms hereof or the Indenture shall nonetheless be payable by each of the Subsidiary Guarantors hereunder forthwith on demand by the Holders.

Section 6.08Limitation on Obligations.

(1)The provisions of this Article Six are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Subsidiary Guarantor under this Article Six would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Subsidiary Guarantor’s liability under this Article Six, then, notwithstanding any other provision of this Article Six to the contrary, the amount of such liability shall, without any further action by the Subsidiary Guarantors or the Holders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Subsidiary Guarantor’s “Maximum Liability”).  This Section 6.08(1) with respect to the Maximum Liability of the Subsidiary Guarantors is intended solely to preserve the rights of the Holders to the maximum extent not subject to avoidance under applicable law, and neither the Subsidiary Guarantor nor any other person or entity shall have

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any right or claim under this Section 6.08(1) with respect to the Maximum Liability, except to the extent necessary so that the obligations of the Subsidiary Guarantors hereunder shall not be rendered voidable under applicable law.

(2)Each of the Subsidiary Guarantors agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Subsidiary Guarantor, and may exceed the aggregate Maximum Liability of all other Subsidiary Guarantors, without impairing this Article Six or affecting the rights and remedies of the Holders hereunder.  Nothing in this Section 6.08(2) shall be construed to increase any Subsidiary Guarantor’s obligations hereunder beyond its Maximum Liability.

(3)In the event any Subsidiary Guarantor (a “Paying Guarantor”) shall make any payment or payments under this Article Six or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Article Six, each other Subsidiary Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Pro Rata Share” of such payment or payments made, or losses suffered, by such Paying Guarantor.  For the purposes hereof, each Non-Paying Guarantor’s “Pro Rata Share” with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Company after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Subsidiary Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Subsidiary Guarantors, the aggregate amount of all monies received by such Subsidiary Guarantors from the Company after the date hereof (whether by loan, capital infusion or by other means).  Nothing in this Section 6.08(3) shall affect any Subsidiary Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Subsidiary Guarantor’s Maximum Liability).  Each of the Subsidiary Guarantors covenants and agrees that its right to receive any contribution under this Article Six from a Non-Paying Guarantor shall be subordinate and junior in right of payment to all the Guaranteed Obligations.  The provisions of this Section 6.08(3) are for the benefit of both the Holders and the Subsidiary Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.

Section 6.09Default and Enforcement.

If any Subsidiary Guarantor fails to pay in accordance with Section 6.01, the Trustee may proceed in its name as trustee hereunder in the enforcement of the guarantee of any such Subsidiary Guarantor and such Subsidiary Guarantor’s obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from such Subsidiary Guarantor the obligations.

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Section 6.10Amendment, Etc.

No amendment, modification or waiver of any provision of this Supplemental Indenture relating to any Subsidiary Guarantor or consent to any departure by any Subsidiary Guarantor or any other Person from any such provision will in any event be effective unless it is signed by such Subsidiary Guarantor and the Trustee.

Section 6.11Acknowledgment.

Each Subsidiary Guarantor hereby acknowledges communication of the terms of this Supplemental Indenture, the Base Indenture and the Notes and consents to and approves of the same.

Section 6.12Costs and Expenses.

Each Subsidiary Guarantor shall pay on demand by the Trustee any and all costs, fees and expenses (including, without limitation, legal fees and disbursements) incurred by the Trustee, its agents, advisors and counsel or any of the Holders in enforcing any of their rights under any Subsidiary Guarantee.

Section 6.13No Merger or Waiver; Cumulative Remedies.

No Subsidiary Guarantee shall operate by way of merger of any of the obligations of a Subsidiary Guarantor under any other agreement, including, without limitation, this Supplemental Indenture.  No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under the Indenture or the Notes, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under the Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges in the Subsidiary Guarantee and under this Supplemental Indenture, the Notes and any other document or instrument between a Subsidiary Guarantor and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Section 6.14Guarantee in Addition to Other Obligations.

The obligations of each Subsidiary Guarantor under its Subsidiary Guarantee and this Supplemental Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Supplemental Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them.

Section 6.15Severability.

Any provision of this Article Six which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Supplemental Indenture and this Article Six.

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Section 6.16Successors and Assigns.

Each Subsidiary Guarantee shall be binding upon and inure to the benefit of each Subsidiary Guarantor and the Trustee and the other Holders and their respective successors and permitted assigns, except that no Subsidiary Guarantor may assign any of its obligations hereunder or thereunder.

Section 6.17Acknowledgement under the Trust Indenture Act.

Each Subsidiary Guarantor acknowledges that, by virtue of its Subsidiary Guarantee, it is becoming an “obligor” on indenture securities under the Trust Indenture Act.

ARTICLE SEVEN

EVENTS OF DEFAULT

Section 7.01Events of Default. The first paragraph of Section 501 of the Base Indenture is hereby replaced by the following:

Each of the following shall constitute an “Event of Default” under this Indenture:

(i)the Company fails to pay the principal of any Note when due;

(ii)the Company fails to deliver the Settlement Amount owing upon conversion of any Note within 5 calendar days;

(iii)the Company fails to pay any interest on any Note when due, and such failure continues for 30 calendar days;

(iv)the Company fails to pay the Fundamental Change Purchase Price of any Note when due;

(v)the Company fails to provide timely notice of a Fundamental Change or a Make-Whole Adjustment Event in accordance with the terms of this Indenture;

(vi)the Company fails to perform any other covenant required of it in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clauses (i) through (v) above) and such failure continues for 60 calendar days after notice is given in accordance with this Indenture;

