CREDIT AGREEMENT

Loan Agreement

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GUARANTY BANK | RYLAND MORTGAGE COMPANY

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Title: CREDIT AGREEMENT
Governing Law: Texas Date: 8/4/2009
Industry: Construction Services Sector: Capital Goods

Exhibit 10.2

CREDIT AGREEMENT

RYLAND MORTGAGE COMPANY,

as Borrower

GUARANTY BANK

as Lender

January 24, 2008

TABLE OF CONTENTS

		Page

ARTICLE I	GENERAL TERMS			1

Section 1.1	Certain Definitions		1
Section 1.2	Exhibits and Schedules		17
Section 1.3	Calculations and Determinations		17

ARTICLE II	AMOUNT AND TERMS OF LOANS		17

Section 2.1	Commitment and Loans		17
Section 2.2	Promissory Note; Interest on the Note		17
Section 2.3	Notice and Manner of Obtaining Loans		17
Section 2.4	Fees		19
Section 2.5	Mandatory Repayments		19
Section 2.6	Payments to Lender		19
Section 2.7	Increased Cost and Reduced Return		20

ARTICLE III	CONDITIONS PRECEDENT		21

Section 3.1	Initial Loan		21
Section 3.2	All Loans		22

ARTICLE IV	BORROWER REPRESENTATIONS AND WARRANTIES		23

Section 4.1	Organization and Good Standing		23
Section 4.2	Authorization and Power		23
Section 4.3	No Conflicts or Consents		23
Section 4.4	Enforceable Obligations		24
Section 4.5	Priority of Liens		24
Section 4.6	No Liens		24
Section 4.7	Financial Condition of Borrower		24
Section 4.8	Full Disclosure		24
Section 4.9	No Default		24
Section 4.10	No Litigation		24
Section 4.11	Taxes		25
Section 4.12	Principal Office, etc		25
Section 4.13	Compliance with ERISA		25
Section 4.14	Subsidiaries		25
Section 4.15	Indebtedness		25
Section 4.16	Permits, Patents, Trademarks, etc.		25
Section 4.17	Status Under Certain Federal Statutes		25
Section 4.18	Securities Act		25
Section 4.19	No Approvals Required		26
Section 4.20	Survival of Representations		26
Section 4.21	Compliance with Laws		26
Section 4.22	Payment of Obligations		26
Section 4.23	Individual Mortgage Loans		26
Section 4.24	Environmental Matters		27
Section 4.25	Status as Approved Seller/Servicer		28
Section 4.26	Regulation U		28

TABLE OF CONTENTS

		Page

ARTICLE V	AFFIRMATIVE COVENANTS		28

Section 5.1	Financial Statements and Reports		28
Section 5.2	Taxes and Other Liens		30
Section 5.3	Maintenance		30
Section 5.4	Further Assurances		31
Section 5.5	Reimbursement of Expenses		31
Section 5.6	Insurance		31
Section 5.7	Accounts and Records: Servicing Records		32
Section 5.8	Right of Inspection		32
Section 5.9	Notice of Certain Events		32
Section 5.10	Performance of Certain Obligations and Information Regarding Investors		33
Section 5.11	Use of Proceeds: Margin Stock		33
Section 5.12	Notice of Default		33
Section 5.13	Compliance with Loan Documents		33
Section 5.14	Operations and Properties		33
Section 5.15	Environmental Matters		33
Section 5.16	MERS Status		34
Section 5.17	Hedging Arrangements		34

ARTICLE VI	NEGATIVE COVENANTS		35

Section 6.1	No Merger; Limitation on Issuance of Securities		35
Section 6.2	Limitation on Indebtedness		35
Section 6.3	Fiscal Year, Method of Accounting		35
Section 6.4	Business		35
Section 6.5	Liquidations, Consolidations and Dispositions of Substantial Assets		35
Section 6.6	Loans, Advances, and Investments		36
Section 6.7	Use of Proceeds		36
Section 6.8	Actions with Respect to Mortgage Collateral		36
Section 6.9	Transactions with Affiliates		37
Section 6.10	Liens		37
Section 6.11	ERISA Plans		37
Section 6.12	Change of Principal Office		37
Section 6.13	Tangible Net Worth		37
Section 6.14	Total Indebtedness to Adjusted Tangible Net Worth		37
Section 6.15	Profitability		37
Section 6.16	Adjusted Tangible Net Worth		37
Section 6.17	Dividends		38

ARTICLE VII	EVENTS OF DEFAULT		38

Section 7.1	Nature of Event		38
Section 7.2	Default Remedies		40

ARTICLE VIII	INDEMNIFICATION		40

TABLE OF CONTENTS

		Page

Section 8.1	Indemnification		40
Section 8.2	Limitation of Liability		41

ARTICLE IX	MISCELLANEOUS		41

Section 9.1	Notices		41
Section 9.2	Amendments, Etc		42
Section 9.3	CHOICE OF LAW; VENUE		42
Section 9.4	Invalidity		43
Section 9.5	Survival of Agreements		43
Section 9.6	Renewal, Extension or Rearrangement		43
Section 9.7	Waivers		43
Section 9.8	Cumulative Rights		43
Section 9.9	Limitation on Interest		43
Section 9.10	Bank Accounts; Offset		44
Section 9.11	Assignments, Participations		44
Section 9.12	Exhibits and Schedules		45
Section 9.13	Titles of Articles, Sections and Subsections		45
Section 9.14	Counterparts; Fax		45
Section 9.15	Termination: Limited Survival		45
Section 9.16	Disclosures		45
Section 9.17	Time is of the Essence		46
Section 9.18	USA Patriot Act Notice		46
Section 9.19	Electronic Transactions		46
Section 9.20	No Reliance		46
Section 9.21	Confidential Information.		46
Section 9.22	WAIVER OF JURY TRIAL		48
Section 9.23	CONSEQUENTIAL DAMAGES		48
Section 9.24	ENTIRE AGREEMENT		49

iii

TABLE OF CONTENTS

(continued)

SCHEDULES

Schedule 1.1	Approved Investors

Schedule 4.14	Subsidiaries





EXHIBITS

Exhibit A	Form of Note

Exhibit B	Form of Borrowing Request

Exhibit C	Certificate Accompanying Financial Statement

Exhibit D	Borrowing Base Certificate

Exhibit E	Form of Security Agreement

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made and entered into as of January 24, 2008, between RYLAND MORTGAGE COMPANY, an Ohio corporation (“ Borrower ”), and GUARANTY BANK (“ Lender ”) .

The parties hereto hereby agree as follows:

ARTICLE I

GENERAL TERMS

Section 1.1 Certain Definitions . As used in this Agreement, the following terms have the following meanings:

“ Adjusted Floating LIBOR ” means, for any day, the rate per annum equal to the sum of the Floating LIBOR for such day plus the Applicable Floating LIBOR Margin, provided that the Adjusted Floating LIBOR shall never exceed the Maximum Rate.

“ Applicable Floating LIBOR Margin ” means nine-tenths percent (0.90%) per annum.

“ Adjusted Tangible Net Worth ” means, as of any date, the Tangible Net Worth of Borrower minus the outstanding amount of Intercompany Loans.

“ Affiliate ” means, as to any Person, each other Person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with, such Person.

“ Aged Loan ” means an Eligible Mortgage Loan which has been included in the Borrowing Base for more than sixty (60) days but less than or equal to one hundred and twenty (120) days.

“ Agreement ” means this Credit Agreement, as the same may from time to time be amended, supplemented or restated.

“ Agreement to Pledge ” means each agreement by Borrower set forth in a Borrowing Request for Wet Loans, to deliver Required Mortgage Documents to Lender.

“ Applicable Advance Rate Percentage ” means, for each Mortgage Loan classification listed below, the percentage listed opposite such Mortgage Loan classification:

Prime Loan (Dry Loan)	98	%

Prime Loan (Wet Loan)	98	%

Second Lien Loan (Dry Loan)	90	%

Second Lien Loan (Wet Loan)	90	%

“ Applicable Sublimit ” means, for each Mortgage Loan classification listed below, the percentage of the total Commitment listed opposite such Mortgage Loan classification:

Wet Loans	35	%

Second Lien Loans	5	%

provided , however , that in the last five and first five Business Days of every calendar month the Applicable Sublimit for Wet Loans shall be 50% of the Commitment.

“ Appraised Value ” means, for any Mortgage Loan, the current appraised value of the property secured by the Mortgage as determined by an appraisal performed in full compliance with FNMA/FHLMC appraisal requirements and on an appraisal form approved by FNMA or FHLMC, and performed by a state licensed or state-certified real estate appraiser (in accordance with the provisions of Title XI of FIRREA).

“ Borrower ” shall have the meaning assigned to such term in the preamble hereof.

“ Borrowing ” means a borrowing of a new Loan.

“ Borrowing Base ” means at any date all Eligible Mortgage Loans which have been delivered to and held by Lender or otherwise identified as Mortgage Collateral.

“ Borrowing Base Certificate ” means a certificate describing the Eligible Mortgage Loans to be included in the Borrowing Base in a form acceptable to Lender.

“ Borrowing Request ” means a request, in the form of Exhibit B , for a Loan pursuant to Article II .

“ Business Day ” means a day, other than a Saturday or Sunday, on which commercial banks are open for business with the public in Dallas, Texas. Any Business Day in any way relating to the LIBOR must also be a day on which, in the judgment of Lender, significant transactions in dollars are carried out in the interbank Eurocurrency market.

“ Cash Equivalents ” means (i) securities issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality thereof which mature within ninety (90) days from the date of acquisition, and (ii) time deposits and certificates of deposit, which mature within ninety (90) days from the date of acquisition, of Lender or any other domestic commercial bank having capital and surplus in excess of $200,000,000, which has, or the holding company of which has, a commercial paper rating of at least A-1 or the equivalent thereof by Standard & Poors (a division of the McGraw-Hill Companies) or P-1 or the equivalent thereof by Moody’s Investors Service, Inc.

“ Change of Control ” means the Parent ceases to own one hundred percent (100%) of the voting power of the voting stock of Borrower.

“ CLTV ” means to any Mortgage Loan, the ratio expressed as a percentage determined by dividing (i) the total amount owing and outstanding on all loans secured by the residential real

property and improvements serving as collateral for the Mortgage Loan, by (ii) the Appraised Value of the residential real property and improvements serving as collateral for the Mortgage Loan.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” has the meaning given to it in the Security Agreement.

“ Collateral Value of the Borrowing Base ” means, on any day, the sum of the Unit Collateral Values of all Eligible Mortgage Loans included in the Borrowing Base on such day as determined by Lender based on information then available to Lender.

“ Commitment ” means at any date, the obligation of the Lender to make Loans to Borrower pursuant to Section 2.1 hereof in an aggregate outstanding amount not to exceed at any time $40,000,000.

“ Confidential Information ” means, with respect to a Person, information about hardware, software, screens, specifications, designs, plans, drawings, data, prototypes, discoveries, research, developments, methods, processes, procedures, improvements, “know-how”, compilations, market research, marketing techniques and plans, business plans and strategies, customer names and all other information related to or provided by customers, price lists, pricing policies and financial information or other business and/or technical information and materials, in oral, demonstrative, written, graphic or machine-readable form, which is (i) unpublished, (ii) not available to the general public or trade, and (iii) maintained as confidential and proprietary information by the disclosing party for regulatory, customer relations, and/or competitive reasons. Confidential Information also includes such confidential and proprietary information or material belonging to a disclosing party or to which the other party may obtain knowledge or access through or as a result of the performance of its obligations under this Agreement. Confidential Information also includes any information described above which the disclosing party has obtained in confidence from another party who treats it as proprietary or designates it as Confidential Information, whether or not owned or developed by the disclosing party. Without limiting the foregoing, Confidential Information includes all such information provided to each party by the other party both before and after the date of this Agreement and also includes the terms of this Agreement.

“ Conforming Loan ” means a Mortgage Loan which (i) receives one of the following responses from Fannie Mae Desktop Underwriter: (a) Approve/Eligible, (b) Approve/Ineligible, (c) Refer/Eligible, or (d) EA-I,-II,-III/Eligible, or (ii) receives one of the following responses from Freddie Mac Loan Prospector: (x) Accept/Accept, or (y) A-Minus, or (iii) receives an Accept from Clout/Clues. Mortgage Loans receiving a “Refer/Eligible” response must be accompanied by the Investor’s approval to the exception. Mortgage Loans receiving approval under the “Expanded Approval” (“EA”) criteria or “A-Minus” criteria are permitted only if Borrower provides Lender with a copy of the Fannie Mae or Freddie Mac contract which allows delivery by Borrower for this loan type. Mortgage Loans receiving an “Approve/Ineligible” response are permitted only if Borrower or applicable take-out investor represents and warrants to Lender that Borrower possesses an agency waiver with respect to such Mortgage Loan, thereby making such Mortgage Loan agency eligible.

“ Consolidated ” refers to the consolidation of any Person, in accordance with GAAP, with its properly consolidated subsidiaries. References herein to a Person’s Consolidated financial statements, financial position, financial condition, liabilities, etc. refer to the consolidated financial statements, financial position, financial condition, liabilities, etc. of such Person and its properly consolidated subsidiaries.

“ Debtor Laws ” means all applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization or similar Laws from time to time in effect affecting the rights of creditors generally and general principles of equity.

“ Default ” means any of the events specified in Section 7.1 hereof, whether or not any requirement for notice or lapse of time or any other condition has been satisfied.

“ Default Rate ” means, at the time in question, with respect to all Obligations, the sum of (i) four percent (4%) per annum, plus (ii) the per annum interest rate otherwise payable in respect of the Obligations; provided that in no event shall the Default Rate ever exceed the Maximum Rate.

“ Dividends ,” in respect of any corporation, means: (a) cash distributions or any other distributions on, or in respect of, any class of equity security of such corporation, except for distributions made solely in shares of securities of the same class; and (b) any and all funds, cash or other payments made in respect of the redemption, repurchase or acquisition of such securities.

“ Drawdown Termination Date ” means the earlier of January 22, 2009, or the day on which the Note first becomes due and payable in full.

“ Dry Loan ” means an Eligible Mortgage Loan included in the Borrowing Base and for which the Required Mortgage Documents have been delivered to Lender.

“ Eligible Mortgage Loan ” means a Mortgage Loan with respect to which each of the following statements is accurate and complete (and the Borrower by including such Mortgage Loan in any computation of the Collateral Value of the Borrowing Base shall be deemed to so represent and warrant to Lender at and as of the date of such computation):

(a) Such Mortgage Loan is a binding and valid obligation of the Obligor thereon, in full force and effect and enforceable in accordance with its terms, except as enforceability may be limited by Debtor Laws;

(b) The Mortgage Note evidencing such Mortgage Loan is genuine in all respects as appearing on its face and as represented in the books and records of Borrower, and all information set forth therein is true and correct;

(c) Such Mortgage Loan is free of any default (other than as permitted by subparagraph (d) below) of any party thereto (including Borrower), counterclaims, offsets and defenses, including the defense of usury, and from any rescission, cancellation or avoidance, and all right thereof, whether by operation of law or otherwise;

(d) No payment under such Mortgage Loan is more than thirty (30) days past due the payment due date set forth in the underlying Mortgage Note and Mortgage;

(e) The Mortgage Note evidencing such Mortgage Loan contains the entire agreement of the parties thereto with respect to the subject matter thereof, has not been modified or amended in any respect not expressed in writing therein and is free of concessions or understandings with the Obligor thereon of any kind not expressed in writing therein;

(f) Such Mortgage Loan is in all respects in accordance with all Requirements of Law applicable thereto, including, without limitation, the federal Consumer Credit Protection Act and the regulations promulgated thereunder and all applicable usury Laws and restrictions, and all notices, disclosures and other statements or information required by Law or regulation to be given, and any other act required by Law or regulation to be performed, in connection with such Mortgage Loan have been given and performed as required;

(g) All advance payments and other deposits on such Mortgage Loan have been paid in cash, and no part of said sums has been loaned, directly or indirectly, by Borrower to the Obligor, and, other than as disclosed to Lender in writing, there have been no prepayments;

(h) Such Mortgage Loan will be free and clear of all Liens, except Permitted Liens;

(i) The Property covered by such Mortgage Loan is insured against loss or damage by fire and all other hazards normally included within standard extended coverage in accordance with the provisions of such Mortgage Loan with Borrower named as a loss payee thereon;

(j) Such Mortgage Loan is secured by a first Mortgage, or in the case of any Second Lien Loan, a second Mortgage, on Single Family property;

(k) The date of origination of such Mortgage Loan is not more than thirty (30) days prior to the date such Mortgage Loan was first included in the Borrowing Base;

(l) Such Mortgage Loan has not been included in the Borrowing Base for more than one hundred and twenty (120) days;

(m) If such Mortgage Loan is included in the Borrowing Base and has been withdrawn from the possession of the Lender on terms and subject to conditions set forth in the Security Agreement:

(i) If such Mortgage Loan was withdrawn by Borrower for purposes of correcting clerical or other non-substantive documentation problems, the promissory note and other documents relating to such Mortgage Loan are returned to the Lender within ten (10) Business Days from the date of withdrawal; and the Unit Collateral Value of such Mortgage Loan when added to the Unit Collateral

Value of other Mortgage Loans which have been similarly released to Borrower and have not been returned does not exceed ten percent (10%) of the Commitment;

(ii) If such Mortgage Loan was shipped by the Lender directly to a permanent investor for purchase or to a custodian for the formation of a pool, (x) such investor or custodian is in full compliance with the terms of the bailee letter under which such Mortgage Loan was shipped, and (y) the full purchase price for such Mortgage Loan has been received by the Lender (or such Mortgage Loan has been returned to the Lender) within forty-five (45) calendar days from the date of shipment by the Lender;

(n) Such Mortgage Loan is subject to (A) a Take-Out Commitment which is in full force and effect or (B) a Hedging Arrangement which is acceptable to the Lender in its sole and absolute discretion;

(o) Such Mortgage Loan is a Prime Loan;

(p) If such Mortgage is a Second Lien Loan, the Unit Collateral Value of such Mortgage Loan when added to the Collateral Value of all other Second Lien Loans does not exceed the Applicable Sublimit for Second Lien Loans;

(q) The Required Mortgage Documents have been delivered to Lender prior to the inclusion of such Mortgage Loan in any computation of the Borrowing Base or, if such items have not been delivered to Lender on or prior to the date such Mortgage Loan is first included in any computation of the Borrowing Base, (a) Borrower has pledged and agreed to deliver all Required Mortgage Documents pursuant to a Borrowing Request delivered to Lender prior to such inclusion, and (b) the Unit Collateral Value of such Mortgage Loan when added to the Unit Collateral Value of all other Mortgage Loans for which Lender has not received the Required Mortgage Documents does not exceed the Applicable Sublimit for Wet Loans, provided that , all Required Mortgage Documents with respect to such Mortgage Loan shall be delivered to Lender within seven (7) Business Days after the date of the Agreement to Pledge with respect thereto;

(r) The Property covered by such Mortgage Loan is located within the fifty United States;

(s) Such Mortgage Loan has been underwritten by the originator thereof in accordance with such originator’s then current underwriting guidelines, which underwriting guidelines have been previously approved by Lender; and

(t) The representations and warranties made by the Borrower in Section 4.23 with respect to each Mortgage Note and Mortgage Loan are true and correct.

“ Environmental Laws ” means any and all Laws relating to (a) the protection of the environment, (b) emissions, discharges or releases of pollutants, contaminants, chemicals or hazardous or toxic substances or wastes into the environment including ambient air, surface water, ground water or land, or (c) the manufacture, processing, distribution, use, treatment,

storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, together with the regulations from time to time promulgated with respect thereto.

“ ERISA Affiliate ” means all members of the group of corporations and trades or businesses (whether or not incorporated) which, together with Borrower, are treated as a single employer under Section 414 of the Code.

“ ERISA Plan ” means any pension benefit plan subject to Title IV of ERISA or Section 412 of the Code maintained or contributed to by Borrower or any ERISA Affiliate with respect to which Borrower has a fixed or contingent liability.

“ E-Sign Act ” means the Electronic Signatures in Global and National Commerce Act, as amended from time to time.

“ Event of Default ” means any of the events specified in Section 7.1 hereof, provided that any requirement in connection with such event for the giving of notice or the lapse of time, or the happening of any further condition, event or act has been satisfied.

“ FHA ” means the Federal Housing Administration or any successor thereto.

“ FHA Loan ” means a Mortgage Loan insured by the FHA.

“ FHLMC ” or “ Freddie Mac ” means the Federal Home Loan Mortgage Corporation, or any successor thereto.

“ Financing Lease ” means (i) any lease of Property if the then present value of the minimum rental commitment thereunder should, in accordance with GAAP, be capitalized on a balance sheet of the lessee, and (ii) any other lease obligations which are capitalized on a balance sheet of the lessee.

“ FIRREA ” means the Financial Institutions Reform Recovery and Enforcement Act of 1989, as amended from time to time, together with the regulations from time to time promulgated with respect thereto.

“ Fiscal Quarter ” means each period of three calendar months ending March 31, June 30, September 30 and December 31 of each year.

“ Fiscal Year ” means each period of twelve calendar months ending December 31 of each year.

“ Floating LIBOR ” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the rate appearing on Bloomberg Professional (or, if not available, any other nationally recognized trading screen reporting the British Bankers’ Association LIBOR) at 10:00 a.m. (Central time) as the British Bankers’ Association LIBOR for

deposits in U.S. Dollars with a term equivalent to one month. In the event that such rate does not appear on Bloomberg Professional, “Floating LIBOR” for purposes of this definition shall be determined by reference to such other comparable publicly available service for displaying London inter-bank offered rates as may be selected by the Lender.

“ FNMA ” or “ Fannie Mae ” means the Federal National Mortgage Association, or any successor thereto.

“ Full Documentation Mortgage Loan ” means a Mortgage Loan supported by all of the customary documentation required to underwrite the Mortgage Loan, including, without limitation, the following: (i) Verification of Income (“VOI”), (ii) Verification of Assets (“VOA”), and (iii) Verification of Employment (“VOE”).

“ Funding Account ” means the non-interest bearing demand checking account established by Borrower with Lender to be used for (a) the initial deposit of proceeds of Loans; and (b) the funding or purchase of a Mortgage Note by Borrower; provided that the Funding Account shall be pledged to Lender and that Borrower shall not be entitled to withdraw funds from the Funding Account.

“ GAAP ” means those generally accepted accounting principles and practices which are recognized as such by the Financial Accounting Standards Board (or any generally recognized successor) and which, in the case of Borrower and its consolidated subsidiaries, are applied for all periods after the date hereof in a manner consistent with the manner in which such principles and practices were applied to the financial statements described in Section 4.7 . If any change in any accounting principle or practice is required by the Financial Accounting Standards Board (or any such successor) in order for such principle or practice to continue as a generally accepted accounting principle or practice, all reports and financial statements required hereunder with respect to Borrower or Parent may be prepared in accordance with such change, but all calculations and determinations to be made hereunder may be made in accordance with such change only after notice of such change is given to Lender and Lender agrees to such change insofar as it affects the accounting of Borrower.

“ GLB Act ” means The Gramm-Leach-Bliely Financial Services Modernization Act of 1999, as amended.

“ Governmental Authority ” means any nation or government, any agency, department, state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Governmental Requirement ” means any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other direction or requirement (including, without limitation, any of the foregoing which relate to environmental standards or controls, energy regulations and occupational, safety and health standards or controls) of any arbitrator, court or other Governmental Authority, which exercises jurisdiction over any Related Person or any of its Property.

“ Guaranty Obligation ” of any Person means any contract, agreement or understanding of such Person pursuant to which such Person guarantees, or in effect guarantees, any Indebtedness,

lease, dividends or other obligations (the “ Primary Obligations ”) of any other Person (the “ Primary Obligor ”) in any manner, whether directly or indirectly, contingently or absolutely, in whole or in part, including without limitation agreements:

(a) to purchase such Primary Obligation or any property constituting direct or indirect security therefor,

(b) to advance or supply funds (A) for the purchase or payment of any such Primary Obligation, or (B) to maintain working capital or other balance sheet conditions of the Primary Obligor or otherwise to maintain the net worth or solvency of the Primary Obligor,

(c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Primary Obligation of the ability of the Primary Obligor to make payment of such Primary Obligation; or

(d) otherwise to assure or hold harmless the owner of any such Primary Obligation against loss in respect thereof;

provided, that “ Guaranty Obligation ” shall not include endorsements that are made in the ordinary course of business of negotiable instruments or documents for deposit or collection. The amount of any Guaranty Obligation shall be deemed to be the maximum amount for which the guarantor may be liable pursuant to the agreement that governs such Guaranty Obligation, unless such maximum amount is not stated or determinable, in which case the amount of such obligation shall be the maximum reasonably anticipated liability thereon, as determined by such guarantor in good faith.

“ Hedging Arrangement ” means any forward sales contract, forward trade contract, interest rate swap agreement, interest rate cap agreement, or other contract pursuant to which Borrower has protected itself from the consequences of a loss in the value of a Mortgage Loan because of changes in interest rates or in the market value of mortgage loan assets.

“ Indebtedness ” of any Person at a particular date means the sum (without duplication) at such date of (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services or which is evidenced by a note, bond, debenture, or similar instrument, (b) all obligations of such Person under any Financing Lease, (c) all obligations of such Person in respect of letters of credit, acceptances, or similar obligations issued or created for the account of such Person, (d) all Guaranty Obligations of such Person, (e) all liabilities secured by any Lien on any property owned by such Person, whether or not such Person has assumed or otherwise become liable for the payment thereof, and (f) any liability of such Person in respect of unfunded vested benefits under an ERISA Plan and (g) all liabilities of such Person in respect of indemnities or repurchase obligations made in connection with the sale of Mortgage Loans.

“ Intercompany Loan ” means a loan or advance from a Related Person to an Affiliate or shareholder, member or partner of any Related Person.

“ Investor ” means any Person approved by Lender and listed on Schedule 1.1 , as such Schedule may be updated or supplemented from time to time; provided, however , that Lender shall deliver a list of all Persons approved as Investors by Lender upon each amendment of such Schedule by Lender, and an Investor shall be removed from such list upon the written direction of Lender.

“ Investment Property ” means a Single Family dwelling which is not the Principal Residence or Second/Vacation Property of the Obligor under the related Mortgage Loan.

“ Law ” means any statute, law, regulation, ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise, license, agreement or other governmental restriction of the United States or any state or political subdivision thereof. Any reference to a Law includes any amendment or modification to such Law, and all regulations, rulings, and other Laws promulgated under such Law.

“ Lender ” means Guaranty Bank and its successors and assigns.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (whether statutory or otherwise), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any Financing Lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction in respect of any of the foregoing).

“ Loan ” has the meaning given it in Section 2.1 .

“ Loan Balance ” means for any day, the principal balance of the Loans outstanding on such day.

“ Loan Document ” means any, and “ Loan Documents ” shall mean all, of this Agreement, the Note, the Security Instruments, and any and all other agreements, certificates or instruments now or hereafter executed and delivered by Borrower or any other Person in connection with, or as security for the payment or performance of any or all of the Obligations, as any of such may be renewed, amended or supplemented from time to time.

“ Market Value ” on any day shall be determined by Lender, in its sole discretion, based upon (a) information then available to Lender regarding quotes from dealers for the purchase of mortgage notes similar to the Mortgage Note that have been delivered to Lender pursuant to this Agreement or (b) sales prices actually received by Borrower for mortgage notes sold by Borrower during the immediately preceding thirty (30) day period similar to the Mortgage Note that have been delivered to Lender pursuant to this Agreement.

“ Material Adverse Effect ” means any material adverse effect on (a) the validity or enforceability of this Agreement, the Note or any other Loan Document, (b) the business, operations, total Property, prospects or condition (financial or otherwise) of any Related Person, (c) the collateral under any Security Instrument, or (d) the ability of any Related Person to fulfill

its obligations under this Agreement, the Note, or any other Loan Document to which it is a party.

“ Maximum Rate ” means, with respect to each Lender, the maximum nonusurious rate of interest that such Lender is permitted under applicable Law to contract for, take, charge, or receive with respect to its Loans.

“ MERS ” means Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor thereto.

“ MERS Agreement ” means those agreements by and among Borrower, Lender, MERS and MERSCORP, Inc., as amended, modified, supplemented, extended, restated or replaced from time to time.

“ MERS® System ” means the system of recording transfers of mortgages electronically maintained by MERS.

“ MIN ” means, with respect to each Mortgage Loan, the Mortgage Identification Number for such Mortgage Loan registered with MERS on the MERS® System.

“ MOM Loan ” means, with respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator or Borrower, as the case may be, of such Mortgage Loan and its successors and assignees.

“ Mortgage ” means a mortgage or deed of trust, on standard forms in form and substance satisfactory to Lender, securing a Mortgage Note and granting a perfected, first or second priority lien on residential real property consisting of land and a one-to-four-family dwelling thereon which is completed and ready for occupancy.

“ Mortgage Collateral ” means all Mortgage Notes (a) which are made payable to the order of Borrower or have been endorsed (without restriction or limitation) payable to the order of Borrower, (b) in which Lender has been granted and continues to hold a perfected first priority security interest, (c) which are in form and substance acceptable to Lender in its reasonable discretion, (d) which are secured by Mortgages, and (e) which conform in all respects with all the requirements for purchase of such Mortgage Note under the Take-Out Commitments and are valid and enforceable in accordance with their respective terms.

“ Mortgage Loan ” means a mortgage loan which is evidenced by a Mortgage Note and secured by a Mortgage, together with the rights and obligations of a holder thereof and payments thereon and proceeds therefrom.

“ Mortgage Note ” means the note or other evidence of indebtedness evidencing the indebtedness of an Obligor under a Mortgage Loan.

“ Net Income ” of any Person means, for any period, the net income of such Person (excluding extraordinary gains but including extraordinary losses) for such period, calculated in accordance with GAAP.

“ Net Worth ” of any Person means, as of any date, an amount equal to all Consolidated assets of such Person minus such Person’s Consolidated liabilities, each as determined in accordance with GAAP.

“ Note ” means any promissory note delivered by Borrower to Lender pursuant to Section 2.2 in the form attached hereto as Exhibit A and all renewals, modifications, amendments, restatements, and extensions thereof.

“ Obligations ” means all present and future Indebtedness, obligations, and liabilities of Borrower to Lender, and all renewals and extensions thereof, or any part thereof, arising pursuant to this Agreement or any other Loan Document, and all interest accrued thereon, and reasonable attorneys’ fees and other costs incurred in the drafting, negotiation, enforcement or collection thereof, regardless of whether such Indebtedness, obligations, and liabilities are direct, indirect, fixed, contingent, joint, several or joint and several.

“ Obligor ” means the Person or Persons obligated to pay the Indebtedness which is the subject of a Mortgage Loan.

“ Operating Account ” means the non-interest bearing demand checking accounts (whether one or more) established by Borrower with Lender to be used for Borrower’s operations.

“ Parent ” means The Ryland Group, Inc., a Maryland corporation, and owner of all of the outstanding capital stock of Borrower.

“ Parent Debt Agreement ” means that certain Credit Agreement, dated as of January 12, 2006, among the Parent, JPMorgan Chase Bank, N.A., as agent, and the lenders party thereto, and all amendments, modifications and supplements thereto and amendments and restatements thereof, and including any subsequent credit facilities refinancing any indebtedness thereunder.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any Governmental Authority succeeding to any of its functions.

“ Permitted Liens ” means (i) Liens in favor of Lender, (ii) a first Lien in respect of a Second Lien Loan, and (iii) ad valorem taxes and assessments not yet due and payable.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated organization, Governmental Authority, or any other form of entity.

“ Prime Loan ” means a Single Family Mortgage Loan which is secured by a first-lien or second-lien Mortgage and is a Conforming Loan, FHA Loan or VA Loan.

“ Principal Residence ” means a Single Family dwelling that the Obligor occupies as his or her primary residence.

“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Regulation U ” means Regulation U issued by the Board of Governors of the Federal Reserve System as in effect from time to time.

“ Regulation X ” means Regulation X issued by the Board of Governors of the Federal Reserve System as in effect from time to time.

“ Related Persons ” means Borrower and each of Borrower’s Subsidiaries.

“ Reportable Event ” means (1) a reportable event described in Sections 4043(c)(5) or (6) of ERISA or the regulations promulgated thereunder, or (2) any other reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder other than a reportable event not subject to the provision for 30-day notice to the PBGC pursuant to a waiver by the PBGC under Section 4043(a) of ERISA.

“ Required Mortgage Documents ” means, as to any Mortgage Loan, the items described on Schedule A to the Security Agreement.

“ Requirement of Law ” as to any Person means the charter and by-laws or other organizational or governing documents of such Person, and any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other determination, direction or requirement (including, without limitation, any of the foregoing which relate to environmental standards or controls, energy regulations and occupational, safety and health standards or controls) of any arbitrator, court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

“ Second Lien Loan ” means a Single Family Mortgage Loan which (i) is secured by a traditional closed-end second-lien Mortgage, and is a Conforming Loan, FHA Loan or VA Loan, (ii) has a CLTV less than or equal to 95%, and (iii) is not in excess of $100,000.

“ Second/Vacation Property ” means a Single Family dwelling that is not used for rental purposes and that the Obligor occupies for some portion of the year.

“ Security Agreement ” means the Security Agreement between Borrower and Lender dated of even date herewith in substantially the form attached as Exhibit E , as the same may from time to time be further supplemented, amended or restated.

“ Security Instrument ” means (a) the Security Agreement and (b) such other executed documents, instruments, certificates, agreements and financing statements as are or may be necessary to grant to Lender a perfected first prior and continuing security interest in and to all Mortgage Collateral, and any and all other agreements, certificates or instruments now or hereafter executed and delivered by Borrower in connection with, or as security for the payment or performance of, all or any of the Obligations, including Borrower’s obligations under the Note and this Agreement, as such agreements may be amended, modified or supplemented from time to time.

“ Servicing Agreements ” means all agreements between the Related Persons and Persons other than a Related Person pursuant to which Borrower undertakes to service Mortgage Loans.

“ Servicing Records ” means all contracts and other documents, books, records and other information (including without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) maintained with respect to the Servicing Rights.

“ Servicing Rights ” means all of right, title and interest of any Related Person in and under the Servicing Agreements, including, without limitation, the rights of Borrower to income and reimbursement thereunder.

“ Settlement Account ” means the non-interest bearing demand deposit account established by Borrower with Lender to be used for (i) the deposit of proceeds from the sale of Mortgage Collateral, and (ii) the payment of the Obligations; provided that (a) the Settlement Account shall be pledged to Lender for the benefit of Lender, (b) Borrower shall not be entitled to withdraw funds from the Settlement Account, (c) as long as no Event of Default has occurred and is continuing, to the extent that the deposit of proceeds from the sale of Mortgage Loans exceeds the Unit Collateral Value of such Mortgage Loans and any payments then due and owing under this Agreement or the Note, Lender shall transfer such excess amount to the Operating Account, and (d) if at any time the aggregate amount of funds in the Settlement Account is insufficient to pay any and all payments due and owing under this Agreement or the Note (such amount being referred to as the “ Deficiency ”), Lender shall transfer an amount equal to the Deficiency from the Operating Account to the Settlement Account.

“ Single Family ” means residential real property consisting of land and a completed one-to-eight unit single family dwelling thereon (including Principal Residences, Second/Vacation Property and Investment Property), which is fully completed and ready for occupancy, and which is not used for commercial purposes, is not a leasehold interest, and is not a manufactured or mobile home.

“ Subordinated Debt ” means Indebtedness of Borrower that has been subordinated to the payment of the Obligations in writing on terms acceptable to Lender.

“ Subsidiary ” means, with respect to any Person, any corporation, association, partnership, joint venture, or other business or corporate entity, enterprise or organization which is directly or indirectly (through one or more intermediaries) controlled by or owned fifty percent (50%) or more by such Person.

“ Take-Out Commitment ” means with respect to any Eligible Mortgage Loan, a written master commitment of an Investor to purchase a pool of Mortgage Loans or an individual commitment of an Investor to purchase an individual Mortgage Loan under which such Eligible Mortgage Loan(s) will be delivered to such Investor on terms satisfactory to Lender, in its reasonable discretion.

“ Tangible Net Worth ” means, as of any date, for any Person, the Net Worth of such Person minus all Consolidated assets of such Person which would be classified as intangible assets under GAAP, including but not limited to goodwill (whether representing the excess cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, deferred charges, and capitalized servicing rights.

“ Termination Event ” means (a) the occurrence with respect to any ERISA Plan of a Reportable Event, (b) the withdrawal of the Borrower or any ERISA Affiliate from an ERISA Plan during a plan year in which it was a “substantial employer,” as defined in Section 4001(a)(2) of ERISA, (c) the distribution to affected parties of a notice of intent to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate any ERISA Plan by the PBGC under Section 4042 of ERISA, or (e) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any ERISA Plan.

“ Total Indebtedness ” of any Person means, as of any date, the sum of (a) all Indebtedness of such Person as of such date prepared in accordance with GAAP and (b) the aggregate amount of Mortgage Loans purchased and remaining under any Mortgage Loan purchase facility of such Person.

“ UCC ” means the Texas Uniform Commercial Code, as the same may hereafter be amended.

“ UETA ” means the Texas Uniform Electronic Transaction Act, as amended from time to time.

“ Unencumbered Liquid Assets ” means, as of any date of determination, the sum of (a) United States cash which is not subject to any liens or security interests, and (b) Cash Equivalents which are not subject to any liens or security interests.

“ Unit Collateral Value ” means, on any day, with respect to each Eligible Mortgage Loan included in the Borrowing Base, the Applicable Advance Rate Percentage of the least of the following:

(i) the outstanding principal balance of the Mortgage Note constituting such Mortgage Loan;

(ii) the actual out-of-pocket cost to Borrower of such Mortgage Loan minus the amount of principal paid under such Mortgage Loan and delivered to Lender for application to the prepayment of the Loans;

(iii) if applicable, the amount at which an Investor has committed to purchase the Mortgage Loan pursuant to a Take-Out Commitment; or

(iv) the Market Value of the Mortgage Note constituting such Mortgage Loan.

provided that if any such Eligible Mortgage Loan included in the Borrowing Base becomes an Aged Loan, the Unit Collateral Value of such Mortgage Loan as determined by the above calculation shall be reduced by five percent (5%), and Borrower shall immediately, on such Eligible Mortgage Loan’s sixty-first (61st) day in the Borrowing Base, make repayment required by Section 2.5 ; and

provided further that if any such Aged Loan is included in the Borrowing Base for more than ninety (90) days, the Unit Collateral Value of such Mortgage Loan shall be reduced by an additional ten percent (10%), and Borrower shall immediately, on such Eligible Mortgage Loan’s ninety-first (91st) day in the Borrowing Base, make repayment required by Section 2.5 ; and

provided further that no Eligible Mortgage Loan may be included in the Borrowing Base for more than one hundred twenty (120) days, such that on the one hundred twenty-first (121st) day after such Eligible Mortgage Loan is first included in the Borrowing Base, the Unit Collateral Value of such Mortgage Loan shall be reduced to zero, and Borrower shall immediately make repayment required by Section 2.5 .

“ VA ” means the Veterans Administration and any successor thereto.

“ VA Loan ” means a Mortgage Loan guaranteed by the VA.

“ Wet Loan ” means an Eligible Mortgage Loan which is included in the Borrowing Base, but for which the Required Mortgage Documents have not been delivered to Lender.

Other Definitional Provisions .

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the above-defined meanings when used in the Note or any other Loan Document, certificate, report or other document made or delivered pursuant hereto.

(b) Each term defined in the singular form in Section 1.1 shall mean the plural thereof when the plural form of such term is used in this Agreement, the Note or any other Loan Document, certificate, report or other document made or delivered pursuant hereto, and each term defined in the plural form in Section 1.1 shall mean the singular thereof when the singular form of such term is used herein or therein.

(c) The words “hereof,” “herein,” “hereunder” and similar terms when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section, subsection, schedule and exhibit references herein are references to sections, subsections, schedules and exhibits to this Agreement unless otherwise specified. The word “or” is not exclusive, and the word “including” (in its various forms) means “including without limitation.”

(d) Unless the context otherwise requires or unless otherwise provided herein the terms defined in this Agreement which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, modifications, amendments and restatements of such agreement, instrument or document, provided that nothing contained in this section shall be construed to authorize any such renewal, extension, modification, amendment or restatement.

(e) As used herein, in the Note or in any other Loan Document, certificate, report or other document made or delivered pursuant hereto, accounting terms relating to any Person and not specifically defined in this Agreement or therein shall have the respective meanings given to them under GAAP.

Section 1.2 Exhibits and Schedules . All Exhibits and Schedules attached to this Agreement are incorporated by reference herein and made a part hereof for all purposes.

Section 1.3 Calculations and Determinations . All calculations under the Loan Documents of interest and of fees shall be made on the basis of actual days elapsed (including the first day but excluding the last) and a year of three hundred sixty (360) days. Each determination by Lender of amounts to be paid hereunder shall, in the absence of manifest error, be conclusive and binding. Unless otherwise expressly provided herein or unless Lender otherwise consents all financial statements and reports furnished to Lender hereunder shall be prepared and all financial computations and determinations pursuant hereto shall be made in accordance with GAAP. Lender shall deliver to Borrower an interest billing statement for each month on or before the fifth (5th) day of the next succeeding month, which interest billing statement shall set forth the interest accrued on the Loans for such month; provided that any failure or delay in delivering such interest billing or any inaccuracy therein shall not affect the Obligations.

ARTICLE II

AMOUNT AND TERMS OF LOANS

Section 2.1 Commitment and Loans . Subject to the terms and conditions contained in this Agreement, Lender agrees to make loans (“ Loans ”) to Borrower on a revolving credit basis from time to time on any Business Day from the date of this Agreement through the Drawdown Termination Date. The aggregate amount of all Loans requested in any Borrowing Request must be equal to the lesser of (i) an amount greater than or equal to $25,000 or (ii) an amount equal to the Commitment less the Loan Balance. Notwithstanding anything to the contrary, after giving effect to the transactions contemplated by the Borrowing Request pursuant to which a Loan is requested, and at all other times, the aggregate unpaid principal amount of all Loans outstanding shall not exceed the lesser of (a) the Collateral Value of the Borrowing Base, and (b) the Commitment.

Section 2.2 Promissory Note; Interest on the Note . The obligation of Borrower to repay the Loans made by Lender, together with interest accruing in connection therewith, shall be evidenced by a Note payable to the order of Lender. Interest on the Note shall be due and payable as provided herein and therein. The entire Loan Balance and all accrued and unpaid interest thereon shall be finally due and payable on the Drawdown Termination Date.

Section 2.3 Notice and Manner of Obtaining Loans . Borrower must give written notice (which may be sent by electronic mail), or telephonic notice promptly confirmed in writing, of each request for Loans. Each such written request or confirmation must be made in the form and substance of the “Borrowing Request” attached hereto as Exhibit B , duly completed. Each such Borrowing Request must:

(a) specify the aggregate amount of any such Borrowing of new Loans and the date on which such Loans are to be advanced; and

(b) be received by Lender not later than 2:00 p.m., Central time, on the day on which any such Loans are to be made.

With each delivery of a Borrowing Request to Lender, Borrower represents and warrants to Lender the following:

(i) Borrower is entitled to receive the requested Loan under the terms and conditions of this Agreement;

(ii) all items which Borrower is required to furnish to Lender pursuant to this Agreement accompany the Borrowing Request (or, if Wet Loans, shall be delivered to Lender in accordance with the Agreement);

(iii) all Mortgage Loans offered thereby conform in all respects with the applicable requirements set forth in this Agreement;

(iv) no Event of Default exists under this Agreement or would result from the Borrowing or the application of the proceeds therefrom;

(v) no change or event has occurred which with notice and/or the passage of time would constitute an Event of Default;

(vi) after giving effect to the Loan requested thereby the Loan Balance shall not exceed the lesser of (1) the Collateral Value of the Borrowing Base and (2) the Commitment; and

(vii) after giving effect to the Loans requested thereby, no Applicable Sublimit will be exceeded.

Additionally, with each Borrowing Request, Borrower represents and warrants that, except as permitted under this Agreement, Borrower holds with respect to each of the Mortgage Notes offered the following:

(i) unless delivered therewith, the original filed copy of the Mortgage relating to such Mortgage Note;

(ii) mortgagee policies of title insurance conforming to the requirements of the Lender or binding commitments for the issuance of same;

(iii) evidence of insurance policies insuring the mortgaged premises as required by the Lender; and

(iv) unless delivered therewith, an original of any executed Take-Out Commitment or document evidencing any Hedging Arrangement acceptable to Lender in its sole discretion relating to such Mortgage Note.

With the delivery of each Borrowing Request, Borrower agrees that it holds the above referenced items in trust for Lender, and will at any time deliver the same to Lender upon request or, upon

written instructions from Lender, to any Person designated by Lender, promptly, and in any event within two (2) Business Days after such request or instructions. Borrower further agrees that it will not deliver any of the above items, nor give, transfer, or assign any interest in same, to any Person other than Lender (or the Person or Persons designated by Lender) without the prior written consent of Lender.

Each such telephonic request shall be deemed a representation, warranty, acknowledgment and agreement by Borrower as to the matters which are required to be set out in such written confirmation. If all conditions precedent to such Loan have been met Lender will on the date requested promptly remit to Borrower the amount of such Loan in immediately available dollars, by crediting the Funding Account with immediately available funds in the amount of such Loan.

Section 2.4 Fees .

(a) In consideration of Lender’s commitment to make the Loans, Borrower will pay to Lender a non-refundable commitment fee determined on a daily basis by applying a rate of 12.5 basis points (0.125%) per annum to the Commitment on each day during the term of the Loans. This commitment fee shall be due and payable in advance for each Fiscal Quarter on the fifteenth day of such Fiscal Quarter.

(b) Borrower shall pay to Lender, a collateral handling fee in the amount of $10.00 for each Mortgage Loan file.

Section 2.5 Mandatory Repayments . If at any time the Loan Balance exceeds the lesser of (i) the Collateral Value of the Borrowing Base (as a result of an Applicable Sublimit being exceeded or otherwise) or (ii) the Commitment, then Borrower (x) shall repay the amount of such excess or (y) so long as the Loan Balance does not exceed the Commitment, pledge to Lender additional Eligible Mortgage Loans which have an aggregate Unit Collateral Value equal to or greater than such excess, in each case, within one (1) Business Day after written notice thereof is given by Lender to Borrower; provided that, after giving effect to any pledge of additional Eligible Mortgage Loans, the Unit Collateral Value of such Mortgage Loans when added to the Unit Collateral Value of all other Mortgage Loans in the same Mortgage Loan classification does not exceed the Applicable Sublimit for such Mortgage Loan classification.

Section 2.6 Payments to Lender . All payments of interest on the Note, all payments of principal, including any principal payment made with proceeds of Mortgage Collateral, and fees hereunder shall be made directly to Lender in federal or other immediately available funds before 1:00 pm (Central time) on the respective dates when due via wire transfer of immediately available funds to the Settlement Account. Borrower shall send notice to Lender before 1:00 p.m. (Central time) on the day any payment of principal or interest is received by Lender which sets forth the Loans against which such payment is to be applied. Any payment (or any payment received without a notice regarding application of such payment) received by Lender after such time will be deemed to have been made on the next following Business Day. Should any such payment become due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, in the case of a payment of principal or past due interest, interest shall accrue and be payable thereon for the period of such extension as provided in the Loan Document under which such payment is due.

Each payment under a Loan Document shall be payable at the place provided therein and, if no specific place of payment is provided, shall be payable at the place of payment of the Note. When Lender collects or receives money on account of the Obligations, Lender shall apply all such money so distributed, as follows:

(a) first, for the payment of all Obligations which are then due, and if such money is insufficient to pay all such Obligations, (i) first to any reimbursements due Lender under Section 5.5 , (ii) second, to the payment of the Loans then due, and (iii) then to the partial payment of all other Obligations then due in proportion to the amounts thereof, or as Lender shall otherwise agree;

(b) then for the prepayment of amounts owing under the Loan Documents if so specified by Borrower;

(c) then for the prepayment of principal on the Note, together with accrued and unpaid interest on the principal so prepaid; and

(d) last, for the payment or prepayment of any other Obligations.

All payments applied to principal or interest on any Note shall be applied first to any interest then due and payable, then to principal then due and payable, and last to any prepayment of principal and interest.

Section 2.7 Increased Cost and Reduced Return .

(a) If, after the date hereof, Lender shall have determined that the adoption of any applicable Law, rule, or regulation regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of Law) of any such Governmental Authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on the capital of Lender or any corporation controlling Lender, due to the obligations of Lender hereunder, to a level below that which Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then, within fifteen (15) days after demand by Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such reduction, but only to the extent that Lender has not been compensated therefor by any increase in the LIBOR.

(b) Lender shall promptly notify Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle Lender to compensation pursuant to this Section. In the event that Lender claims compensation under this Section, Lender shall furnish to Borrower a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. The statement shall describe the change that took place (e.g. citing the Law, rule, regulation or directive), an explanation as to how Lender determined that the reduction in the rate of return was due to its obligations under this Agreement and demonstrate the calculations utilized in arriving at the amount owed from

Borrower. In determining such amount, Lender shall act in good faith and may use any reasonable averaging and attribution methods.

ARTICLE III

CONDITIONS PRECEDENT

The obligation of Lender to make Loans hereunder is subject to fulfillment of the conditions precedent stated in this Article III .

Section 3.1 Initial Loan . The obligation of Lender to fund any Loan hereunder shall be subject to, in addition to the conditions precedent specified in Section 3.2 , the following terms and conditions:

(a) Borrower shall have delivered to Lender the following (each of the following documents being duly executed and delivered and in form and substance satisfactory to Lender, and, with the exception of the Note, each in a sufficient number of originals that Lender and its counsel may have an executed original of each document):

(i) an executed counterpart of this Agreement and of all instruments, certificates and opinions referred to in this Article III not theretofore delivered (except the Borrowing Request which is to be delivered at the time provided in Subsection 3.2(a) hereof);

(ii) the Note;

(iii) the Security Agreement dated of even date herewith;

(iv) a certificate of the Secretary or Assistant Secretary of Borrower setting forth (i) resolutions of its board of directors authorizing the execution, delivery, and performance of the Loan Documents to which it is a party and identifying the officers authorized to sign such instruments, (ii) specimen signatures of the officers so authorized, and (iii) articles of incorporation of Borrower certified by the appropriate Secretary of State as of a recent date, and (iv) bylaws of Borrower, certified as being accurate and complete;

(v) a certificate of the existence and good standing for Borrower in its state of incorporation or organization dated no earlier than fifteen days prior to the date hereof;

(vi) an opinion of counsel for Borrower in form and substance satisfactory to Lender;

(vii) a Borrowing Request and a Borrowing Base Certificate dated as of the date of the first Loan, certified by the Controller or Senior Vice President of Borrower;

(viii) a duly executed original of the MERS Agreement; and

(ix) such other documents, instruments, certificates and agreements (including, without limitation, UCC tax and lien search results) as Lender or its legal counsel may reasonably request at any time at or prior to the date of the initial Loan hereunder.

(b) No Person, other than Lender, holds any mortgage, pledge, lien, security interest or other charge or encumbrance in, against or to any of the Mortgage Loans identified by the Borrower as Mortgage Collateral or included in any computation of the Collateral Value of the Borrowing Base.

(c) Lender shall have received evidence satisfactory to it that all filings and other actions necessary or desirable to perfect and protect the Liens created by the Security Instruments shall have been completed (including, without limitation, the filing of financing statements on form UCC-1 and filing of UCC-3 amendments or termination statements).

(d) Borrower shall have paid all fees and reimbursements to be paid to Lender pursuant to any Loan Document, or otherwise due Lender and including reasonable fees (not to exceed $20,000) and reasonable expenses of Lender’s attorneys.

Section 3.2 All Loans . The obligation of Lender to fund any Loan pursuant to this Agreement is subject to the following further conditions precedent:

(a) Borrower shall have delivered to Lender a Borrowing Request dated as of the date of such Loan, certified by the Controller, a Vice President or Senior Vice President of Borrower, and the Required Mortgage Documents for all Eligible Mortgage Loans other than Wet Loans;

(b) all other Property in which Borrower has granted a Lien to Lender shall have been physically delivered to the possession of Lender, to the extent required to be so delivered under the Loan Documents;

(c) the representations and warranties of each Related Person contained in this Agreement or any Security Instrument (other than those representations and warranties which are by their terms expressly limited to the date of this Agreement) shall be true and correct in all material respects on and as of the date of such Loan, as though made on and as of such date, both before and after giving effect to the Borrowing and the application of the proceeds thereof;

(d) no Default or Event of Default shall have occurred and be continuing or would result from such Borrowing or the application of the proceeds therefrom;

(e) no change or event which constitutes a Material Adverse Effect shall have occurred and be continuing as of the date of such Loan;

(f) the Funding Account, the Settlement Account and the Operating Account shall be established and in existence;

(g) the making of such Loan shall not be prohibited by any Governmental Requirement or contravene or conflict with any Requirement of Law;

(h) the delivery to Lender of such other documents, instruments, certificates, agreements and opinions of counsel, including such documents, agreements, certificates and instruments as may be necessary or desirable to perfect, preserve or protect the priority of any Lien granted or intended to be granted hereunder or otherwise and including favorable written opinions of counsel with respect thereto, as Lender may reasonably request; and

(i) No Person, other than Lender, shall be listed in the field designated “interim funder” on the MERS® System with respect to any Mortgage Loans identified by the Borrower as Mortgage Collateral or included in any computation of the Collateral Value of the Borrowing Base.

Delivery to Lender of a Borrowing Request shall be deemed to constitute a representation and warranty by Borrower on the date thereof and on the date on which the Loan is made of the facts specified in subsections (c) and (d) of this Section.

ARTICLE IV

BORROWER REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

Section 4.1 Organization and Good Standing . Each Related Person (a) is a corporation, limited liability company or limited partnership duly incorporated or organized and existing in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) is duly qualified as a foreign entity and in good standing in all jurisdictions in which its failure to be so qualified could have a Material Adverse Effect, (c) has the corporate or organizational power and authority to own its properties and assets and to transact the business in which it is engaged and is or will be qualified in those states wherein it proposes to transact business in the future, and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, have a Material Adverse Effect.

Section 4.2 Authorization and Power . Each Related Person has the corporate or organizational power and requisite authority to execute, deliver and perform the Loan Documents to which it is a party; each Related Person is duly authorized to and has taken all action necessary to authorize it to, execute, deliver and perform the Loan Documents to which it is a party and is and will continue to be duly authorized to perform such Loan Documents.

Section 4.3 No Conflicts or Consents . Neither the execution and delivery by any Related Person of the Loan Documents to which it is a party, nor the consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will (a) materially contravene or conflict with any Requirement of Law to which any Related Person is subject, or any indenture, mortgage, deed of trust, or other agreement or instrument to which any Related Person is a party or by which any Related Person may be bound, or to which the Property of any Related Person may be subject, or (b) result in the creation or imposition of any Lien, other than the Lien of the Security Agreement, on the Property of any Related Person. Except as expressly set forth in Section 4.19, all actions, approvals, consents, waivers, exemptions, variances, franchises, orders, permits,

authorizations, rights and licenses required to be taken, given or obtained, as the case may be, from any Governmental Authority that are necessary in connection with the transactions contemplated by the Loan Documents have been obtained.

Section 4.4 Enforceable Obligations . This Agreement, the Note, and the other Loan Documents to which any Related Person is a party are the legal, valid and binding obligations of such Related Person, enforceable in accordance with their respective terms, except as limited by Debtor Laws.

Section 4.5 Priority of Liens . Upon delivery to Lender of each Borrowing Request, Lender shall have valid, enforceable, perfected, first priority Liens and security interests in each Mortgage Note identified therein.

Section 4.6 No Liens . Borrower has good and indefeasible title to the Mortgage Collateral free and clear of all Liens and other adverse claims of any nature, except for Permitted Liens.

Section 4.7 Financial Condition of Borrower . Borrower has delivered to Lender copies of its annual audited balance sheet as of December 31, 2006, and the related statements of income, stockholders’ equity and cash flows for the period ended such date; such financial statements fairly present the financial condition of Borrower as of such date and the results of operations of Borrower for the period ended on such date and have been prepared in accordance with GAAP, subject to normal year-end adjustments; as of the date thereof, there were no obligations, liabilities or Indebtedness (including material contingent and indirect liabilities and obligations or unusual forward or long-term commitments) of Borrower which are not reflected in such financial statements and no change which constitutes a Material Adverse Effect has occurred in the financial condition or business of Borrower since December 31, 2006. Borrower has also delivered to Lender its unaudited quarterly balance sheet for the period ending September 30, 2007 and management reports for September 30, 2007; such reports fairly and accurately present Borrower’s commitment position, pipeline position, servicing and production as of the end of such months and for the fiscal year to date for the periods ending on such dates.

Section 4.8 Full Disclosure . There is no material fact that Borrower has not disclosed to Lender which could have a Material Adverse Effect. None of (i) the financial statements referred to in Section 4.7 hereof, (ii) any Borrowing Request or officer’s certificate, or (iii) any statement delivered by any Related Person to Lender in connection with this Agreement, contains any untrue statement of material fact.

Section 4.9 No Default . No Related Person is in default under any material loan agreement, mortgage, security agreement or other material agreement or obligation to which it is a party or by which any of its Property is bound.

Section 4.10 No Litigation . There are no material actions, suits or legal, equitable, arbitration or administrative proceedings pending, or to the knowledge of Borrower threatened, against any Related Person the adverse determination of which could constitute a Material Adverse Effect.

Section 4.11 Taxes . All tax returns required to be filed by each Related Person in any jurisdiction have been filed and all taxes, assessments, fees and other governmental charges upon each Related Person or upon any of its properties, income or franchises have been paid prior to the time that such taxes could give rise to a Lien thereon, unless protested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been established on the books of such Related Person. No Related Person has any knowledge of any proposed tax assessment against any Related Person.

Section 4.12 Principal Office, etc . The principal office, chief executive office and principal place of business of Borrower is at the address set forth in Section 9.1 .

Section 4.13 Compliance with ERISA . No Related Person currently maintains, contributes to, is required to contribute to or has any liability, whether absolute or contingent, with respect to an ERISA Plan. With respect to all other employee benefit plans maintained or contributed to by each Related Person, each Related Person is in material compliance with ERISA.

Section 4.14 Subsidiaries . No Related Person presently has any Subsidiary or owns any stock in any other corporation or association except those listed in Schedule 4.14 . As of the date hereof, each Related Person owns, directly or indirectly, the equity interest in each of its Subsidiaries which is indicated in such exhibit.

Section 4.15 Indebtedness . No Related Person has any indebtedness outstanding other than the Indebtedness permitted by Section 6.2 .

Section 4.16 Permits, Patents, Trademarks, etc .

(a) Each Related Person has all permits and licenses necessary for the operation of its business.

(b) Each Related Person owns or possesses (or is licensed or otherwise has the necessary right to use) all patents, trademarks, service marks, trade names and copyrights, technology, know-how and processes, and all rights with respect to the foregoing, which are necessary for the operation of its business, without any known material conflict with the rights of others. The consummation of the transactions contemplated hereby will not alter or impair in any material respect any of such rights of each Related Person.

Section 4.17 Status Under Certain Federal Statutes . No Related Person is (a) a “public utility,” as such term is defined in the Federal Power Act, as amended, (b) an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1949, as amended or (c) a “rail carrier,” or a “person controlled by or affiliated with a rail carrier,” within the meaning of Title 49, U.S.C., and no Related Person is a “carrier” to which 49 U.S.C. §l1301(b)(1) is applicable.

Section 4.18 Securities Act . No Related Person has issued any unregistered securities in violation of the registration requirements of the Securities Act of 1933, as amended, or of any other Requirement of Law, and is not violating any rule, regulation, or requirement under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended.

No Related Person is required to qualify an indenture under the Trust Indenture Act of 1939, as amended, in connection with its execution and delivery of the Note.

Section 4.19 No Approvals Required . Other than consents and approvals previously obtained and actions previously taken, neither the execution and delivery of this Agreement, the Note and the other Loan Documents to which any Related Person is a party, nor the consummation of any of the transactions contemplated hereby or thereby requires the consent or approval of, the giving of notice to, or the registration, recording or filing by any Related Person of any document with, or the taking of any other action in respect of, any Governmental Authority which has jurisdiction over each Related Person or any of its Property, except for (a) the filing of the Uniform Commercial Code financing statements and other similar filings to perfect the interest of Lender in the Collateral, and (b) such other consents, approvals, notices, registrations, filings or action as may be required in the ordinary course of business of the Related Persons in connection with the performance of the obligations of the Related Persons hereunder.

Section 4.20 Survival of Representations . All representations and warranties by Borrower herein shall survive the execution and delivery of this Agreement, the Note, the other Loan Documents and the funding of the Loans, and any investigation at any time made by or on behalf of Lender shall not diminish the right of Lender to rely thereon.

Section 4.21 Compliance with Laws . Borrower is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, including ERISA and FIRREA, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith would not likely be expected to have a Material Adverse Effect.

Section 4.22 Payment of Obligations . Borrower is not in default in the payment and discharge of its material obligations and liabilities, including all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower.

Section 4.23 Individual Mortgage Loans . Borrower hereby represents with respect to each Mortgage Note and Mortgage Loan that is part of the Collateral:

(a) Borrower has good and marketable title to each Mortgage Note and Mortgage, was the sole owner thereof and had full right to pledge the Mortgage Loan to Lender free and clear of any Lien other than Permitted Liens;

(b) To the knowledge of Borrower, there is no default, breach, violation or event of acceleration existing under any Mortgage or the related Mortgage Note and there is no event which, with the passage of time or with notice and/or the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration and no such default, breach, violation or event of acceleration has been waived;

(c) To the knowledge of Borrower, the physical condition of the Property subject to the Mortgage has not deteriorated since the date of origination of the related secured Mortgage Loan (normal wear and tear excepted) and there is no proceeding pending for the total or partial condemnation of any Mortgaged Property;

(d) Each Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the related Property subject to the Mortgage of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise, by judicial foreclosure;

(e) Each Mortgage Loan is a first lien or second lien Single Family loan, and has been underwritten by the originator thereof in accordance with such originator’s then current underwriting guidelines, which guidelines have been previously submitted to and approved by Lender; provided that (i) the aggregate amount of Second Lien Loans does not exceed the Applicable Sublimit for Second Lien Loans and (ii) the aggregate amount of all Wet Loans does not exceed the Applicable Sublimit for Wet Loans;

(f) Each Mortgage Note is either (i) payable in monthly installments of principal and interest, with interest payable in arrears, and requires a monthly payment which is sufficient to amortize the original principal balance over the original term, not to exceed forty (40) years, and to pay interest at the related interest rate, or (ii) payable in monthly installments of interest only, with interest payable in arrears, with principal payments to begin no later than ten (10) years from closing with payments which are sufficient to fully amortize the original principal balance over a period not to exceed forty (40) years; and no Mortgage Note provides for any extension of the original term;

(g) No Mortgage Loan is a loan in respect of either the purchase of a manufactured home or mobile home or the purchase of the land on which a manufactured home or mobile home will be placed;

(h) The origination practices used by the originator of the Mortgage Loans and the collection practices used by the Borrower with respect to each Mortgage Loan have been in all material respects legal, proper, prudent and customary in the loan origination and servicing business;

(i) Each Mortgage Loan was originated in material compliance with all applicable Laws and no fraud or misrepresentation was committed by any Person in connection therewith; and

(j) For each Mortgage Loan, Borrower has obtained closing protection letters from the underwriter for the respective title insurance policy.

Section 4.24 Environmental Matters . In the ordinary course of each Related Person’s business, the officers and managers of each Related Person consider the effect of Environmental Laws on the business of such Related Person, in the course of which they identify and evaluate potential risks and liabilities accruing to such Related Person due to Environmental Laws. On the basis of this consideration, each Related Person has reasonably concluded that neither

violation of nor compliance with Environmental Laws can reasonably be expected to have a Material Adverse Effect on the business or financial condition of such Related Person or on the ability of Borrower to perform the Obligations. No Related Person has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect on the business or financial condition of the Related Persons, taken as a whole, or on the ability of Borrower to perform the Obligations.

Section 4.25 Status as Approved Seller/Servicer . Borrower is an approved Seller/Servicer for FNMA and FHLMC in good standing and is an approved lender with FHA, VA and HUD.

Section 4.26 Regulation U . Borrower has not, directly or indirectly, used any of the proceeds of the Loans for the purpose, whether immediate, incidental or ultimate, of buying any “margin stock” or of maintaining, reducing or retiring any Indebtedness originally incurred to purchase a stock that is currently any “margin stock,” or for any other purpose which might constitute this transaction a “purpose credit,” in each case within the meaning of Regulation U, or otherwise taken or permitted to be taken any action which would involve a violation of Regulation U or of Regulation T (12 C.F.R. 220, as amended) or Regulation X (12 C.F.R. 224, as amended) or any other regulation of such board.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Related Person shall at all times comply with (or cause compliances with) the covenants contained in this Article V , from the date hereof and for so long as any part of the Obligations or the Commitment is outstanding unless Lender has agreed otherwise.

Section 5.1 Financial Statements and Reports .

(a) Borrower shall furnish to Lender the following, all in form and detail reasonably satisfactory to Lender:

(i) Promptly after becoming available, and in any event within ninety (90) days after the close of each Fiscal Year, Borrower’s audited Consolidated balance sheet as of the end of such Fiscal Year, and the related audited Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the preceding Fiscal Year. Such financial statements shall be unqualified and shall be accompanied by the related audit report of independent certified public accountants acceptable to Lender which report shall be to the effect that such statements have been prepared in accordance with GAAP applied on a basis consistent with prior periods except for such changes in such principles with which the independent public accountants shall have concurred;

(ii) Promptly after becoming available, and in any event within ninety (90) days after the close of each Fiscal Year, Parent’s audited Consolidated and consolidating balance sheet as of the end of such Fiscal Year, and the related audited Consolidated and consolidating statements of income, stockholders’ equity and cash flows of Parent for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the preceding Fiscal Year, such financial statements shall be unqualified and shall be accompanied by the related audit report of independent certified public accountants acceptable to Lender which report shall be to the effect that such statements have been prepared in accordance with GAAP applied on a basis consistent with prior periods except for such changes in such principles with which the independent public accountants shall have concurred;

(iii) Promptly after becoming available, and in any event within forty-five (45) days after the end of each Fiscal Quarter, including the fourth Fiscal Quarter in each Fiscal Year, a Consolidated balance sheet of Borrower as of the end of such Fiscal Quarter and the related Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such Fiscal Quarter and the period from the first day of the then current Fiscal Year through the end of such Fiscal Quarter, certified by the Controller or other executive officer of Borrower to have been prepared in accordance with GAAP applied on a basis consistent with prior periods;

(iv) Promptly after being requested by Lender but not more than twice during any calendar year (unless a Default or Event of Default shall exist), and in any event within thirty (30) days after receiving such request in writing, a Consolidated balance sheet of Borrower as of the end of the calendar month immediately preceding such request and the related Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such month and the period from the first day of the then current Fiscal Year through the end of such month, certified by the Controller or other executive officer of Borrower to have been prepared in accordance with GAAP applied on a basis consistent with prior periods.

(v) Promptly after becoming available, and in any event within forty-five (45) days after the end of each Fiscal Quarter, a Consolidated and consolidating balance sheet of Parent as of the end of such Fiscal Quarter and the related Consolidated and consolidating statements of income, stockholders’ equity and cash flows of Parent for such Fiscal Quarter and the period from the first day of the then current Fiscal Year through the end of such Fiscal Quarter, certified by the chief financial officer or other executive officer of Parent to have been prepared in accordance with GAAP applied on a basis consistent with prior periods;

(vi) Promptly and in any event within (x) forty-five (45) days after the end of each Fiscal Quarter of Borrower and (y) within ninety (90) days after the end of each Fiscal Year of Borrower, a completed Officer’s Certificate in the form of Exhibit C attached hereto, executed by the President, Controller or executive officer of Borrower;

(vii) Promptly and in any event within ninety (90) days of the beginning of each Fiscal Year, an annual operating budget of Borrower for such Fiscal Year, in form and substance satisfactory to Lender;

(viii) Promptly and in any event within thirty (30) days after the end of each calendar month, a monthly pipeline report in form and substance satisfactory to Lender;

(ix) Promptly and in any event within forty-five (45) days after the end of each Fiscal Quarter, a mortgage loan production report as of the end of such Fiscal Quarter, reflecting Borrower’s Mortgage Loan production and acquisition volumes during such Fiscal Quarter, and such other similar information as reasonably requested by Lender to be in such report;

(x) Promptly and in any event within seven (7) days after the end of each week, a hedging coverage report showing, in detail and form satisfactory to Lender, Borrower’s hedging coverage of all Eligible Mortgage Loans subject to a Hedging Arrangement;

(xi) Promptly upon request by Lender, but not more than once per Fiscal Quarter (unless a Default or Event of Default shall exist), a management report in form and substance acceptable to Lender including, without limit

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CREDIT AGREEMENT

Loan Agreement

GUARANTY BANK | RYLAND MORTGAGE COMPANY

ARTICLE I GENERAL TERMS

Section 1.1 Certain Definitions . As used in this Agreement, the following terms have the following meanings:

(a) Such Mortgage Loan is a binding and valid obligation of the Obligor thereon, in full force and effect and enforceable in accordance with its terms, except as enforceability may be limited by Debtor Laws;

(b) The Mortgage Note evidencing such Mortgage Loan is genuine in all respects as appearing on its face and as represented in the books and records of Borrower, and all information set forth therein is true and correct;

(d) No payment under such Mortgage Loan is more than thirty (30) days past due the payment due date set forth in the underlying Mortgage Note and Mortgage;

(g) All advance payments and other deposits on such Mortgage Loan have been paid in cash, and no part of said sums has been loaned, directly or indirectly, by Borrower to the Obligor, and, other than as disclosed to Lender in writing, there have been no prepayments;

(h) Such Mortgage Loan will be free and clear of all Liens, except Permitted Liens;

(i) The Property covered by such Mortgage Loan is insured against loss or damage by fire and all other hazards normally included within standard extended coverage in accordance with the provisions of such Mortgage Loan with Borrower named as a loss payee thereon;

(j) Such Mortgage Loan is secured by a first Mortgage, or in the case of any Second Lien Loan, a second Mortgage, on Single Family property;

(k) The date of origination of such Mortgage Loan is not more than thirty (30) days prior to the date such Mortgage Loan was first included in the Borrowing Base;

(l) Such Mortgage Loan has not been included in the Borrowing Base for more than one hundred and twenty (120) days;

(m) If such Mortgage Loan is included in the Borrowing Base and has been withdrawn from the possession of the Lender on terms and subject to conditions set forth in the Security Agreement:

Value of other Mortgage Loans which have been similarly released to Borrower and have not been returned does not exceed ten percent (10%) of the Commitment;

(n) Such Mortgage Loan is subject to (A) a Take-Out Commitment which is in full force and effect or (B) a Hedging Arrangement which is acceptable to the Lender in its sole and absolute discretion;

(o) Such Mortgage Loan is a Prime Loan;

(p) If such Mortgage is a Second Lien Loan, the Unit Collateral Value of such Mortgage Loan when added to the Collateral Value of all other Second Lien Loans does not exceed the Applicable Sublimit for Second Lien Loans;

(r) The Property covered by such Mortgage Loan is located within the fifty United States;

(s) Such Mortgage Loan has been underwritten by the originator thereof in accordance with such originator’s then current underwriting guidelines, which underwriting guidelines have been previously approved by Lender; and

(t) The representations and warranties made by the Borrower in Section 4.23 with respect to each Mortgage Note and Mortgage Loan are true and correct.

(a) to purchase such Primary Obligation or any property constituting direct or indirect security therefor,

(b) to advance or supply funds (A) for the purchase or payment of any such Primary Obligation, or (B) to maintain working capital or other balance sheet conditions of the Primary Obligor or otherwise to maintain the net worth or solvency of the Primary Obligor,

(c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Primary Obligation of the ability of the Primary Obligor to make payment of such Primary Obligation; or

(d) otherwise to assure or hold harmless the owner of any such Primary Obligation against loss in respect thereof;

(i) the outstanding principal balance of the Mortgage Note constituting such Mortgage Loan;

(ii) the actual out-of-pocket cost to Borrower of such Mortgage Loan minus the amount of principal paid under such Mortgage Loan and delivered to Lender for application to the prepayment of the Loans;

(iii) if applicable, the amount at which an Investor has committed to purchase the Mortgage Loan pursuant to a Take-Out Commitment; or

(iv) the Market Value of the Mortgage Note constituting such Mortgage Loan.

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the above-defined meanings when used in the Note or any other Loan Document, certificate, report or other document made or delivered pursuant hereto.

(e) As used herein, in the Note or in any other Loan Document, certificate, report or other document made or delivered pursuant hereto, accounting terms relating to any Person and not specifically defined in this Agreement or therein shall have the respective meanings given to them under GAAP.

Section 1.2 Exhibits and Schedules . All Exhibits and Schedules attached to this Agreement are incorporated by reference herein and made a part hereof for all purposes.

(a) specify the aggregate amount of any such Borrowing of new Loans and the date on which such Loans are to be advanced; and

(b) be received by Lender not later than 2:00 p.m., Central time, on the day on which any such Loans are to be made.

(i) Borrower is entitled to receive the requested Loan under the terms and conditions of this Agreement;

(ii) all items which Borrower is required to furnish to Lender pursuant to this Agreement accompany the Borrowing Request (or, if Wet Loans, shall be delivered to Lender in accordance with the Agreement);

(iii) all Mortgage Loans offered thereby conform in all respects with the applicable requirements set forth in this Agreement;

(iv) no Event of Default exists under this Agreement or would result from the Borrowing or the application of the proceeds therefrom;

(v) no change or event has occurred which with notice and/or the passage of time would constitute an Event of Default;

(vi) after giving effect to the Loan requested thereby the Loan Balance shall not exceed the lesser of (1) the Collateral Value of the Borrowing Base and (2) the Commitment; and

(vii) after giving effect to the Loans requested thereby, no Applicable Sublimit will be exceeded.

(i) unless delivered therewith, the original filed copy of the Mortgage relating to such Mortgage Note;

(ii) mortgagee policies of title insurance conforming to the requirements of the Lender or binding commitments for the issuance of same;

(iii) evidence of insurance policies insuring the mortgaged premises as required by the Lender; and

(iv) unless delivered therewith, an original of any executed Take-Out Commitment or document evidencing any Hedging Arrangement acceptable to Lender in its sole discretion relating to such Mortgage Note.

Section 2.4 Fees .

(b) Borrower shall pay to Lender, a collateral handling fee in the amount of $10.00 for each Mortgage Loan file.

(b) then for the prepayment of amounts owing under the Loan Documents if so specified by Borrower;

(c) then for the prepayment of principal on the Note, together with accrued and unpaid interest on the principal so prepaid; and

(d) last, for the payment or prepayment of any other Obligations.

Section 2.7 Increased Cost and Reduced Return .

Borrower. In determining such amount, Lender shall act in good faith and may use any reasonable averaging and attribution methods.

ARTICLE III CONDITIONS PRECEDENT

Section 3.1 Initial Loan . The obligation of Lender to fund any Loan hereunder shall be subject to, in addition to the conditions precedent specified in Section 3.2 , the following terms and conditions:

(i) an executed counterpart of this Agreement and of all instruments, certificates and opinions referred to in this Article III not theretofore delivered (except the Borrowing Request which is to be delivered at the time provided in Subsection 3.2(a) hereof);

(ii) the Note;

(iii) the Security Agreement dated of even date herewith;

ARTICLE I

GENERAL TERMS

ARTICLE III

CONDITIONS PRECEDENT