Exhibit 10.42
Execution Version
AMENDMENT NO. 1
TO AMENDED AND RESTATED
CREDIT AGREEMENT
     This Amendment No. 1 to Amended and Restated Credit Agreement, dated as of
March 13, 2007 (this “Amendment”), is entered into among Technical Olympic USA,
Inc., a Delaware corporation (the “Administrative Borrower”), and each
Subsidiary Borrower (as defined in the Credit Agreement (as defined below) and,
together with the Administrative Borrower, the “Borrowers”) and the Lenders (as
defined below) listed on the signature pages hereto, and amends the Amended and
Restated Credit Agreement dated as of January 30, 2007 (as amended to the date
hereof and as the same may be further amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”) entered into among the
Borrowers, the institutions from time to time party thereto as lenders (the
“Lenders”), the Issuers (as defined in the Credit Agreement), Citicorp North
America, Inc., as administrative agent (in such capacity, the “Administrative
Agent”), and the other Agents and Arrangers named therein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Credit Agreement.
W I T N E S S E T H :
     Whereas, the Borrowers have requested that the Lenders amend the Credit
Agreement to effect the changes described below;
     Now, Therefore, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereto hereby agree as follows:
Section 1. Amendments to the Credit Agreement
     (a) The pricing grid set forth in the definition of “Applicable Margin” in
the Credit Agreement is hereby deleted in its entirety and replaced with the
following:

                                            Eurodollar   Base Rate   Letters of
Level   Leverage Ratio   Ratings   Rate Loans   Loans   Credit
1
  Less than or equal to 1.0   Ba1/BB+ or higher     1.50 %     -0-       1.05 %
 
                               
2
  Greater than 1.0 but less than or equal to 1.25   Ba2/BB     1.60 %     0.10 %
    1.15 %
 
                               

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

                                            Eurodollar   Base Rate   Letters of
Level   Leverage Ratio   Ratings   Rate Loans   Loans   Credit
3
  Greater than 1.25 but less than or equal to 1.50   Ba3/BB-     1.70 %     0.20
%     1.30 %
 
                               
4
  Greater than 1.50 but less than or equal to 1.75   B1/B+     1.90 %     0.40 %
    1.50 %
 
                               
5
  Greater than 1.75   B2/B or lower     2.25 %     0.75 %     1.70 %

     (b) Section 5.3 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
The Administrative Borrower shall maintain an Interest Coverage Ratio, measured
as of the last day of each fiscal quarter ending after the Original Effective
Date, for the four fiscal quarter period ending on such day, of greater than or
equal to the applicable ratio set forth in the table below:

      Fiscal Quarter   Minimum Interest Coverage Ratio
Fiscal quarters ending on or after December 31, 2006 and prior to September 30,
2007
  2.00 to 1
 
   
Fiscal quarters ending on or after September 30, 2007 and prior to March 31,
2008
  1.35 to 1
 
   
Fiscal quarters ending on or after March 31, 2008
  2.00 to 1

     Section 2. Conditions Precedent to the Effectiveness of this Amendment
     This Amendment shall become effective as of the date (the “Effective Date”)
when, and only when, each of the following conditions precedent shall have been
satisfied or waived by the Administrative Agent:
     (a) Executed Counterparts. The Administrative Agent shall have received
this Amendment duly executed by each Borrower and the Requisite Lenders.

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
     (b) Corporate and Other Proceedings. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Amendment shall be reasonably satisfactory in
all respects to the Administrative Agent.
     (c) No Default or Event of Default. After giving effect to this Amendment,
no Default or Event of Default shall have occurred and be continuing.
     (d) Amendment Fee Paid. The Borrowers shall have paid a cash fee (the
“Amendment Fee”) to each Lender that executes and delivers a signature page to
this Amendment not later than 5:00 p.m. (New York City time) on March 9, 2007 in
an amount equal to 0.25% of the aggregate amount of the Revolving Credit
Commitment of such Lender.
     (e) Costs and Expenses Paid. The Borrowers shall have paid all costs and
invoiced out-of-pocket expenses of the Administrative Agent then due under
Section 10.3 of the Credit Agreement, including invoiced expenses incurred in
connection with the preparation, reproduction, execution and delivery of this
Amendment (including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel) and all other costs, expenses and fees then due under any
Loan Document.
     Section 3. Representations and Warranties
     On and as of the Effective Date, after giving effect to this Amendment,
each Borrower hereby represents and warrants to the Administrative Agent and
each Lender as follows:
     (a) this Amendment has been duly authorized, executed and delivered by each
Borrower and constitutes the legal, valid and binding obligations of such
Borrower enforceable against such Borrower in accordance with its terms and the
Credit Agreement as amended by this Amendment and constitutes the legal, valid
and binding obligation of such Borrower enforceable against such Borrower in
accordance with its terms, in each case, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity
or at law;
     (b) each of the representations and warranties contained in Article IV of
the Credit Agreement and each other Loan Document is true and correct in all
material respects on and as of the Effective Date, as if made on and as of such
date and except to the extent that such representations and warranties
specifically relate to a specific date, in which case such representations and
warranties shall be