(vii)the occurrence of any event that results in the acceleration of any of the Company’s or its Subsidiaries’ Indebtedness, other than Non-Recourse Indebtedness, that has an outstanding principal amount of $10 million or more in the aggregate;

(viii)a default in the payment of any principal or interest in respect of any of the Company’s or its Subsidiaries’ Indebtedness, other than Non-Recourse Indebtedness, that has an outstanding principal amount of $20 million or

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more and the continuation of that default for ten Business Days from the date the principal or interest payment became due and payable, after giving effect to any applicable grace period provided for in the documents governing the Indebtedness;

(ix)the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case under Bankruptcy Law, as now or hereafter constituted, or a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; and

(x)the commencement by the Company of a voluntary case under the Bankruptcy Law, as now or hereafter constituted, or the consent by it to the entry of an order for relief in an involuntary case under any such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of its creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

Section 7.02Acceleration.  The following paragraph shall replace the first paragraph of Section 502 of the Base Indenture:

If an Event of Default with respect to the Notes, other than an Event of Default pursuant to Section 7.01(ix) or (x), occurs and is continuing, then in every case the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes may declare the principal amount of the Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified portion) shall become immediately due and payable. If an Event of Default with respect to the Notes pursuant to Sections 7.01(ix) or (x) occurs, the principal amount of the Notes and accrued and unpaid interest, if any, shall automatically become immediately due and payable.

Section 7.03Additional Interest.  Notwithstanding anything else in this Indenture to the contrary, if the Company so elects, the sole remedy under the Indenture for an Event of Default relating to (i) the Company’s failure to file with the Trustee pursuant to Section 314(a)(1) of the Trust Indenture Act any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or (ii) the Company’s failure to comply with its reporting obligations to the Trustee and the Commission, pursuant to Section 10.01, will, for the 180 days after the occurrence of such an Event of Default, consist exclusively

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of the right to receive additional interest on the Notes at an annual rate equal to 0.50% of the aggregate principal amount of the Notes (“Additional Interest”) to, but not including, the 181st day thereafter (or, if applicable, the earlier date on which the Event of Default relating to the reporting obligations is cured or waived). Any such Additional Interest will be payable in the same manner and on the same dates as the stated interest payable on the Notes. If the Event of Default is continuing on the 181st day after an Event of Default relating to a failure to comply with the reporting obligations described above first occurs, the Notes will be subject to acceleration as provided in Article Five of the Base Indenture and Article Seven of this Supplemental Indenture. The provisions of this Indenture described in this paragraph will not affect the rights of Holders of Notes in the event of the occurrence of any other Events of Default.

In order to elect to pay Additional Interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the Company’s failure to comply with the reporting obligations set forth in clauses (i) or (ii) of the immediately preceding paragraph, the Company must notify all Holders and the Trustee and Paying Agent of such election on or before the Close of Business on the fifth Business Day prior to the date on which such Event of Default would otherwise occur. Upon the Company’s failure to timely give such notice or pay Additional Interest, the Notes will be immediately subject to acceleration as provided above and in Section 502 of the Base Indenture and Section 7.02 of this Supplemental Indenture.

Section 7.04Suits.  The following shall be added to the end of Section 507 of the Base Indenture:

However, the limitations of Section 507 of the Base Indenture do not apply to a suit instituted by a Holder for the enforcement of payment of the principal of or interest on any Note on or after the applicable due date, the right to convert the Note or to receive the consideration due upon conversion or the right of a Beneficial Owner to exchange its beneficial interest in a global security representing Notes for a physical note if an Event of Default has occurred and is continuing, in each case, in accordance with this Indenture.

Section 7.05Waivers.  The following shall replace the first paragraph of Section 513 of the Base Indenture:

The Holders of not less than a majority of the aggregate principal amount of outstanding Notes may waive any default or Event of Default unless:

(i)the Company fails to pay the principal of or any interest on any Note when due;

(ii)the Company fails to deliver the consideration due upon conversion of any Note within the time period required by this Indenture; or

(iii)the Company fails to comply with any of the provisions of this Indenture the modification of which would require the consent of the Holder of each outstanding Note affected.

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Section 7.06Notice of Default.  Section 602 of the Base Indenture shall be replaced with the following:

Within 90 days after the occurrence and continuation of any default under this Indenture with respect to the Notes that is known to the Trustee, the Trustee shall transmit to all Holders notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that except in the case of a default in the payment of the principal of (or premium, if any) or interest, if any, on any Note, or a default in the delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders; and provided, further, that in the case of any default of the character specified in Section 7.01(iv), no such notice to Holders shall be given until at least 30 days after notice has been given to the Company.  For the purpose of this Section 7.06, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Notes.

Payments of the Fundamental Change Purchase Price, principal and interest that are not made when due will accrue interest per annum at the then-applicable interest rate plus one percent from the required payment date.

ARTICLE EIGHT

DISCHARGE

Section 8.01Discharge.

Section 401 of the Base Indenture is hereby replaced as follows:

This Supplemental Indenture shall upon Company Request cease to be of further effect  (except as to any surviving rights of registration of transfer or exchange of  the Notes expressly provided for, rights under Section 306 of the Base Indenture, and the right to receive payment pursuant to Section 402(a) of the Base Indenture), and the Trustee on Company Request, and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Supplemental Indenture, when

(1)either

(A)all Notes theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 of the Base Indenture and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003 of the Base Indenture) have been delivered to the Trustee for cancellation; or

(B)all such Notes not theretofore delivered to the Trustee for cancellation

(i)have become due and payable, or

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(ii)will become due and payable at their Stated Maturity within one year, or

(iii)are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and

the Company, in the case of (i), (ii), or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount in cash and/or (in the case of conversion) shares of Common Stock sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, if any, to the date of such deposit (in the case of Notes which have become due and payable) or to the Stated Maturity, at any Fundamental Change Purchase Date or otherwise or has satisfied the Company’s conversion obligations upon conversion (and determination of related Settlement Amounts), as the case may be; provided, however, in the event a petition for relief under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or state bankruptcy, insolvency or other similar law, is filed with respect to the Company within 91 days after the deposit and the Trustee is required to return the deposited money to the Company, the obligations of the Company under this Supplemental Indenture with respect to such Notes shall not be deemed terminated or discharged;

(2)the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

(3)the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided or relating to the satisfaction and discharge of this Supplemental Indenture have been complied with.

