Exhibit 4.2


 


EXECUTION VERSION


 


INSTRUMENT
OF RESIGNATION, APPOINTMENT AND ACCEPTANCE


 


THIS
INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE, (“Instrument”) dated and
effective as of  May 27, 2008 (the “Effective
Date”), is by and among MERITAGE HOMES CORPORATION (the “Issuer”), WELLS FARGO
BANK, NATIONAL ASSOCIATION, a national banking association with trust powers
duly organized and existing under the laws of the United States and having its
corporate trust office at 919 North Market Street, Suite 1600, Wilmington,
DE 19801 (the “Prior Trustee”) and HSBC Bank USA, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the
United States and having its corporate trust office at 10 East 40th
Street, New York, New York 10016 (the “Successor Trustee”).  Capitalized terms not otherwise defined
herein shall have the same meaning as defined in the Indenture (as defined
below).


 


RECITALS


 


WHEREAS,
pursuant to an Indenture dated as of February 23, 2007 among the Issuer,
the Guarantors named therein and the Prior Trustee (the “Indenture”);


 


WHEREAS,
under the Indenture, the Issuer appointed the Prior Trustee as Trustee, an
office or agency where Notes may be presented for payment (the “Paying Agent)
and an office or agency where the Notes may be presented for registration of
transfer or exchange (the “Registrar);


 


WHEREAS,
under the Indenture, there is presently issued and outstanding $150,000,000 7.731%
Senior Subordinated Notes due 2017;


 


WHEREAS,
Section 7.07 of the Indenture provides that the Trustee may resign at any
time by giving written notice of such resignation to the Issuer and the Issuer
shall promptly appoint a successor Trustee;


 


WHEREAS,
the Prior Trustee desires to resign as Trustee, Paying Agent and Registrar and
the Issuer desires to appoint HSBC Bank USA, National Association as the
successor trustee to Wells Fargo Bank, National Association in its capacities
under the Indenture; and


 


WHEREAS,
HSBC Bank USA, National Association. is willing to accept such appointment as
the successor to Wells Fargo Bank, National Association. in its capacities
under the Indenture.


 


NOW,
THEREFORE, the Issuer, Wells Fargo Bank, National Association and HSBC Bank
USA, National Association, for and in consideration of the covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, hereby consent and agree as follows:


 

















 


ARTICLE I


 


SECTION 1.01.      Acceptance of Resignation of Prior Trustee.  Pursuant to Sections 7.07 and 7.08 of the Indenture,
the Prior Trustee hereby resigns as Trustee, Paying Agent and Registrar under
the Indenture.  The Issuer accepts the
resignation of the Prior Trustee as Trustee, Paying Agent and Registrar.


 


SECTION 1.02.      Appointment of Successor Trustee.  Pursuant to Section 7.08 of the
Indenture, the Company hereby appoints the Successor Trustee as Trustee,
Registrar and Paying Agent under the Indenture and confirms to the Successor
Trustee all the rights, powers, trusts and duties of the Trustee, Registrar and
Paying Agent under the Indenture and with respect to all property and money
held or to be held under the Indenture, with like effect as if the Successor
Trustee was originally named as Trustee, Registrar and Paying Agent under the
Indenture.  The Company shall execute and
deliver such further instruments reasonably acceptable to the Company and shall
do such other things as the Successor Trustee may reasonably require so as to
more fully and certainly vest and confirm in the Successor Trustee all the
rights, powers, trusts and duties hereby assigned, transferred, delivered and
confirmed to the Successor Trustee.


 


ARTICLE II


 


SECTION 2.01.
Issuer Representation and Warranties. 
The Issuer represents and warrants to the Successor Trustee that:


 


a.                                       It is in good
standing and validly existing under the laws of the State of Maryland.


 


b.                                      The execution
and delivery of this Instrument has been duly authorized by the Issuer.


 


c.                                       No covenant or
condition contained in the Indenture has been waived by the Issuer or by the
Holders of the percentage in aggregate principal amount of the Notes required
by the Indenture to affect such waiver.


 


d.                                      No Event of
Default has occurred and is continuing under the Indenture.


 


e.                                       Except for that
certain First Supplemental Indenture dated as of July 10, 2007, the Indenture
has not been amended or modified and is in full force and effect and the Notes
are validly issued securities of the Company.


 


f.                                         There is no
action, suit or proceedings pending or, to the best of the Issuer’s knowledge,
threatened against the Issuer before any court or any governmental authority
arising out of any action or omission by the Company under the Indenture.


 


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g.                                      This Instrument
has been duly authorized, executed and delivered on behalf of the Issuer and
constitutes its legal, valid and binding obligation.


 


h.                                      All conditions
precedent applicable to the Company relating to the appointment of the
Successor Trustee as Trustee, Registrar and Paying Agent under the Indenture
have been complied with by the Company.


 


ARTICLE III


 


SECTION 3.01.
Prior Trustee’s Resignation.  Pursuant to
Section 7.07 of the Indenture, the Prior Trustee hereby notifies the
Company that it is hereby resigning as Trustee, Registrar and Paying Agent
effective immediately upon full execution of this Instrument by all the parties
hereto.


 


SECTION 3.02.
Prior Trustee’s Representations and Warranties. 
The Prior Trustee hereby represents and warrants to the Successor
Trustee that:


 


a.                                       No covenant or
condition in the Indenture has been waived by the Prior Trustee or, to the best
of the knowledge of the Responsible Officer who is signing this Instrument, or by
the Holders of the percentage in aggregate principal amount of the Notes required
by the Indenture to effect any such waiver.


 


b.                                      There is no
action, suit or proceedings pending or, to the best of the knowledge of the
Responsible Officer signing this Instrument, threatened against the Prior
Trustee before any court or governmental authority arising out of any action or
omission by the Prior Trustee as Trustee, Paying Agent and Registrar under the Indenture.


 


c.                                       Prior Trustee
will deliver to Successor Trustee, as of or immediately after the Effective
Date hereof, all documents in its possession relating to the trust created
under the Indenture, including all of the documents listed in Exhibit A
hereto, and such other documents reasonably obtainable as mutually agreed upon.


 


d.                                      The execution
and delivery of this Instrument has been duly authorized by the Prior Trustee,
and this Instrument constitutes the Prior Trustee’s legal, valid, binding and
enforceable obligation.


 


e.                                       $150,000,000
aggregate principal amount of 7.731% Senior Subordinated Notes due 2017 is
outstanding on the date hereof.


 


f.                                         Interest on the
7.731% Senior Subordinated Notes has been paid through April 30, 2008.


 


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g.                                      The Prior
Trustee agrees to pay or indemnify the Successor Trustee and save the Successor
Trustee harmless from and against any and all costs, claims, liabilities,
losses or damages whatsoever (including the reasonable fees, expenses and
disbursements of the Successor Trustee’s counsel and other advisors), that the
Successor Trustee suffers or incurs without negligence or willful misconduct on
its part arising out of actions or omissions of the Prior Trustee.  The Successor Trustee will furnish to the
Prior Trustee, promptly after receipt, all papers with respect to any action
the outcome of which would make operative the indemnity provided for in this
Section.  The Successor Trustee shall
notify the Prior Trustee promptly in writing (and, in any event, within no
later than 10 days) of any claim for which it may seek indemnity.  The Prior Trustee shall have the option to
defend the claim and the Successor Trustee shall cooperate fully in the
defense.  If the Prior Trustee shall
assume the defense, then the Prior Trustee shall not pay for separate counsel
of the Successor Trustee.  The Prior
Trustee shall not be obligated to pay for any settlement made without its
consent.


 


SECTION 3.03.  Successor Trustee Representation and
Warranty.  The Successor Trustee
represents and warrants to the Prior Trustee and the Issuer that it is eligible
and is duly authorized to serve as Trustee under the Indenture.


 


SECTION 3.04.
Acceptance of Successor Trustee. 
Pursuant to Section 7.08 of the Indenture, the Successor Trustee
hereby accepts its appointment as Trustee under the Indenture and shall hereby
be vested with all the rights, powers, trusts and duties of the Trustee under
the Indenture and with respect to all property and money held or to be held
under the Indenture, with like effect as if the Successor Trustee was
originally named as Trustee under the Indenture.  The Successor Trustee also hereby accepts its
appointment as Registrar and Paying Agent. 
The Successor Trustee will perform said rights, powers and duties upon
the terms and conditions set forth in the Indenture.  Promptly after the execution and delivery of
this Instrument, the Successor Trustee shall cause a notice to be sent to each
Holder of the Notes on behalf of the Issuer containing the information required
by Section 7.07(5) of the Indenture, a copy of which is attached as Exhibit C.


 


SECTION 3.05.  Board Resolution.  The Issuer hereby certifies that Exhibit B
annexed hereto is a true and correct copy of the Board Resolution that was duly
adopted by the Board of Directors of the Company authorizing the appointment of
the Successor Trustee.


 


SECTION 3.06.  Assignment etc. by Prior Trustee.  As of the Effective Date, the Prior Trustee
hereby confirms, assigns, transfers, delivers and conveys to the Successor
Trustee, as Trustee under the Indenture, upon the trusts expressed in the Indenture,
all rights, powers, trusts, privileges, duties and obligations which the Prior
Trustee now holds under and by virtue of the Indenture, and effective as of 


 


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such
date does hereby pay over to the Successor Trustee, and the Successor Trustee
hereby acknowledges receipt of, any and all property and moneys held by the
Prior Trustee and by virtue of the Indenture.


 


SECTION 3.07.
Choice of Laws.  This Instrument shall be
governed by the same laws that govern the Indenture.


 


SECTION 3.08.  Counterparts. 
This Instrument may be executed in any number of counterparts, each of
which, when so executed and delivered, shall be an original, but all
counterparts shall constitute but one Instrument.


 


SECTION 3.09.  Survival of Issuer’s Obligations to Prior
Trustee.  Notwithstanding the resignation
of the Prior Trustee as Trustee under the Indenture, the Issuer shall remain
obligated under the Indenture to compensate, reimburse and indemnify the Prior
Trustee in connection with its trusteeship as provided in the Indenture, and
nothing contained in this Instrument shall in any way abrogate the obligations
of the Issuer to the Prior Trustee under the Indenture or any lien created in
favor of the Prior Trustee thereunder. 
The Issuer also acknowledges and reaffirms its obligations to the
Successor Trustee set forth in Section 7.06 of the Indenture.


 


SECTION 3.10.
Notices.  All notices, whether faxed or
mailed, will be deemed received when sent pursuant to the following
instructions:


 


	
  TO
  THE SUCCESSOR TRUSTEE:

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC
  Bank USA, National Association

  
	
   

  	
  Corporate
  Trust & Loan Agency

  
	
   

  	
  10
  East 40th Street

  
	
   

  	
  New
  York, NY 10016

  
	
   

  	
  Attn:
  Anthony A. Bocchino, Vice President

  
	
   

  	
   

  
	
  TO
  THE PRIOR TRUSTEE:

  	
   

  
	
   

  	
   

  
	
   

  	
  Wells
  Fargo Bank, National Association

  
	
   

  	
  Corporate
  Trust Services

  
	
   

  	
  919
  North Market Street

  
	
   

  	
  Suite 1600

  
	
   

  	
  Wilmington,
  DE 19801

  
	
   

  	
  Attn:
  Tracy McLamb, Vice President

  
				



 


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  TO
  THE ISSUER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Meritage
  Homes Corporation

  
	
   

  	
   

  	
  17851
  N. 85th Street, Suite 300

  
	
   

  	
   

  	
  Scottsdale,
  AZ 85255

  
	
   

  	
   

  	
  Attn:
  John B. Carroll, Treasurer

  
					



 


SECTION 3.11  Effectiveness.


 


This
Instrument and the resignation, appointment and acceptance effected hereby
shall be effective as of the close of business on the Effective Date, upon the
execution and delivery hereof by each of the parties hereto; provided, however,
that the resignation of the Prior Trustee and the appointment of the Successor
Trustee as Registrar and Paying Agent under the Indenture shall be effective
upon the latest of: (a) 10 business days after the date first above
written; and (b) receipt by the Depository Trust Company (“DTC”) of both
the Prior Trustee’s transfer agency change notice and the Successor Trustee’s
transfer agency change notice.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Instrument as of the
date set forth above.


 


	
  Meritage
  Homes Corporation, as Issuer

  
	
   

  	
   

  
	
  By

  	
  /s/
  Larry W. Seay

  	
   

  
	
   

  	
   

  	
   

  
	
  Its

  	
  EVP/CFO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSBC
  Bank USA, National Association, as Successor Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Anthony Bocchino, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
  Its

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wells
  Fargo Bank, National Association, as Prior Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Tracy McLamb

  	
   

  
	
   

  	
   

  	
   

  
	
  Its

  	
  Vice President

  	
   

  
				



 


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EXHIBIT A


 


Documents
to be delivered by Prior Trustee to Successor Trustee as to the Indenture:


 


1.               Copy of the most recent SEC
reports delivered by the Company pursuant to the Indenture.


 


2.               Copy of the Indenture.


 


3.               File of all closing
documents relating to the Indenture and all supplemental indentures executed and
all correspondence relating to the Senior Subordinated Notes since the Issue
Date.


 


4.               Copy of most recent
Compliance Certificate delivered pursuant to the Indenture.


 


5.               Certified List of
Noteholders as of the Effective Date, certificate detail and all “stop
transfers” and the reason for such “stop transfers” (or, alternatively, if
there are a substantial number of registered Noteholders, the computer tape
reflecting the identity of such Noteholders).


 


6.               Copies of any official
notices sent by the Trustee to all Noteholders of the Notes pursuant to the
terms of the Indenture during the past twelve months.


 


7.               Debt Service records for the
Notes.


 


8.               All uninssued Note Inventory
or DTC FAST held global certificates.


 


9.               Original Global Notes
registered in the name of Cede & Co.


 


10.         Representation Letter with
DTC.


 


11.         Such other documents as the
Successor Trustee may reasonably require in order to transfer the appointment.


 


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EXHIBIT B


 


BOARD RESOLUTION


 


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EXHIBIT C


 


NOTICE TO NOTEHOLDERS


 


Notice to the Holders


of the


Meritage Homes Corporation


7.731% Senior Subordinated Notes due 2017


(the “Notes”)


CUSIP No. 59001AAL6*


 


We hereby notify you of the resignation of Wells Fargo Bank, National
Association, as Trustee, Registrar and Paying Agent under the Indenture dated
as of February 23, 2007 (the “Indenture”) pursuant to which your Notes
were issued and are outstanding.


 


The Company has appointed HSBC Bank USA, National Association, whose
corporate trust office is located at 10 East 40th Street, 14th
Floor, New York, New York, 10016, as successor Trustee, Registrar and Paying
Agent under the Indenture, which has been accepted and is effective.


 


	
   

  	
   

  	
  HSBC
  Bank USA, National Association

  
	
   

  	
   

  	
  as
  successor Trustee

  



 


Dated:             , 2008


 






*No
representation is made as to the correctness of the CUSIP number either as
provided on the Notes or contained herein.


 


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