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
true and correct in all material respects as of such specific date; provided,
however, that references therein to the “Credit Agreement” shall be deemed to
refer to the Credit Agreement as amended hereby and after giving effect to the
consents and waivers set forth herein; and
     (c) no Default or Event of Default has occurred and is continuing.
     Section 4. Reference to the Effect on the Loan Documents
     (a) As of the Effective Date, each reference in the Credit Agreement to
“this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and
each reference in the other Loan Documents to the Credit Agreement (including,
without limitation, by means of words like “thereunder”, “thereof” and words of
like import), shall mean and be a reference to the Credit Agreement as amended
hereby, and this Amendment and the Credit Agreement shall be read together and
construed as a single instrument. Each of the table of contents and lists of
Exhibits and Schedules of the Credit Agreement shall be amended to reflect the
changes made in this Amendment as of the Effective Date.
     (b) Except as expressly amended hereby or specifically waived above, all of
the terms and provisions of the Credit Agreement and all other Loan Documents
are and shall remain in full force and effect and are hereby ratified and
confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of the Lenders, the Borrowers, Joint Lead Arrangers or the agents under
any of the Loan Documents, nor constitute a waiver or amendment of any other
provision of any of the Loan Documents or for any purpose except as expressly
set forth herein.
     (d) This Amendment is a Loan Document.
     (e) Each Subsidiary Borrower hereby reaffirms its obligations as a
Guarantor under the Guaranty in all respects.
     Section 5. Execution in Counterparts
     This Amendment may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
attached to a single counterpart so that all signature pages are attached to the
same document. Delivery of an executed counterpart by telecopy or electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment.
     Section 6. Governing Law
     This Amendment and the rights and obligations of the parties shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York.
     Section 7. Section Titles
     The section titles contained in this Amendment are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto, except when used to reference a section.
Any reference to the number of a clause, sub-clause or subsection of any Loan
Document immediately followed by a reference in parenthesis to the title of the
section of such Loan Document containing such clause, sub-clause or subsection
is a reference to such clause, sub-clause or subsection and not to the entire
section; provided, however, that, in case of direct conflict between the
reference to the title and the reference to the number of such section, the
reference to the title shall govern absent manifest error. If any reference to
the number of a section (but not to any clause, sub-clause or subsection
thereof) of any Loan Document is followed immediately by a reference in
parenthesis to the title of a section of any Loan Document, the title reference
shall govern in case of direct conflict absent manifest error.
     Section 8. Notices
     All communications and notices hereunder shall be given as provided in the
Credit Agreement.
     Section 9. Severability
     The fact that any term or provision of this Agreement is held invalid,
illegal or unenforceable as to any person in any situation in any jurisdiction
shall not affect the validity, enforceability or legality of the remaining terms
or provisions hereof or the validity, enforceability or legality of such
offending term or provision in any other situation or jurisdiction or as applied
to any person.
     Section 10. Successors
     The terms of this Amendment shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
     Section 11. Waiver of Jury Trial
     Each of the parties hereto irrevocably waives trial by jury in any action
or proceeding with respect to this Amendment or any other Loan Document.
[SIGNATURE PAGES FOLLOW]

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
     In Witness Whereof, the parties hereto have caused this Amendment to be
executed by their respective officers, trustees and general partners thereunto
duly authorized, as of the date first written above.

            TECHNICAL OLYMPIC USA, INC.,
      as the Administrative Borrower
      By:   /s/ Stephen Wagman         Name:   Stephen Wagman        Title:  
EVP & CFO   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            Subsidiary Borrowers:

ENGLE HOMES DELAWARE, INC.
ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.
ENGLE/JAMES LLC
MCKAY LANDING LLC
NEWMARK HOMES PURCHASING, L.P.
NEWMARK HOMES. L.L.C.
NEWMARK HOMES, L.P.
PREFERRED BUILDERS REALTY, INC.
SILVERLAKE INTERESTS, L.C.
TOI, LLC
TOUSA, LLC
TOUSA ASSOCIATES SERVICES COMPANY
TOUSA DELAWARE, INC.
TOUSA FUNDING, LLC
TOUSA HOMES, INC.
TOUSA HOMES, L.P.
TOUSA HOMES INVESTMENT #1, INC.
TOUSA HOMES FLORIDA, L.P.
TOUSA HOMES INVESTMENT #2, INC.
TOUSA HOMES INVESTMENT #2, LLC
TOUSA REALTY, INC.
TOUSA INVESTMENT #2, INC.
TOUSA HOMES ARIZONA, LLC
TOUSA HOMES COLORADO, LLC
TOUSA HOMES NEVADA, LLC
TOUSA HOMES MID-ATLANTIC HOLDING, LLC
TOUSA HOMES MID-ATLANTIC, LLC
TOUSA MID-ATLANTIC INVESTMENT, LLC
TOUSA VENTURES, LLC
TOUSA/WEST HOLDINGS, INC.
LORTON SOUTH CONDOMINIUM, LLC
ENGLE HOMES COMMERCIAL CONSTRUCTION, LLC
LB/TE #1, LLC
     