Section 8.02No Defeasance.  Section 403 of the Base Indenture shall not apply to the Notes.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 9.01Supplemental Indentures Without Consent of Holders.

Section 901 of the Base Indenture shall be replaced with the following:

Without the consent of any Holder, the Company, when authorized by a Board Resolution or Officers’ Certificate, the Subsidiary Guarantors and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(i)cure any ambiguity, omission, defect or inconsistency that does not adversely affect Holders of the Notes;

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(ii)provide for the assumption by a successor corporation of the Company’s obligations under this Indenture;

(iii)add Subsidiary Guarantees with respect to the Notes;

(iv)secure the Notes;

(v)add to the Company’s covenants for the benefit of the Holders or surrender any right or power conferred upon the Company;

(vi)make any change that does not adversely affect the rights of any Holder;

(vii)comply with any requirement of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act; or

(viii)conform the provisions of this Indenture to the “Description of Notes” section in the preliminary prospectus supplement dated May 10, 2012 relating to the offering of the Notes, as supplemented by the related pricing term sheet dated May 10, 2012.

Section 9.02Supplemental Indenture with Consent of Holder.

The first paragraph of Section 902 of the Base Indenture shall be replaced with the following:

With the consent of the Holders of a majority in principal amount of the outstanding Notes affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution or Officers’ Certificate, the Subsidiary Guarantors and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Note affected thereby,

(i)change the stated maturity of the principal of or any interest on the Notes;

(ii)reduce the principal amount of or interest on the Notes;

(iii)reduce the amount of principal payable upon acceleration of the maturity of the Notes;

(iv)change the currency of payment of principal of or interest on the Notes or change any Note’s place of payment;

(v)impair the right of any Holder to receive payment of principal of and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on, or with respect to, the Notes;

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(vi)modify the provisions with respect to the Fundamental Change Purchase Right of the Holders pursuant to Section 3.02 of this Indenture in a manner adverse to Holders of Notes;

(vii)change the ranking of the Notes;

(viii)adversely affect the right of Holders to convert Notes, or reduce the Conversion Rate; or

(ix)modify provisions with respect to modification, amendment or waiver (including waiver of Events of Default), except to increase the percentage required for modification, amendment or waiver or to provide for consent of each affected Holder of Notes.

ARTICLE TEN

COVENANTS

Section 10.01Reports.

Section 704(1) of the Base Indenture is replaced with the following:

(1)So long as any Notes are outstanding, the Company shall (i) file with the Commission within the time periods prescribed by its rules and regulations and (ii) furnish to the Trustee and the Holders within 15 days after the date on which the Company would be required to file the same with the Commission pursuant to its rules and regulations (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), all quarterly and annual financial information required to be contained in Forms 10-Q and 10-K and, with respect to the annual consolidated financial statements only, a report thereon by the Company’s independent auditors. The Company shall not be required to file any report or other information with the Commission if the Commission does not permit such filing, although such reports will be required to be furnished to the Trustee. Documents filed by the Company with the Commission via the EDGAR system will be deemed to have been furnished to the Trustee and the Holders as of the time such documents are filed via EDGAR; and

The following shall be added to the end of Section 704 of the Base Indenture:

(5)Within 30 days after the occurrence thereof, the Company shall deliver to the Trustee written notice of any events that would constitute defaults, their status and what action the Company is taking or proposes to take in respect thereof.

Section 10.02Future Subsidiaries.

The Company shall promptly secure the execution and delivery to the Trustee of a Subsidiary Guarantee in substantially the form of Exhibit A hereto with respect to the Notes, from each Subsidiary whether now existing or formed and organized after the date hereof, if such Subsidiary (a) is a Wholly Owned Subsidiary of the Company, (b) is included in the Homebuilding Segment and (c) guarantees any Publicly Traded Debt Securities of the Company,

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or guarantees obligations of any other Subsidiary as a guarantor of any indebtedness of the Company; provided that a Subsidiary whose sole purpose is to serve as a joint venturer, partner, member or shareholder in a joint venture, partnership, limited liability company or corporation that includes one or more joint venturers, partners, members or shareholders that are not Affiliates of the Company shall not be required to deliver a Subsidiary Guarantee.  Each such Subsidiary that does not deliver a Subsidiary Guarantee on the date hereof shall execute and deliver a Subsidiary Guarantee in accordance with Section 6.02 within 30 days after it meets the criteria set forth in the preceding sentence and the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in the Base Indenture and this Supplemental Indenture relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.  Thereafter, such Subsidiary shall (unless released in accordance with the terms hereof) be a Subsidiary Guarantor for all purposes hereof with respect to the Notes.

ARTICLE ELEVEN

MISCELLANEOUS

Section 11.01Form of Notes.

The Notes and the Trustee’s Certificates of Authentication to be endorsed thereon are to be substantially in the form of Exhibit B, which form is hereby incorporated in and made a part of this Supplemental Indenture.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Supplemental Indenture, and the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.

Section 11.02Ratification of Base Indenture.

The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.

Section 11.03Trust Indenture Act Controls.

If any provision hereof limits, qualifies or conflicts with the duties imposed by Section 310 through 317 of the Trust Indenture Act, the imposed duties shall control.

Section 11.04Conflict with Indenture.

To the extent not expressly amended or modified by this Supplemental Indenture, the Base Indenture shall remain in full force and effect.  If any provision of this Supplemental Indenture relating to the Notes is inconsistent with any provision of the Base Indenture, the provision of this Supplemental Indenture shall control.

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Section 11.05Governing Law.

THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE, THE NOTES OR THE SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  The Company and each of the Subsidiary Guarantors submits to the jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, City of New York, and of the United States District Court for the Southern District of New York, in any action or proceeding to enforce any of their obligations under this Supplemental Indenture, and agrees not to seek a transfer of any such action or proceeding on the basis of inconvenience of the forum or otherwise (but neither the Company nor any of the Subsidiary Guarantors shall be prevented from removing any such action or proceeding from a state court to the United States District Court for the Southern District of New York).  The Company and each of the Subsidiary Guarantors agree that process in any such action or proceeding may be served upon it by registered mail or in any other manner permitted by the rules of the court in which the action or proceeding is brought.

Section 11.06Successors.

All agreements of the Company in the Base Indenture, this Supplemental Indenture and the Notes shall bind its successors.  All agreements of the Subsidiary Guarantors in this Supplemental Indenture and in the Subsidiary Guarantee shall bind their successors.  All agreements of the Trustee in the Base Indenture and this Supplemental Indenture shall bind its successors.

Section 11.07Counterparts.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 11.08Waiver of Jury Trial.

EACH OF THE COMPANY, THE SUBSIDIARY GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Section 11.09Force Majeure.

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are

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consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.  In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 11.10Calculations in Respect of the Notes. The Company and its agents shall be responsible for making the calculations called for under this Indenture and the Notes. These calculations include, but are not limited to, determinations of the Closing Sale Price of the Common Stock, any adjustments to the Conversion Rate, the consideration deliverable in respect of any conversion and accrued interest payable on the Notes. The Company will make all these calculations in good faith and, absent manifest error, the Company’s calculations will be final and binding on the Holders. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder upon the request of that Holder.

Section 11.11Notices. Except as otherwise provided in this Indenture, notice to registered Holders shall be given to the addresses as they appear in the Security Register. Notices shall be deemed to have been given on the date of such mailing or electronic delivery. Whenever a notice is required to be given by the Company, such notice may be given by the Trustee on the Company’s behalf (and the Company will make any notice it is required to give to Holders available on its website).

Section 11.12No Personal Liability of Directors, Officers, Employees and Shareholders. No director, officer, employee, incorporator or shareholder of the Company will have any liability for any obligations of the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

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IN WITNESS WHEREOF, the parties to this Supplemental Indenture have caused it to be duly executed as of the day and year first above written.

THE RYLAND GROUP, INC.
By:	/s/ Gordon A. Milne
	Name:	Gordon A. Milne
	Title:	Executive Vice President and
		Chief Financial Officer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Alex Briffett
	Name:	John A. (Alex) Briffett
	Title:	Authorized Signatory

GUARANTORS:

MOORE’S ORCHARD, LLC (1)

RH BUILDERS OF INDIANA, INC. (2)

RH INVESTMENT OF INDIANA, INC. (2)

RH OF INDIANA, L.P. (3)

RH OF TEXAS LIMITED PARTNERSHIP (4)

RYLAND COMMUNITIES, INC. (2)

RYLAND HOMES INVESTMENT-TEXAS, INC. (2)

RYLAND HOMES NEVADA, LLC (5)

RYLAND HOMES OF TEXAS, INC. (2)

RYLAND HOMES OF ARIZONA, INC. (2)

RYLAND HOMES OF CALIFORNIA, INC. (2)

RYLAND ORGANIZATION COMPANY (2)

RYLAND VENTURES III, INC. (2)

THE REGENCY ORGANIZATION, INC. (2)

THE RYLAND CORPORATION (2)

(1)	By:	Ryland Ventures III, Inc.
		Its: General Manager
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(2)	By:	/s/ Timothy J. Geckle
		Name: Timothy J. Geckle
		Title: Secretary
(3)	By:	RH Builders of Indiana, Inc.
		Its: General Partner
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(4)	By:	Ryland Homes of Texas, Inc.
		Its: General Partner
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary
(5)	By:	The Ryland Group, Inc.
		Its: Sole Member
		By:	/s/ Timothy J. Geckle
			Name: Timothy J. Geckle
			Title: Secretary

EXHIBIT A

GUARANTEE

For value received, each of the undersigned hereby fully and unconditionally guarantees, on a senior and unsubordinated basis, as principal obligor and not only as a surety, to the Holders of the 1.625% Convertible Senior Notes due 2018 (the “Notes”) issued pursuant to the indenture dated as of June 28, 1996 (the “Base Indenture”) by and between The Ryland Group, Inc. (the “Company”) and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A. f/k/a Chemical Bank), as trustee (the “Trustee”), as supplemented by the Seventh Supplemental Indenture, dated as of May 16, 2012, among the Company, the Guarantors named therein and the Trustee, as amended or supplemented (the “Supplemental Indenture”), cash payments in United States Dollars of any amounts due with respect to the Notes in the amounts and at the times when due and interest on all overdue amounts, if lawful, and the payment or performance of all other obligations of the Company under the Supplemental Indenture, the Base Indenture or the Notes, to the Holders of Notes and the Trustee, all in accordance with and subject to the terms and limitations of the Notes, the Base Indenture, the Supplemental Indenture and this Guarantee.  This Guarantee will become effective in accordance with Article Six of the Supplemental Indenture and its terms shall be evidenced therein.  The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Seventh Supplemental Indenture or the Base Indenture, as the case may be.

The obligations of each of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee are expressly set forth in Article Six of the Supplemental Indenture and reference is hereby made to the Supplemental Indenture for the precise terms of the provisions of the Supplemental Indenture and the Base Indenture to which this Guarantee relates.

THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  Each of the Guarantors submit to the jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, City of New York, and of the United States District Court for the Southern District of New York, in any action or proceeding to enforce any of their obligations under this Guarantee, and agree not to seek a transfer of any such action or proceeding on the basis of inconvenience of the forum or otherwise (but the Guarantors shall not be prevented from removing any such action or proceeding from a state court to the United States District Court for the Southern District of New York).  Each of the Guarantors agree that process in any such action or proceeding may be served upon it by registered mail or in any other manner permitted by the rules of the court in which the action or proceeding is brought.

This Guarantee is subject to release upon the terms set forth in the Supplemental Indenture.

The undersigned acknowledges that this Guarantee is subject to the Trust Indenture Act and the undersigned agrees to discharge its duties under the Trust Indenture Act.

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IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly executed.

Dated:  May 16, 2012

GUARANTORS:

MOORE’S ORCHARD, LLC (1) RH BUILDERS OF INDIANA, INC. (2) RH INVESTMENT OF INDIANA, INC. (2) RH OF INDIANA, L.P. (3) RH OF TEXAS LIMITED PARTNERSHIP (4) RYLAND COMMUNITIES, INC. (2) RYLAND HOMES INVESTMENT-TEXAS, INC. (2) RYLAND HOMES NEVADA, LLC (5) RYLAND HOMES OF TEXAS, INC. (2) RYLAND HOMES OF ARIZONA, INC. (2) RYLAND HOMES OF CALIFORNIA, INC. (2) RYLAND ORGANIZATION COMPANY (2) RYLAND VENTURES III, INC. (2) THE REGENCY ORGANIZATION, INC. (2) THE RYLAND CORPORATION (2)

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(1)	By:	Ryland Ventures III, Inc.
		Its: General Manager
		By:
			Name: Timothy J. Geckle
			Title: Secretary
(2)	By:
		Name: Timothy J. Geckle
		Title: Secretary
(3)	By:	RH Builders of Indiana, Inc.
		Its: General Partner
		By:
			Name: Timothy J. Geckle
			Title: Secretary
(4)	By:	Ryland Homes of Texas, Inc.
		Its: General Partner
		By:
			Name: Timothy J. Geckle
			Title: Secretary
(5)	By:	The Ryland Group, Inc.
		Its: Sole Member
		By:
			Name: Timothy J. Geckle
			Title: Secretary

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EXHIBIT B

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO ANOTHER NOMINEE OF THE DEPOSITARY OR TO THE DEPOSITARY OR BY ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE RYLAND GROUP, INC.

1.625% Convertible Senior Notes due 2018

CUSIP 783764AQ6
ISIN US783764AQ64

No. R-1 $225,000,000

THE RYLAND GROUP, INC., a Maryland corporation (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Two Hundred Twenty-Five Million Dollars on May 15, 2018, at the office or agency of the Company referred to below, and to pay interest thereon, accruing from May 16, 2012, on November 15, 2012 and semi-annually thereafter on May 15 and November 15 in each year, at the rate of 1.625% per annum until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the Close of Business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the Close of Business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may

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be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Payment of the principal of, and interest on, this Security will be made at the office appointed by the Company in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated: May 16, 2012	THE RYLAND GROUP, INC.
	By:
		Gordon A. Milne
		Executive Vice President and
		Chief Financial Officer
Attest:
Timothy J. Geckle
Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A. f/k/a as Chemical Bank), as Trustee

By:
	Authorized Officer

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REVERSE OF SECURITY

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of June 28, 1996 (herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A. f/k/a as Chemical Bank), as Trustee, herein called the “Trustee” (which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  The terms of this Security include the covenants and terms established by the Seventh Supplemental Indenture, dated as of May 16, 2012, among the Company, the Guarantors named therein and the Trustee, pursuant to the authority granted under the Indenture (such terms and covenants shall be referred to herein collectively with the terms and covenants set out in the Indenture that are applicable to the Securities of this series as the “Indenture Terms”).  Defined terms used herein that are not otherwise defined shall have the meanings given such terms in the Indenture Terms.  This Security is one of the series designated on the face hereof, in an aggregate principal amount of $225,000,000.  The Company may subsequently issue additional securities as part of this series of Securities under the Indenture.

The Securities are not redeemable at the option of the Company prior to maturity, no sinking fund is provided for the Securities and the Securities will not be subject to defeasance.

Subject to the Indenture Terms, in the event of a Fundamental Change, each Holder of the Securities shall have the right, at the Holder’s option, to require the Company to repurchase such Holder’s Securities including any portion thereof which is $1,000 in principal amount or any integral multiple thereof on the Fundamental Change Purchase Date at a price payable in cash equal to the Fundamental Change Purchase Price.

The Securities shall be convertible into shares of Common Stock in accordance with Article Five of the Supplemental Indenture. To convert a Security, a Holder must satisfy the requirements of Section 5.04 of the Supplemental Indenture. A Holder may convert a portion of a Security if the portion is $1,000 principal amount or an integral multiple of $1,000 principal amount.

Upon conversion of a Security, the Holder thereof shall be entitled to receive shares of Common Stock payable upon conversion in accordance with Article Five of the Supplemental Indenture, at the Conversion Rate specified in the Supplemental Indenture, as adjusted from time to time as provided in the Supplemental Indenture.

No Holder will be entitled to receive shares of Common Stock upon conversion, and any purported delivery of shares of Common Stock upon conversion of Securities shall be void and of no effect, to the extent (but only to the extent) that such receipt or delivery would cause such converting Holder to become an Acquiring Person, unless such converting Holder has received prior approval of the Board of Directors. If any delivery of shares of Common Stock owed to a Holder upon conversion of Securities is not made, in whole or in part, as a result of the Section 382 Limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such shares of Common Stock as promptly as practicable after such delivery would not result in such converting Holder being an Acquiring Person and such converting Holder gives notice thereof to the Company.

The following constitute Events of Default:  the Company fails to pay the principal of any Security when due; the Company fails to deliver the Settlement Amount owing upon conversion of any Security within 5 calendar days; the Company fails to pay any interest on any Security when due, and

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such failure continues for 30 calendar days; the Company fails to pay the Fundamental Change Purchase Price of any Security when due; the Company fails to provide timely notice of a Fundamental Change or a Make-Whole Adjustment Event in accordance with the terms of the Supplemental Indenture; the Company fails to perform any other covenant required of it in the Supplemental Indenture and such failure continues for 60 calendar days after notice is given in accordance with the Supplemental Indenture; the occurrence of any event that results in the acceleration of any of the Company’s or its Subsidiaries’ Indebtedness, other than Non-Recourse Indebtedness, that has an outstanding principal amount of $10 million or more in the aggregate; a default in the payment of any principal or interest in respect of any of the Company’s or its Subsidiaries’ Indebtedness, other than Non-Recourse Indebtedness, that has an outstanding principal amount of $20 million or more and the continuation of that default for ten Business Days from the date the principal or interest payment became due and payable, after giving effect to any applicable grace period provided for in the documents governing the Indebtedness; and certain events of bankruptcy, insolvency or reorganization as provided in the Indenture Terms.  If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Outstanding Securities of this series may declare the principal of all of the Securities of this series to be due and payable immediately.  Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture.  The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities.  Subject to certain limitations, Holders of a majority in principal amount of the Securities of this series may direct the Trustee in its exercise of any trust or power conferred upon the Trustee with respect to such Securities.  The Trustee may withhold from Holders of the Securities of this series notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests.  The Company must furnish an annual compliance certificate to the Trustee.

The Supplemental Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities at any time by the Company, the Subsidiary Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding.  Without the consent of any Holder of Securities, the Indenture or the Securities may be amended to cure any ambiguity, omission, defect or inconsistency or to make any change that does not adversely affect the rights of any Holder of Securities in any material respect.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holders of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture Terms and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, places and rates, and in the coin or currency, herein prescribed.

As provided in the Indenture Terms and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency appointed by the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Securities of

B-5

this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000.00 and integral multiples of $1,000.00 in excess thereof.  As provided in the Indenture Terms and subject to certain limitations set forth therein, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture Terms or for any claim based on, in respect of or by reason of such obligations or their creation.  Each Holder of Securities of this series by accepting a Security waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Securities of this series.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

No recourse shall be had for the payment of the principal of (and premium, if any) or interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture Terms or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A.), the Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates as if it were not Trustee.

The Company will furnish to any Holder of the Securities of this series upon written request and without charge a copy of the Indenture.  Requests may be made to: The Ryland Group, Inc., 3011 Townsgate Road, Suite 200, Westlake Village, California 91361-3027, Attention: Treasurer.

B-6

FORM OF CONVERSION NOTICE

To convert this Security in accordance with the Indenture, check the box:  £

To convert only part of this Security, state the principal amount to be converted (must be in multiples of $1,000):

$

If you want the stock certificate representing the Common Stock issuable upon conversion made out in another person’s name, fill in the form below:

(Insert other person’s soc. sec. or tax I.D. no.)

(Print or type other person’s name, address and zip code)

Date:	Signature(s):
	(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed
by:
	(All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

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FORM OF REPURCHASE NOTICE

Certificate No. of Security:

If you want to elect to have this Security purchased by the Company pursuant to Section 3.02 of the Indenture, check the box: £

If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.02 of the Indenture, state the principal amount to be so purchased by the Company:

$

(in an integral multiple of $1,000)

Date:	Signature(s):
	(Sign exactly as your name(s) appear(s) on this Security)
Signature(s) guaranteed
by:
	(All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

B-8

EX-5.1

Exhibit 5.1

	DLA Piper LLP (US)
	The Marbury Building
	6225 Smith Avenue
	Baltimore, Maryland 21209-3600
	www.dlapiper.com
	T  410.580.3000
	F  410.580.3001

May 16, 2012

THE RYLAND GROUP, INC.

3011 Townsgate Road, Suite 200

Westlake Village, California 91361-3027

Re:Offering of 1.625% Convertible Senior Notes due 2018

Ladies and Gentlemen:

We serve as counsel to The Ryland Group, Inc., a Maryland corporation (the “Company”), and have been requested to render this opinion in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form S-3 of the Company (Registration No. 333-179206) (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) and which became effective on January 27, 2012, including the preliminary prospectus included therein at the time the Registration Statement was declared effective (the “Base Prospectus”), for offering by the Company of $200,000,000 aggregate principal amount of the Company’s 1.625% convertible senior notes due 2018 (the “Underwritten Securities”), $25,000,000 additional aggregate principal amount of the Company’s 1.625% convertible senior notes due 2018 (the “Option Securities”) and related guarantees (the “Guarantees,” and together with the Underwritten Securities and Option Securities, the “Securities”). The Securities were issued pursuant to a terms agreement dated May 10, 2012 (the “Terms Agreement”), including the Underwriting Agreement Basic Provisions dated May 10, 2012 referred to therein (the “Underwriting Agreement Basic Provisions”), among the Company, the subsidiaries of the Company set forth in the Registration Statement (the “Guarantors”) and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, on behalf of the Underwriters listed in the Terms Agreement, and under the Indenture dated as of June 28, 1996 (the “1996 Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, N.A., formerly known as Chemical Bank, as trustee (the “Trustee”), as supplemented by that certain Seventh Supplemental Indenture, dated as of May 16, 2012, by and among the Company, the Guarantors and the Trustee (the “Supplemental Indenture,” and together with the 1996 Indenture, the “Indenture”). The Securities are convertible into shares of the Company’s common stock, par value $1.00 per share (the “Common Stock”). This opinion is being provided at your request in connection with the filing of a Current Report on Form 8-K and supplements our opinion, dated January 27, 2012, previously filed as Exhibit 5.1 to the Registration Statement.

In rendering the opinion expressed herein, we have reviewed originals or copies, certified or otherwise identified to our satisfaction, of the following documents (the “Documents”):

(a)The Registration Statement;

(b)The Base Prospectus;

(c)The preliminary prospectus supplement relating to the Securities used most recently prior to the Execution Time (as defined in the Underwriting Agreement Basic Provisions);

(d)The issuer free writing prospectus, as defined in Rule 405 of the Rules and Regulations identified in Schedule 1 to the Terms Agreement;

(e)The prospectus supplement specifically relating to the Securities that was first filed pursuant to Rule 424(b) of the Rules and Regulations after the Execution Time;

(f)The Underwriting Agreement Basic Provisions;

(g)Executed copies of the Terms Agreement, the Indenture and the documents evidencing the Securities;

(h)The Charter and By-laws of the Company, in effect as of the date hereof;

(i)Resolutions adopted by the Board of Directors and committees of Board of Directors of the Company relating to the authorization of the Terms Agreement, including the Underwriting Agreement Basic Provisions, and the authorization and issuance of the Securities;

(j)A good standing certificate for the Company and each of Guarantors, dated as of a recent date; and

(k)Such other documents of the Company and the Guarantors as we have deemed necessary to the rendering of the opinion expressed below.

In examining the Documents and in rendering the opinion set forth below, we have assumed the following:  (a) (i) each of the parties to the Documents (other than the Company but including the Guarantors) has duly authorized and has duly and validly executed and delivered each of the Documents and each instrument, agreement and other document executed in connection with the Documents to which such party is a signatory and (ii) the obligations set forth in the Documents of the parties thereto (other than the Company’s and the Guarantors’) are their legal, valid and binding obligations, enforceable in accordance with their respective terms; (b) each Guarantor has been duly organized and is validly existing in good standing, and has requisite legal status and legal capacity, under the laws of its jurisdiction of organization to execute and be bound by the Securities, and each Guarantor has complied and will comply with all aspects of the laws of all relevant jurisdictions (including the laws of each such Guarantor’s jurisdiction of organization) in connection with the transactions contemplated by, and the performance of obligations under, the Indenture and the Securities, other than the laws of the United States of America and the State of New York; (c) each person executing any such instrument, agreement or other document on behalf of any such party (other than the Company but including the Guarantors) is duly authorized to do so; (d) each natural person executing any such instrument, agreement or other document is legally competent to do so; (e) the Documents accurately describe and contain the mutual understandings of the parties, there are no oral or written modifications of or amendments or supplements to the Documents and there has been no waiver of any of the provisions of the Documents by actions or conduct of the parties or otherwise; and (f) all documents submitted to us as originals are authentic, all documents submitted to us as certified or photostatic copies or telecopies or portable document file (“.PDF”) copies conform to the original documents (and the authenticity of the originals of such copies), all signatures on all documents submitted to us for examination (and including signatures on photocopies, telecopies and .PDF copies) are genuine, and all public records reviewed are accurate and complete.  As to all factual matters relevant to the opinion set forth below, we have relied upon the representations and warranties made in the Underwriting Agreement Basic Provisions and the Indenture, which we assume to be accurate and complete, and on the oral or written statements and representations of officers of the Company and the Guarantors, of public officials and our review of the Documents.

2

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

(1)The Securities have been duly authorized by all necessary corporate action of the Company, have been duly executed by the Company and are legal, valid and binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits of the Indenture.

(2)The Guarantees are legal, valid and binding obligations of the Guarantors enforceable in accordance with their terms and entitled to the benefits of the Indenture.

(3)Upon conversion of the Securities in accordance with the terms of the Securities and the Indenture, the shares of Common Stock issuable upon conversion of the Securities will be validly issued, fully-paid and nonassessable.

In addition to the qualifications set forth above, the foregoing opinion is further qualified as follows:

(a)The foregoing opinion is rendered as of the date hereof. We assume no obligation to update such opinion to reflect any facts or circumstances that may hereafter come to our attention or changes in the law which may hereafter occur.

(b)We do not express any opinion herein concerning any laws other than the laws of the State of New York and the State of Maryland that, in our experience, are normally applicable to transactions of the type contemplated by the Terms Agreement and the Indenture and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-Opined on Law on the opinion herein. Insofar as the opinion expressed herein relates to matters governed by laws other than those set forth in the preceding sentence, we have assumed, without having made any independent investigation, that such laws do not affect any of the opinions set forth herein. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

(c)We express no opinion as to compliance with the securities (or “blue sky”) laws of any jurisdiction.

(d)We express no opinion on the following:

i.the enforceability of any provisions permitting modifications of the Indenture or the Securities only if in writing, or stating that the provisions of such agreements and instruments are severable;

ii.the enforceability of the provisions of the Indenture or the Securities which provide that the jurisdiction of the courts of any particular jurisdiction may not be binding on the courts in the forums selected or excluded;

iii.the effect of the general principles of equity, including, but not limited to, concepts of good faith and fair dealing and the possible unavailability of specific

3

performance or injunctive relief (regardless of whether such remedy is considered in a proceeding in equity or at law);

iv.the effect of statutory law and judicial decisions that limit enforcement of an exculpatory or indemnity provision with respect to: (i) the negligence or willful misconduct of the party seeking relief or of any person for whom said party is legally responsible; (ii) violations of law by the party seeking relief or by any person for whom said party is legally responsible; or (iii) matters found to be contrary to statute or public policy;

v.the effect of judicial decisions and statutory law restricting enforcement of certain covenants and the availability of specific performance or any other remedy of the Trustee, or Security holder, if the violation of a covenant or the breach of a warranty is not material or if the action to enforce the covenant or breach of warranty is not undertaken in good faith under the then-existing circumstances;

vi.the effect of judicial decisions giving effect to governmental actions or foreign laws affecting creditors’ rights; and

vii.the enforceability of provisions regarding consent to service, jurisdiction, venue or forum of any claim, demand, action or cause of action arising under or related to the Indenture or the Securities or the transactions contemplated therein.  We express no opinion as to any provision purporting to waive rights to trial by jury, service of process or objections to the laying of venue or to forum on the basis of forum non conveniens in connection with any litigation arising out of or pertaining to the Terms Agreement or the transactions contemplated therein.

(e)This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.

(f)We do not express any opinion as to the effect on the opinion expressed herein of (i) the compliance or noncompliance of any party to the Indenture and the Securities (other than the Company and the Guarantors to the extent necessary to render the opinion set forth herein) with any state, federal or other laws or regulations applicable to it or them or (ii) the legal or regulatory status or the nature of the business of any party.

We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Current Report on Form 8-K and to the reference of our firm under the heading “Legal Matters” in the Prospectus Supplement relating to the Securities.  In giving our consent, we do not thereby admit that we are in a category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations.

Very truly yours,

DLA PIPER LLP (US)

/s/ DLA PIPER LLP (US)

4

EX-99.1

Exhibit 99.1

RYLAND COMPLETES OFFERING OF $225 MILLION OF
1.625% CONVERTIBLE SENIOR NOTES

WESTLAKE VILLAGE, Calif.—(BUSINESS WIRE)— The Ryland Group, Inc. (NYSE: RYL) announced the completion of its offering and sale of $225 million aggregate principal amount of 1.625% Convertible Senior Notes due 2018. This amount includes the exercise in full by the underwriters of their option to purchase an additional $25 million aggregate principal amount of notes.

The notes will be the Company’s general unsecured senior obligations. The notes will pay interest semi-annually on May 15 and November 15, beginning on November 15, 2012, at a rate of 1.625% per year, and will mature on May 15, 2018. The notes will be guaranteed by substantially all of the Company’s direct and indirect wholly owned homebuilding subsidiaries. The notes will initially be convertible into shares of common stock at a conversion rate of 31.2168 shares of the Company’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of approximately $32.03 per share of common stock.

The Company intends to use the net proceeds from this offering for general corporate purposes, which may include repayment or repurchase of outstanding indebtedness.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC acted as the joint-book running managers, and UBS Securities LLC acted as co-manager. The notes were issued pursuant to an effective shelf registration statement that was previously filed by the Company with the Securities and Exchange Commission and became effective immediately upon filing.

The offering was made by means of a prospectus supplement and accompanying prospectus. Copies of the prospectus supplement and accompanying prospectus may be obtained from Citigroup, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220 or by telephone at 1-800-831-9146 or by email at batprospectusdept@citigroup.com; J.P. Morgan Securities LLC at 1-212-834-4533 or by mail to Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Post-Sale Fulfillment; and UBS Securities LLC at (888) 827-7275 or by mail to 299 Park Avenue, New York, NY 10171, Attention Prospectus Department. An electronic copy of the prospectus supplement and accompanying prospectus may also be obtained at no charge at the Securities and Exchange Commission’s website at www.sec.gov.

About The Ryland Group

Headquartered in Southern California, Ryland is one of the nation’s largest homebuilders and a leading mortgage-finance company.  Since its founding in 1967, Ryland has built more than 295,000 homes and financed more than 245,000 mortgages.  The Company currently operates in 13 states across the country and is listed on the New York Stock Exchange under the symbol “RYL.”

Safe Harbor Statement

Certain statements in this press release may be regarded as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may qualify for the safe harbor provided for in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent Ryland’s expectations and beliefs concerning future events, and no assurance can be given that the future results described in this press release will be achieved. These forward-looking statements can generally be identified by the use of statements that include words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “likely,” “may,” “plan,” “project,” “should,” “target,” “will” or other similar words or phrases. All forward-looking statements contained herein are based upon information available to the Company on the date of this press release. Except as may be required under applicable law, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ryland’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. The factors and assumptions upon which any forward-looking statements herein are based are subject to risks and uncertainties which include, among others, risks associated with the offering of the notes, including whether such offering of the notes will be successful and on what terms it may be completed, the risk factors set forth in the Company’s most recent Annual Report on Form 10-K and other factors over which the Company has little or no control.

The Ryland Group, Inc.
Gordon A. Milne
Executive Vice President, Chief Financial Officer
(805) 367-3720
gmilne@ryland.com