             
 
  By:   /s/ Stephen Wagman
 
   
 
  Name:   Stephen Wagman    
 
  Title:   EVP    

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

            Subsidiary Borrowers (continued):

NEWMARK HOMES BUSINESS TRUST
     

         
 
  By:   /s/ Stephen Wagman
 
       
 
  Name:   Stephen Wagman
 
  Title:   CO Managing TTEE

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

            CITICORP NORTH AMERICA, INC.,
as Administrative Agent and a Lender
      By:   /s/ Marni McManus         Name:   Marni McManus        Title:   Vice
President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            CITIBANK, N.A., as a Lender
      By:   /s/ Christine M. Kanicki         Name:   Christine M. Kanicki       
Title:   Attorney - In - Fact   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

           
DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender 
      By:           Name:           Title:        

                  By:           Name:           Title:      

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            JPMORGAN CHASE BANK, N.A., as a Lender
      By:   /s/ John P. McDonagh         Name:   John P. McDonagh       
Title:   Managing Director   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            WACHOVIA BANK, N.A., as a Lender
      By:   /s/ R. Scott Holtzapple         Name:   R. Scott Holtzapple       
Title:   Senior Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            BANK OF AMERICA, N.A., as a Lender
      By:   /s/ Jonathan Barnes         Name:   Jonathan Barnes        Title:  
Vice President   

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

           
BANK OF THE WEST, a California Banking
Corporation, as a Lender

      By:   /s/ Jan Manista         Name:   Jan Manista        Title:   Vice
President     

                  By:   /s/ Gary Seferian         Name:   Gary Seferian       
Title:   SVP   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            BRANCH BANKING AND TRUST COMPANY, as a Lender
      By:   /s/ Anne C. Grady         Name:   Anne C. Grady        Title:   Vice
President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            BANK UNITED, FSB, as a Lender
      By:           Name:           Title:      

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            COMPASS BANK, an Alabama banking corporation, as a Lender
      By:   /s/ Johanna Duke Paley         Name:   Johanna Duke Paley       
Title:   Senior Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            COMERICA BANK, as a Lender
      By:   /s/ Charles Weddell         Name:   Charles Weddell        Title:  
Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

           
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender

      By:   /s/ Karim Blasetti         Name:   Karim Blasetti        Title:  
Vice President     

                  By:   /s/ Laurence LaPeyre         Name:   Laurence LaPeyre   
    Title:   Associate   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            DK ACQUISITION PARTNERS, L.P., as a Lender
      By:           Name:           Title:      

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

           
FORTIS BANK S.A./N.V., CAYMAN ISLANDS BRANCH, as a Lender

      By:           Name:           Title:        

                  By:           Name:           Title:      

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            GRAND CENTRAL ASSET TRUST SAN SERIES, as a Lender
      By:           Name:           Title:      

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            GUARANTY BANK, as a Lender
      By:   /s/ Randall Reid         Name:   Randall Reid        Title:   Senior
Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            KEYBANK NATIONAL ASSOCIATION, as a Lender
      By:   /s/ Tayven Hike         Name:   Tayven Hike, CFA        Title:  
Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

                 
NATIXIS (fka NATEXIS BANQUES POPULAIRES), as a Lender
   
 
           
 
  By:   /s/ Marie Edith Dugeny    
 
                Name: Marie Edith Dugeny         Title: Managing Director, Real
Estate Finance    
 
           
 
  By:   /s/ Guillaume De Parscau    
 
                Name: Gullaume De Parscau         Title: Managing Director,
Business Development    

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

            NATIONAL CITY BANK, as a Lender
      By:   /s/ Timothy M. Brown         Name:   Timothy M. Brown       
Title:   Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            PNC BANK, NATIONAL ASSOCIATION, as a Lender
      By:   /s/ Douglas G. Paul         Name:   Douglas G. Paul        Title:  
Senior Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            QUATTRO SPECIAL SITUATIONS, LLC, as a Lender
      By:   /s/ Patrick Criscillo         Name:   Patrick Criscillo       
Title:   CFO   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            RAYMOND JAMES BANK, FSB, as a Lender
      By:   /s/ Thomas F. Macina         Name:   Thomas F. Macina       
Title:   Senior Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            SOVEREIGN BANK, as a Lender
      By:   /s/ Erin T. Aslakson         Name:   Erin T. Aslakson       
Title:   Assistant Vice President   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            UBS LOAN FINANCE, LLC, as a Lender
      By:   /s/ Irja R. Otsa         Name:   Irja R. Otsa        Title:  
Associate Director Banking Products Services, US     

                  By:   /s/ Richard L. Tavrow         Name:   Richard L. Tavrow 
      Title:   Director Banking Products Services, US   

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            U.S. BANK NATIONAL ASSOCIATION, as a Lender
      By:   /s/ David Kopolow         Name:   David Kopolow        Title:   SVP 
 

 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]

         

            WASHINGTON MUTUAL BANK, as a Lender
      By:           Name:           Title: